ITG to raise €36m in share placing

Telecoms and electronic payments group ITG is raising approximately €36 million (£28.4 million) through a fully underwritten placing and open offer of new shares at €5.00 per share (316p sterling). ITG shares fell five cents in weak markets to €5.15 on the announcement, but recovered to close unchanged at €5.20.

At €5.00 the offer price is at a discount of just under 4 per cent on last Friday's €5.20 closing price. The placing and open offer is being fully underwritten by joint stockbrokers to the company, Goodbody and Insinger Townsley.

The announcement of the placing and open offer of eight million shares to raise €36.2 million after expenses follows an announcement last month that it planned to raise approximately €30 million in the market. The new funding will restore ITG's cash balances which are expected to have fallen from an end December 2000 level of €24.9 million to a forecast level of under €2 million by the end of the year.

At the €5.00 offer price ITG, which is changing its name to Alphyra, is valued at about €158 million or £100 million sterling. Under the open offer terms, shareholders will be able to buy one new share at €5.00 for every six shares they now own. Of the eight million new shares 4,383,100 will be placed with the places immediately while 3,616,891 shares will be placed subject to clawback to meet demand from ordinary shareholders under the open offer. ITG directors are not participating in the offer.

The placing and open offer are conditional on shareholder approval at an extraordinary general meeting in Dublin on September 14th.

The fundraising aims to provide the capital for expanding its payment terminal operations into the French and German markets and at funding an imminent acquisition, according to chief executive Mr John Nagle.

Some €26 million of the new funding will be applied to expanding into France and Germany through rolling out more than 23,900 payment terminals to merchants over the next 18 to 24 months. About €10 million may be spent on a potential acquisition - a company operating in the electronic transactions sector in Europe.

ITG owns and maintains a network of about 10,000 payment terminals in the Republic and services about 30,000 payment terminals in the UK including terminal delivering electronic funds top-up for Vodafone, Orange and BT Cellnet users.

According to the group, its domestic network and its electronic transactions operations in the UK provide a proven business model which it can apply in other European countries. In the last 18 months ITG has acquired a payment terminal base in Holland and also expanded into Sweden.