Wellnex Life Limited has initiated a $22.1 million entitlement offer priced at $0.65 per share, coinciding with its proposed dual listing on the London Stock Exchange's AIM market, driven by strong UK institutional interest.
- 1:1 non-renounceable entitlement offer to raise up to $22.1 million
- Offer priced at $0.65 per share, an 8.6% discount to 30-day VWAP
- Proposed dual listing on London Stock Exchange AIM market underway
- Funds to redeem convertible notes and pay deferred Pain Away acquisition costs
- Strong demand from UK institutions and sophisticated investors
Wellnex Life’s Strategic Capital Raise
Wellnex Life Limited (ASX: WNX) has launched a significant 1:1 non-renounceable entitlement offer priced at $0.65 per share, aiming to raise up to $22.1 million. This capital raise is closely tied to the company’s ambitious plan for a dual listing on the London Stock Exchange’s AIM market, a move that signals Wellnex’s intent to deepen its footprint in the UK and European healthcare markets.
The offer price represents an 8.6% discount to the 30-day volume weighted average price (VWAP), reflecting a strategic pricing decision made in consultation with lead brokers SP Angel, Orana Capital, and Barclay Pearce Capital. This discount is designed to attract strong participation from both existing shareholders and new UK institutional investors, who have already shown robust interest during the initial marketing phase.
Dual Listing and Market Reception
Wellnex’s proposed dual listing on AIM is a transformational step, positioning the company on one of the world’s most respected public exchanges. The marketing campaign in the UK has been met with enthusiasm, with multiple leading UK institutions indicating their intention to cornerstone the capital raise. This institutional backing not only validates Wellnex’s growth strategy but also enhances its profile among sophisticated investors.
CEO and Joint Managing Director George Karafotias highlighted the importance of the entitlement offer in ensuring existing shareholders are not disadvantaged, allowing them to participate on equal terms with new investors. The dual listing and capital raise together mark a pivotal moment in Wellnex’s evolution as a global consumer healthcare player.
Use of Funds and Financial Impact
The proceeds from the entitlement offer will primarily be used to redeem outstanding convertible notes and settle deferred consideration related to the 2023 acquisition of Pain Away, a leading Australian topical pain relief brand. This financial restructuring is expected to save Wellnex approximately $1.4 million annually in costs, improving the company’s cash flow and operational efficiency.
Remaining funds will support general working capital needs, including costs associated with the entitlement offer itself and the proposed AIM listing. This capital injection comes at a time when Wellnex is experiencing strong revenue growth, with H1 FY25 revenues up 112% year-on-year, driven by both its own brands and IP licensing agreements, including a notable collaboration with global pharmaceutical giant Haleon.
Growth Trajectory and Market Position
Wellnex’s portfolio includes proprietary brands such as Wakey Wakey and Nighty Night, alongside the Pain Away brand and licensing deals with major pharmaceutical companies. The company’s revenue growth, particularly the 182% increase in brand revenues and 64% growth in IP licensing in the first half of FY25, underscores its expanding market presence.
The collaboration with Haleon, which has facilitated Wellnex’s first product launch in the UK market, is a key driver behind the decision to pursue a dual listing. This partnership not only enhances Wellnex’s credibility but also opens doors to broader international distribution channels.
Next Steps and Shareholder Engagement
The entitlement offer opens on 17 February 2025 and closes on 26 February 2025, with new shares expected to commence trading on the ASX on 27 February. Eligible shareholders in Australia and New Zealand have the right to subscribe for shares on a pro-rata basis and may apply for additional shares through a shortfall offer.
Wellnex is actively engaging shareholders through live briefings led by Joint Managing Director Zack Bozinovski, providing transparency and guidance on participation. The success of the entitlement offer and the subsequent AIM listing remain subject to regulatory approvals and market conditions, but the strong institutional interest bodes well for the company’s near-term capital raising goals.
Bottom Line?
Wellnex Life’s capital raise and AIM dual listing plan set the stage for accelerated growth, but execution risks remain as regulatory approvals loom.
Questions in the middle?
- Will the entitlement offer achieve full subscription given it is not underwritten?
- How will the dual listing on AIM impact Wellnex’s valuation and liquidity?
- What are the potential regulatory hurdles that could delay or alter the AIM listing?