WDT - Wellington Drive Technologies

[Lizard]

Yes, another impressive stride forward towards justifying the current market cap.

[emearg]

Here is a ShareChat article that has additional info on todays annoucement:

WDT signs $1.5m agreement

Wellington Drive Technologies said today it had signed a $1.5 million long-term contract to provide its efficient motors to an unnamed international company.

The company will launch the products containing the motors throughout this year and early 2009.

Manufacturing revenue was expected to grow from 2009 from the long-term agreement, WDT managing director Ross Green said.

"This agreement is significant as Wellington's technology will be in products available through an established, global sales organisation," Green said.

"These distribution channels should enable fast revenue growth as the products come available and accepted by end users."

WDT had signed a confidentiality agreement covering the name and other details of the company, to protect both parties' competitive positions, he said.

The company was not a household name, and not based in the United States, but was well-known in technical circles, Green said. It had approached WDT.

"The sort of products that they're dealing with are used everywhere, and essentially they're everywhere as well."

WDT had spent nine months on development work last year anticipating the contract completion, which would be recorded as revenue.

WDT is not greatly affected by the high New Zealand dollar as it produces mainly in China and Malaysia. The Auckland-based company was running at capacity, and was expanding so it had an adequate buffer.

"I think really what we're seeing is the fact that we've been out in the market with truly commercial products for a couple of years, and I think in hindsight we're going to say this is the year when the company began generating business on a truly commercial scale," he said.

[Codfish]

"Institutional placement of 31 million ordinary shares... At the agreed price of 41.5 cents per share, this raises just over $12.8m in new capital. After the transaction, UBS will own 9.2% of the shares on issue"

https://www.directbroking.co.nz/Dire...spx?id=1839310

WDT's wish list...

"The new funds will be used to;
- Strengthen sales, marketing and in-market support within the sales organisation, primarily overseas;
- Improve the Company's ability to deliver products in volume rapidly,
including the establishment of a stator manufacturing facility in Singapore
and the implementation of systems and processes appropriate for high volume supply direct to leading appliance manufacturers in North America, Asia and Europe ("Tier 1" supply systems);
- Reduce the time taken to move new standard and special-purpose Total Integration designs from prototype to full production status
- Bring forward the next generation of research and development to
extend Wellington's innovation lead and to access new market areas. "

Not sure $13m will cover it, how much does it cost to build a small factory in Singapore? I like the ambition but expect the market to focus on the fact that 'break even' has now been pushed out another year.

[Nevl]

I like this I really would like to see them go for it. This piece meal approach though is fustrating and I would love to see them try to raise closer to 100mill in one go. Remove all doubt and be able to do what they want when they need too. Still having UBS on board is great especially in this investment climate. They are taking a punt on new technology in a falling market. If that is not a vote of confidence what is?

I will be topping up though out the next few years so in the end I will have WDT as my largest investment. I still think this share will be close to $2.00 about the end of 2010 and heading to $3.00 by 2012. I have already brought another 10000 this week.

[Codfish]

...I would love to see them try to raise closer to 100mill in one go. Remove all doubt and be able to do what they want when they need too.

This may not be the end of it. I imagine UBS weren't the only ones WDT have been talking to and no reason to beleive that all discussions have been concluded already. In fact I wonder why UBS didn't wait a few weeks given the current climate?

Capital Raising from us shareholders is now unlikely though IMO.

[ratkin]

They will be asking for more money soon

That didnt take long

[emearg]

Todays news means that over 190 million of the 337 million shares issued will be held by institutions. That is a pretty large chunk for a "start up" company isn't it?

[emearg]

That didnt take long

That is true. Isn't it also true that this is a good thing? Better than leaving it to the last minute and either having to slow down expansion or cause customers concern about the state of the balance sheet. Nothing like money in the bank to make customers comfortable about your tenure. That is one of the things the failed capital raising in 06 was meant to resolve wasn't it?

[Nevl]

I think this is a confirmation of the plan outlined at the AGM where they said they had a choice of Profits in 2008 or to keep investing in expanding the company for larger profits in 2010 and onwards.I am glad they have gone for this and will keep investing. The potential is too big just to go a short way down the road and then pull back just for small profits. We are in a go for broke situation and I think this is the right call. I think there will be another capital raising in the next few months. But there is probally going to be one more major announcement by june.

[emearg]

But there is probally going to be one more major announcement by june.

That is quite a specific comment. Why are you expecting only one announcement by June?

Considering their ever increasing sales team, the growing demand for EC motors at reasonable prices and the reducing times from first contact to an announcement of sales, first stage of or progress with a TI project can't we reasonably expect more than one announcement before June? Looking back over the past 12 months there was an announcement once a month on average of decent sized sales or new/progressing integration projects.

What ya think?