Aoraki receives vital cash boost

Christchurch-based technology company Aoraki Corporation has taken another step towards a sharemarket listing with a $12.2 million injection from two key investors.

The move follows an international search for a cornerstone investor by the accountancy firm PricewaterhouseCoopers.

The new investors - private equity firm i-cap and American entrepreneur Roger Bhole - have been issued capital notes which will convert to equity when the company is floated.

I-cap, a venture capital fund manager and merchant banker with operations straddling New Zealand and the US, will also advise Aoraki on its initial public offering.

Aoraki plans to offer its shares to the public by early 2003.

I-cap managing director Tony Hannon will sit on the board of Aoraki Corporation, as will Mr Bhole.

Mr Bhole, an orthopaedic surgeon by training, is an entrepreneur with interests in several software companies including Filevision, a company that uses Aoraki's Jade programming tool to build its products.

Other new investors are Active Equities and several close business associates of Aoraki founder and chief executive Sir Gil Simpson.

The announcement of outside investment and a timetable for an initial public offering come slightly later than expected for Aoraki, indicating the difficult climate for raising money since the dotcom bubble burst. The company had hoped to have everything set up by early September.

The level of investment also falls into the lower part of an estimated $10 million to $30 million range sought by PricewaterhouseCoopers.

Sir Gil said it was an exciting time for the company.

"We are experiencing considerable international growth for Jade and our other products, and the intellectual and financial capital supplied by our initial investors will be critical to us expanding on this success."

Company spokesman Greg Williamson said the $12.2 million injection would help build on product development work.

"We've got some solid products in healthcare, ports and student management, and we really need some money to expand those markets. We've done the R&D and the money is just to get the sales going."

Sir Gil owns 90 per cent of Aoraki; company employees own the rest. In June, Sir Gil told the Business Herald he was looking forward to the commercial discipline outside investment would mean.

"It's a way of measuring my performance. At the end of the day, the market will be harsh on me if I'm not performing well, and if I'm doing well, I hope it will be kind to me. But I think it's time I had that sort of accountability."

Aoraki, believed to be worth $100 million, had sales of about $60 million in each of the past four years but has struggled to generate profits.

In May it created a new subsidiary, Jade Capital, to encompass five Aoraki divisions focused on developing software for specific markets.