AuMake scrubs capital raising, shares fall
AuMake’s market cap dropped as much as 15 per cent after the retailer scrapped a $20 million capital raising, citing share price volatility.
AuMake, which sells Australian goods to Chinese tourists and so-called daigou for export, said on Wednesday it had cancelled the raising after the underwriter pulled out.
“The company considers this action reasonable given recent share price volatility,” AuMake said in a statement to the ASX.
As a result, AuMake will refund all application monies received, withdraw its entitlement offer and its shortfall offer, and will instead raise $14 million through a placement priced at 45 cents a share. AuMake shares fell as much as 15 per cent in early trade on Wednesday. At 1135 AEDT, they had recovered but were still down 3.5 cents, or 6.6 per cent, at 49.5 cents.
AuMake, which debuted on the ASX in October following a reverse takeover of a former gas and drilling company, had wanted to raise $20 million through a 63 cents per share offer to existing shareholders. The proceeds were going to go towards increasing the company’s store network from six in Sydney to at least 20 nationwide by mid-2019.
AuMake on Wednesday said it has received firm commitments from investors in Australia and China for the new placement – and that it will be able to accelerate its store rollout. AuMake sells Australian cosmetics, vitamins, long-life milk, baby products, and wool and leather products to shoppers for export to China.