Unwired given another six months to find more cash

Stuart Corner
Tuesday, 16 January 2007 11:06

IT Industry - Strategy

Unwired backer Mitsui has extended the deadline of January 2007 by which Unwired was required to find an additional $18 million in funding in order for Mitsui to put between $5 and $8 million into the company.

In August 2006, Mitsui agreed to invest $5 million in Unwired in the form of convertible notes with a five year term and it was also granted an option to subscribe for an additional $3 million of convertible notes on the same terms by 16 December 2006.

However it was not required to provide the cash until Unwired had completed the raising of an additional $18 million over the period to 16 January 2007. This was in alignment with Unwired's commitment made to Intel in 2005, when Intel invested $37 million for 25 percent of Unwired, to raise at least a further $23 million to expand its business.

In its quarterly cash flow statement released today, 16 January, Unwired said Mitsui had extended the deadline to 30 June 2007 "to enable Unwired to further develop its WiMAX transition strategy and evaluate available sources of funding."

CEO David Spence gave no indication of progress on fund raising, saying only "We are focused on running our current business and ensuring our transition to WiMAX is done efficiently and cost effectively."

He added "We have stated previously that additional funds will be needed to grow the business beyond Sydney and Melbourne but we will only do this at the right time and the right price for our shareholders."