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News & Analysis UK

Monitise To Raise ??32 Mln In Equity Fundraising, Extends Deal With Visa, Shares Up - Update

July 13, 2010, Tuesday, 11:51 GMT | 06:51 EST | 15:21 IST | 17:51 SGT

(RTTNews) - Mobile banking services provider Monitise plc, (MONI.L) said Tuesday it is planning to raise GBP 32.4 million through equity offering. Additionally, the company said it has extended its Global Alliance Agreement with Visa Inc. by one year to 2015. Shares of the company are currently trading up over 11%.

Monitise will raise GBP 23.6 million by placing new shares at an issue price of 20.75 pence per share, a discount of 1.2% to the closing mid-market share price of 21 pence per share on July 12. GBP 6.6 million will be raised through the subscription of 32 million new ordinary shares by Visa International Service Association, a subsidiary of Visa Inc., and GBP 2.1 million through the subscription of 10 million new ordinary shares by First Eastern Ltd.

Upon completion of the subscriptions, Visa's shareholding in Monitise will rise to 14.4%.

According to Monitise, funds raised of GBP 31 million, net of expenses, together with the group's cash balance of approximately GBP 13 million will enable the group to become cash generative without the need for further equity funding.

Revenues for the year ended June 30 is estimated to be approximately GBP 6 million, much higher than GBP 2.7 million in the prior year. Revenues for the second half jumped 170% to GBP 4.3 million from GBP 1.6 million in the same period last year.

Transactional revenues for the full year are estimated to be GBP 2.9 million, up 480% from GBP 0.5 million a year ago and transactional revenues in the second half are estimated to be GBP 2.1 million, a six fold increase from the same period last year.

Monitise currently has more than 2 million registered customers in the UK and the USA, having more than doubled the number of registered customers since October 2009.

Further, Monitise's said that it has extended the Global Alliance Agreement with Visa by one year to 2015. Also the minimum fees payable to Monitise by Visa under the agreement has increased to US$16 million from US$13 million.

"The continued investment by Visa and First Eastern and the fully underwritten placing announced today will enable Monitise to continue our strategy of developing our global franchise and expanding services in target markets," said, Duncan McIntyre, Chairman of Monitise.

Upon completion of Visa's subcription in the new offering, Elizabeth Buse, Group Executive, International, for Visa Inc., will be appointed to the Monitise Board.

Buse said, "As the momentum continues for mobile money services across the globe the opportunity for Visa remains significant as we continually look for new ways to innovate and bring the benefit of Visa electronic payments to more people in more places."

"With the continued investment and strengthening of our strategic relationship with Monitise this ensures Visa remains at the forefront of this momentum and demonstrates our ambition to provide Visa mobile services to our customers in key markets around the world," she concluded.

MONI.L is currently trading at 23.50, up 2.50 pence or 11.90% on a volume of 2.31 million shares on the London Stock Exchange.