Fast-growing digital media company Migme has raised $7 million through a share placement to a Chinese app developer, taking its total capital raisings since listing two years ago to $36 million.
Migme announced late yesterday it had signed an MOU with Meitu Investment, which it described as one of the world’s largest photo and video mobile app developers.
Meitu has more than 900 million users across its product portfolio, mainly in China.
The two companies plan to work together on content sharing and marketing initiatives, with a focus on Indonesia, India and The Philippines.
As part of the agreement, Meitu has subscribed for 11.65 million Migme shares at 60 cents per share, which will help Migme fund its rapid expansion.
Singapore-based Migme had 32 million active users on its social media platforms at the end of December, up 33 per cent over the quarter, and lifted its cash receipts to $5.4 million, up 45 per cent over the quarter.
However, that was far outweighed by operating costs of $10.6 million during the quarter.
It finished the year with a cash balance of $8.7 million.
The pricing of the latest capital raising was lower than other deals since Migme listed on the ASX in July 2014.
It raised money at $1.00 per share and 70 cents per share last year.
It also issued convertible notes in December at a conversion ratio of $1.10 per share.
Its stock closed yesterday at 58 cents per share, giving Migme a market cap of $128 million.
Over the past month, its stock fell from 80 cents to 35 cents, before bouncing ahead of yesterday’s announcement.
The company recently disclosed it has been approached about listing on overseas capital markets with a view to achieving better recognition of shareholder value, in particular in the USA.
Chief executive Steven Goh said the company was considering its options.
