BLOW FOR GUVERA AS ASX REJECTS PLANNED IPO
The move comes despite the company issuing a replacement prospectus requested by the Australian Securities and investments Commission. The new prospectus had included 45 changes, among them an increase of minimum subscriptions by $10 million to $40 million.
The ASX has offered no reasons for opposing Guvera's public float, arguing that specific reasons remain confidential.
In a brief statement, Guvera says it plans to meet with the ASX next week to discuss the reasons for the rejected IPO which the company says would have valued Guvera at close to $1.4 billion.
Guvera says the ASX had advised the company that it had 'exercised its discretion' to refuse its admission to the official ASX list.
"The ASX has offered to meet with Guvera next week to discuss its decision," it says.
"Guvera is currently reviewing its legal options and obligations and will be communicating to the market when it is more informed about the position and course of action the company can take."
Guvera's IPO has created a wave of controversy in the investment and startup communities since it was announced more than two weeks ago.
Concerns centred on the company's ongoing profitability and its $1.4 billion valuation. Guvera, which has survived on multiple capital raisings from private investors since it was founded in 2008, has yet to deliver a profit.
The company, which has operations in Australia and the US, posted an $81 million loss in FY15. The prospectus revealed a first-half loss of $55.7 million in FY16.
CEO Darren Herft has argued that Guvera's business model has been misunderstood by many market commentators.
"We have done a lot of groundwork to build up and be in the game," he says.
"We've built our business to be a mass market player and believe we can create billion-dollar revenues for the music industry based on the model we have created."
GUVERA BOSS FENDS OFF SOCIAL MEDIA STORM
However, it is understood Guvera may need more funds in seven to nine months after the IPO.
Under the revised prospectus, Guvera had planned to issue a minimum of 40 million shares at $1 each, with the ability to take acceptances of up to 80 million shares.
The closing date for investors had been extended to July 15, and the company was expected to start trading on the ASX on July 25.
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