17 Sep 2020

ERoad aims to raise $50m, heading to ASX

1:06 pm on 17 September 2020

ERoad is raising new capital to fund growth and is also headed to the Australian stock exchange.

Generic picture of truck driver recording / logging information.

Photo: 123RF

The transport software company, which sells software to track fleet management and driver hours, aimed to raise up to $50 million through a share sale.

Large investors will be offered $42 million worth with existing shareholders being offered $8m. The price has been set at $3.90 each, a 10 percent discount to the firm's last traded share price.

"With the ASX listing, now is the opportune time to raise capital which will increase liquidity, broaden our investor base and allow ERoad to accelerate its growth strategies as it heads towards 250,000 connected vehicles," said ERoad chairman Graham Stuart.

ERoad chief executive Stephen Newman said the money would be used for research and development, pay down its debts and fund acquisitions.

"Covid has definitely given the world a bit of a serve, but I think we can see our way through this, that this is actually the time for us to be more aggressive with our growth plans."

In its revenue guidance for the half year ending September it anticipated revenue between $43.5m and $44.5m and an underlying profit of between $12 and $14.2m.

Newman said the company had set aside between $1.3m and $2m to cover bad an doubtful debts.