Plus SMS gets another capital injection

The cornerstone shareholder in struggling text messaging company Plus SMS is injecting another $7.5 million of capital.

Hewon Capital's plan includes a $7.5 million share placement to develop a telecommunications operations centre and make complementary acquisitions to provide other revenue streams.

The company has also decided to defer its listing on the London AIM alternative market, revisiting the idea in the New Year.

Plus SMS said the injection would allow it to offer international branded vanity codes and launch interactive content services.

It would also be able to manage telecommunications services for large corporations.

The company announced in September that its founder Garry Donoghue and chairman Jim Bracknell were stepping down amid admissions that incorrect statements had been made to the market in the past.

Christopher Tiensch, the company's new CEO, said the key focus was on generating revenue. At least half of its pending contracts were found to be unworkable when Mr Tiensch took over.

Plus SMS's shares have plummeted 91 per cent from a year high of 82c in November last year to a low of 7c earlier this month.

The Securities Commission is investigating.

Hewon Capital took its stake in Plus SMS in May when it injected $5 million in exchange for 10 million shares at 50c a piece.

The latest proposal will see Hewon issued with 150 million new shares at 5c each.

In addition, 70 million existing options held by Hewon will be re-priced at 10c each and their term extended. They were originally taken at 50c a piece.

The changes will also apply to 23.6 million options held by other investors.

Shares and performance-based options will also be issued to Mr Tiensch, management and Plus SMS's advisory board members.

Chairman George Brooks said advisory board members had "key relationships which will significantly facilitate access to and accelerate completion of deals critical for the business".

"They are also an essential ingredient for a successful international listing further down the track," he said.

The Hewon proposal will be subject to an independent advisors' report and shareholder approval at a meeting in early December.

The meeting will also consider the return and cancellation of 85 million shares held by Mr Donoghue, which were offered back to the company when he resigned.

- NZPA