Melbourne IT company Azurn International has appointed two Perth firms, corporate adviser Azure Capital and Montagu Stockbrokers, to guide it through its second attempt at a stock market float.
Melbourne IT company Azurn International has appointed two Perth firms, corporate adviser Azure Capital and Montagu Stockbrokers, to guide it through its second attempt at a stock market float.
Azurn is paying a premium price for its $5 million initial public offering, with the costs equal to 20 per cent of the gross proceeds, or roughly double the cost of most IPOs.
The appointment of Montagu and Azure Capital followed an aborted 2005 float managed by Melbourne broker Pinnacle Equities.
To try and revive its float, Azurn has radically repriced the transaction.
The 2005 deal valued the company at just more than $30 million, whereas the current proposal values the company at $15.6 million.
It has also established a new board of directors chaired by former Wesfarmers group director e-commerce and McKinsey & Co principal, Richard Krasnoff.
A second new director is investment banker Scott Wilkie, while Tony Giroti, one of the inventor’s of Azurn’s technology, has been excluded.
Former SMS Management & Technology executive Viberto Selochan has continued as chief executive.
Azurn is seeking to raise $5 million, and up to $7 million with oversubscrip-tions, to support the commercialisation of its ‘convergence’ technology.
Its core technology is the ‘multimedia convergence platform’, which delivers voice, data and video concurrently to a variety of wired, wireless and broadband devices.
Writing in the company’s prospectus, Mr Krasnoff said Azurn would initially focus on a web conferencing product and planned to launch several other products during 2006 and 2007.
Development of its technology commenced in Boston in 2000 through a company that is now a US subsidiary.
Despite this six-year history, Azurn has generated minimal sales.
It had zero revenue in the nine months to March 2006 and the prospectus assumed no revenue would be earned in the 2007 financial year, though the directors stated that they did expect revenue to be earned in 2007.
The prospect of generating sales has been boosted by the signing of sales and marketing agreements with telecommunications companies SingTel Optus and Primus Telecom.
Under the IPO, Azurn is offering 25 million shares at 20 cents per share. Investors will also be offered one free option per share, exercisable at 20 cents up to May 2011.
The cost of the IPO is expected to be $1 million if the offer is fully subscribed, or $1.13 million if the offer is fully over-subscribed.
These figures include corporate advisory costs related to the restructuring of the business as well as costs directly linked to the float.
The sponsoring broker, Montagu, will be paid a $60,000 fee and a 6 per cent placement fee, which are in line with market norms. Montagu will also be issued two million options on listing, which is also fairly common.
In addition, Montagu will be paid $10,000 to prepare a research report to be used in marketing the share offer and ongoing advisory fees of $5,000 per month for the six months after listing.
Azure Capital will be paid a retainer of $100,000, a success fee of $150,000 and ongoing advisory fees of $20,000 per month for the first six months after listing and $12,000 per month for the second six months.
It will also be issued 3.2 million 20 cent options, which can be exercised at any time up to August 2013.
Azurn’s prospectus noted that the company was still cleaning up the mess from its aborted 2005 float.
