Appen outlines $55 million capital raise
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The news: Embattled data services firm Appen has placed its shares in a trading halt ahead of a $55 million capital raising that it says will fund generative AI opportunities.
The numbers: Appen will raise $50 million via an underwritten institutional placement, issuing shares at $1.92 each, an 11.5% discount to its last closing price. It will also undertake a $5 million share purchase plan for retail shareholders at the same price.
The trading halt is expected to be lifted after the announcement of results of the placement before the start of trading on Monday.
The context: Appen said the fundraising would provide balance sheet flexibility for generative AI related opportunities. The company said its external customer environment has continued to show signs of improvement particularly for generative AI related projects.
Appen said its revenue dropped 12.9% to $54.3 million in the third quarter, but it returned to profitability at the underlying earnings level. It posted an underlying loss and falling revenue at its half-year results in August.
The company has been struggling to turn around its data services business after key client Google abruptly terminated a multimillion-dollar contract in January.
It posted an underlying loss and falling revenue at its half-year results in August.
US tech firm Innodata withdrew a $154 million takeover bid for Appen earlier this year, and the company has been under pressure from shareholders over its poor share price performance.
The sources: ASX announcement, ASX announcement
