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Energy Mad to raise $2.24M in rights issue at 13% discount

Energy Mad, the unprofitable energy efficient light bulb marketer, wants to raise up to $2.24 million in a discounted rights issue to firm up its books and help fund its growth plans.

The Christchurch-based company plans to make a four-for-five pro-rata renounceable offer to existing shareholders at 6.5 cents apiece, a discount to the last trading price of 7.5 cents. Cornerstone shareholder SuperLife, the fund manager recently acquired by stock market operator NZX, will underwrite the offer up to $1.8 million, the company said in a statement.

"MAD intends to use the proceeds of the rights offer to further improve its financial position following the recent substantial cost cutting exercise, and to pursue growth under its new outsourced sales model," it said.

The rights issue comes after shareholders today approved resolutions at a special meeting in Christchurch to let SuperLife subscribe to shares and convertible notes that could lift the fund manager's stake in the company to as much as 89 percent.

The offer opens on March 11 and will close on March 31.