SOURCE: Covata


May 31, 2016 08:31 ET

Covata Completes AU$13.2 Million Private Placement of Common Stock to U.S. and Asia-Pac Institutional Investors

Funding Led by Major Shareholders Fidelity International and TPG Telecom

WASHINGTON, DC --(Marketwired - May 31, 2016) - Covata Limited (ASX: CVT), a global leader in data-centric security solutions for enterprises, has entered into definitive agreements to issue 57.7 million fully-paid ordinary shares to institutional investors in the United States and Asia-Pac at a price of AU$0.23 per share in a private placement, raising gross proceeds of approximately AU$13.2 million.

The net cash proceeds to the company will be used for working capital to execute key partnerships with Fortune Global 500 companies, including its 10-year contract with Cisco and the rollout of Safe Share within the UK Government pipeline. The Company held AU$7.7 million in cash equivalents at March 31, 2016.

The proposed private placement of 57,728,748 fully-paid ordinary shares will be issued at AU$0.23 per share and will be conducted in two tranches:

  • Tranche 1 -- 23,590,743 ordinary shares to be issued within the company's approved placement limit under ASX Listing Rule 7.1. Tranche 1 will raise gross proceeds of approximately AU$5.4 million.
  • Tranche 2 -- 34,138,005 ordinary shares will be issued pending shareholder approval at an extraordinary general meeting expected to be held in early July. Tranche 2 will raise gross proceeds of approximately AU$7.8 million.

Covata's largest shareholders TPG Telecom and Fidelity International participated in both tranches and increased their holdings from 13.49% to 14.49% and 7.44% to 9.91%. Additionally, the private placement included five new U.S. institutional funds with technology and data security investment expertise.

Trent Telford, CEO of Covata, commented: "The company has laid strong foundations across our three go-to-market channels since listing in November 2014 and achieved a number of significant partnerships and milestones to date. The caliber of new investors and the continued support of our two largest shareholders is a testament to not only Covata's game changing technology, but also the company's ability to set strategic targets and deliver upon them.

"Since being admitted onto G Cloud, our government and enterprise pipeline has increased substantially over the last two quarters, and Cisco now has new joint business opportunities active. Accordingly, we remain focused on driving revenue from our Telco, Government and Cisco partnerships, and this equity placement affords runway to achieve this.

"Covata's investor relations activities this year have generated considerable U.S. institutional investor interest and we are delighted to be able to add several major institutions in the data security investment sector. We are also thankful to our existing shareholders for their strong support and welcome our new investors in the United States to the company."

Chardan Capital Markets LLC and Ord Minnett acted as joint lead managers for the offering.

A further announcement and Appendix 3B will be released upon completion of the issue of first tranche of the Placement Shares, expected to occur on Thursday, June 2, 2016.

The securities offered and sold in the Placement have not been registered under the Securities Act of 1933, as amended, or any United States state securities laws, and may not be offered or sold in the United States absent registration, or an applicable exemption from registration under the Securities Act and applicable state securities laws. This press release shall not constitute an offer to sell, or the solicitation of an offer to buy, any securities in any jurisdiction.

About Covata

Covata Limited (ASX: CVT) enables true ownership and control over your data in the cloud and over mobile services. We deliver data-centric security solutions without compromising simple usability, providing true end-to-end security. Your data is always protected wherever it may travel -- inside your network, beyond the domain, to mobile devices and to the cloud -- with granular access controls that extend to external users, view-only restrictions, real-time revocation and complete visibility and auditability. Own Your Data, control your data and choose where it is stored -- with complete assurance that it is protected and secure. For further information, please visit

Contact Information

  • Media and Investor Relations:
    Nikki Parker
    Vice President Corporate Communications, Growth & IR
    +1 (571) 353-4273

    Chris Tyson
    MZ Group
    Managing Director
    MZ North America
    +1 (949) 491-8235