iCar Asia to raise $11M to boost presence in booming auto market

Malaysia-based iCar Asia, which runs automotive marketplace sites in three countries, today announced it plans to raise another A$3.5 million (US$2.6 million) in fresh funds from a rights issue.

The new capital raising exercise will bring total funds so far generated by the company this month to A$15 million (US$11.2 million). iCar Asia is listed on the Australian Securities Exchange.

iCar Asia’s network includes Carlist in Malaysia; One2Car, ThaiCar, and Autospinn in Thailand; and Mobil123 in Indonesia. The company said that the funding is sufficient to “see the business through to profitability.”

iCar Asia said the funds will be used for new mobile apps and to roll out new advertising products for automakers that are designed to increase the company’s share of the online new car advertising market. Plus, it will launch a “cost per lead” advertising service, enabling the company to participate in used 
car market commission revenues. There are no plans to expand to new countries.

Reaching out to shareholders

On July 1, it announced it completed the placement of 17,692,308 new common shares to select institutional investors at A$0.65 per share, or a total of A$11.5 million (US$8.6 million).

The issue price was a 7.8 percent discount to iCar Asia’s market closing price of A$0.705 on June 30. The placement will be settled on July 9, and the shares will be issued on July 10.

In addition to the placement, the company announced that it intends to undertake a 1:44 rights issue for eligible shareholders that will generate proceeds of up to A$3.5 million (US$2.6 million). A rights issue entitles a company’s existing shareholders to buy additional shares directly from the company in proportion to their existing holdings within a fixed time period.

The rights issue price is the same offered to institutional investors under the private placement. The record date for the rights issue is expected to be on or around July 10. The issue will be offered to retail shareholders with a registered address in Australia or New Zealand and institutional investors in Australia and certain overseas jurisdictions.

Catcha Group, a company controlled by Patrick Grove and Lucas Elliott, intends to take up its full entitlement under the rights issue, iCar Asia said.