Swift Networks Completes $3.3 Million Capital Raise Amid Market Volatility

Highlights:

• Successful Capital Raise: Swift Networks Group Limited (ASX: SW1) raised $2.3 million before costs through its entitlement offer, partially underwritten by PURE Asset Management for $2 million.
• Strategic Debt Reduction: $1.4 million from the capital raise will be used to reduce the PURE Loan Facility from $7.6 million to $6.2 million, with the repayment date extended to March 31, 2027.
• Funds for Growth Initiatives: Proceeds are earmarked for the development, marketing, and inventory of Swift Access 2025, along with further feature enhancements and preparations for Swift Access 2026.

Successful Entitlement Offer Despite Market Disruption

Swift Networks Group Limited (ASX: SW1) has successfully raised $2.3 million before costs through its non-renounceable pro-rata entitlement offer, despite facing market disruptions in April. At the time of writing, the company announced the completion of the entitlement offer, which was partially underwritten by PURE Asset Management Pty Ltd for up to $2 million. Eligible shareholders were given the opportunity to purchase one new share for every two shares held at an issue price of $0.01 per share.

The entitlement offer saw strong participation, with Swift's board and management contributing $161,464. In total, 33,850,428 shares were accepted under entitlements and shortfalls, amounting to $338,504, while PURE Asset Management committed to acquiring 200,000,000 shares, securing an additional $2 million. The total entitlement offer reached $3.3 million, surpassing the minimum subscription requirement outlined in the prospectus.

Strategic Use of Funds and Debt Restructuring

Proceeds from the capital raise are set to fuel the development, marketing, and inventory costs associated with Swift's next-generation product, Swift Access 2025. The funds will also contribute to the reduction of Swift's existing debt with PURE Asset Management. As part of the agreement, $1.4 million from the raise will be used to lower the PURE Loan Facility from $7.6 million to $6.2 million. Additionally, the loan repayment date has been extended to March 31, 2027, with updated covenants requiring Swift to maintain a minimum cash balance of $1 million monthly and limit capital expenditures to $350,000 per quarter.

Future Prospects and Market Adaptation

Swift's Managing Director, Brian Mangano, expressed confidence in the company's growth strategy, emphasizing the competitive edge Swift Access 2025 offers in both the mining and aged care sectors. With streamlined production costs and enhanced features, the new product is expected to accelerate growth, aligning with shifting industry demands. The company is also exploring options to place the shortfall shares within the next three months at the entitlement offer price of $0.01 per share, aiming to further strengthen its capital position.

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