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Now closed: EROAD rights offer

EROAD Limited (NZX/ASX:ERD) has completed its rights offer.

Offer summary

  • $0.70 NZDOffer price per share if you hold NZX:ERD shares.

  • 21 Sept ‘23Applications for exercising rights close through Sharesies.

  • 1-for-2.06For every 2.06 NZX:ERD shares you already own, get the right to buy 1 new share.

EROAD is aiming to raise up to $38.4 million NZD through this rights offer, which will strengthen its balance sheet, giving it greater flexibility to continue its strategy of sustainable, profitable growth and maximising long-term shareholder value. 

The net proceeds from the raise will be used to repay debt, providing funding headroom to allow EROAD to further underpin its growth strategy, especially in the key North American market.

To learn more, check out: 

A rights offer is one way that a company raises capital (cash). It gives existing shareholders the opportunity to buy more shares in the company—usually at a discounted price and in proportion to the number of shares they already own.

Existing shareholders receive ‘rights’ that they can use to buy shares through the offer. To do this, rights need to be ‘exercised’ which involves paying the offer price for every right they want to turn into a new share.

To learn more, read our article on rights offers.

Get up to speed on EROAD

We had a chat with EROAD CEO Mark Heine about how the company’s technology works, the acquisitions it's made, and its next phase of growth.

Who received rights?

If you held EROAD shares at market close on Wednesday 6 September 2023 through Sharesies, you’ll have received 1 right for every 2.06 EROAD shares you held. These were allocated to Portfolios on Tuesday 12 September 2023 as ‘EROAD Rights’.

As EROAD is a dual-listed company, you’ll have been allocated rights for shares listed on the same exchange as the shares you currently hold. For example, if you hold ERD shares listed on the NZX, the rights you received will be for NZX-listed ERD shares.

If you held a fractional amount of ERD shares, you’ll have been allocated a proportional amount of rights.

Any ERD shares bought after Wednesday 6 September 2023 through Sharesies aren’t eligible to receive rights. 

Can I take part?

Whether or not you already hold EROAD shares, you may be able to take part in the offer.

If you received rights through Sharesies, you’re able to:

  • exercise some or all of your rights to buy shares at the offer price

  • do nothing with some or all of your rights.

Rights are not listed or tradeable on the NZX or ASX, so you won’t be able to sell your rights to someone else through Sharesies. 

To take part, you need to be an existing shareholder and have a registered address in New Zealand or Australia. You can’t take part if you’re based outside of New Zealand or Australia, or you’re acting on behalf of someone based outside of New Zealand or Australia.

If you didn’t receive rights through Sharesies, you can apply to buy shares at the bookbuild price through the shortfall offer.

As a new investor in EROAD through Sharesies, you’ll need to have a registered address in New Zealand to take part in the shortfall offer. You can’t take part if you’re based outside of New Zealand, or you’re acting on behalf of someone based outside of New Zealand.

To learn more, check out the ‘apply for shortfall offer’ section below.

How to take part

If you wish to take part in the offer, you’ll need to apply to exercise the rights you hold.

You’ll need enough money in your Wallet at the time that you exercise your rights to pay the offer price per share. If you need to convert currency to pay the offer price, you’ll also need to pay a currency exchange fee

The price you pay for new shares in the offer may be higher or lower than the price that shares are trading at on the NZX or ASX. 

If you exercise your rights, EROAD is expected to allocate the shares you’re buying on Monday 2 October 2023.

Unexercised rights

Any rights that you haven’t exercised by 2 PM Thursday 21 September 2023 will expire and be removed from your Portfolio once the offer is completed. 

If this happens, your existing shareholding will be diluted (meaning each share you hold will represent a smaller proportion of ownership in the company than before the offer). 

The shares the rights would’ve entitled you to will become available for other investors to buy in the shortfall offer—you may or may not receive some value for them.

Exercise period on Sharesies

12 September 2023 to 2 PM 21 September 2023.

Fees

You won’t be charged the Sharesies transaction fee to exercise rights, but you will be charged currency exchange fees if you convert any money to NZD in order to participate.

When a company raises capital through a rights offer, and its existing shareholders don’t turn all of their rights into new shares, the company might run a shortfall offer so that any leftover shares can be bought by other investors. 

Details of this shortfall offer

The price of EROAD shares through the shortfall offer will be determined by a book-building approach, and will be equal to or above $0.70 NZD per share

The final price will depend on how much interest there is for shares through the shortfall offer, and how much investors are willing to pay for those shares. This may be higher or lower than the price the shares are trading at on the NZX or ASX.

  • Your application will be for EROAD shares listed on the NZX

  • You’ll make your application in NZD, so you’ll need to have enough money in your Wallet at the time of your application.

  • You might be scaled if there’s more interest than there are shares available. This means you may receive fewer or none of the shares that you apply for.

  • If your application is successful, EROAD is expected to allocate the new shares on 2 October 2023.

Shortfall offer period on Sharesies

12 September 2023 to 4 PM 26 September 2023.

Fees

You won’t be charged the Sharesies transaction fee to apply for the shortfall offer, but you will be charged currency exchange fees if you convert any money to NZD in order to participate.

Key dates

Event

Date

Last day to buy EROAD shares to be eligible to be allocated rights

Wednesday 6 September 2023

Rights appear in Sharesies Portfolios

Tuesday 12 September 2023

Rights exercise period opens

Tuesday 12 September 2023

Applications for the shortfall offer open through Sharesies

Tuesday 12 September 2023

Applications for exercising rights close through Sharesies

2 PM Thursday 21 September 2023

Applications for shortfall offer close through Sharesies

4 PM Tuesday 26 September 2023

EROAD expected to allocate new shares

Monday 2 October 2023

Payment of any premiums from the shortfall offer (if applicable)

Monday 9 October 2023

Before taking part

All investing involves risk—you aren’t guaranteed to make money, and you might lose the money you start with.

We encourage you to do your due diligence, consider the risks involved, and speak to a licensed financial advice provider if you need help deciding whether to take part.

For some things to consider before taking part, check out the FMA’s guide to taking part in a rights issue.

Legal bit

Sharesies is not responsible for the offer and Sharesies can’t offer any financial advice on whether or not you should take part in this offer.
When taking part through Sharesies, the Sharesies General Terms and Conditions apply (with necessary changes to accommodate this rights offer) and the definition of shares extends to rights. Fees may apply for use of the platform provided by Sharesies Limited. Sharesies will be paid a fee from EROAD for distributing this offer to Sharesies investors. 
The information provided is not financial advice and has been prepared without taking into account your objectives, financial situation, or needs. Speak to a licensed financial advice provider for advice specific to your circumstances.