iCar Asia to raise up to US$17.4m, sticks to current markets

• Opportunities in new markets balanced against winning in M'sia, Thailand, Indonesia
• Largest shareholder Catcha Group with 28.55% commits further A$5m

ICAR Asia Limited (iCar Asia), owner and operator of a network of automotive portals in Malaysia, Thailand and Indonesia, announced on Aug 2 the successful completion of an institutional placement of 54,687,000 ordinary shares at an issue price of A$0.32 per share, representing a 11.1% discount to its close on Aug 30.
 
The placement raised US$13.3 million (A$17.5 million) for the Malaysia headquartered iCar Asia, which had US$9.8 million (A$13 million) cash in hand as of June 30. In conjunction with this, subject to shareholder approval, a further US$3.8 million (A$5 million) has been committed by Catcha Group, within two months. Catcha is iCar Asia’s largest shareholder with 28.55% stake.
 
In addition, non-executive director, Syed Khalil Syed Ibrahim (pic, left) proposes to subscribe to US$379,000 (A$500,000) worth of shares on the same terms and price. On approval, iCar Asia would have raised a total of US$17.4 million (A$23 million).
 
“We’re pleased with the strong demand from both new and existing shareholders. This commitment demonstrates the ongoing support and confidence from investors in our growth strategy and outlook,” said Hamish Stone (pic), iCar Asia CEO.
 
The funds raised will be used to invest in the long-term growth strategy, as iCar Asia looks to capitalise on the growth of car ownership spurred by the increasing purchasing power of the emerging middle class in SEA, coupled with the increases in online new car advertising spend.
 
“We’re increasing our investments in product development, marketing and sales people to capitalise on the opportunity across our markets,” says Stone. Asked about the continued focus on its existing markets, Stone explains that “opportunities in the region to expand to new countries are balanced against being focused on winning the three largest automotive countries in SEA.”
 
Approximately 70 per cent of iCar Asia's traffic comes from mobile devices and it will develop new dealer and consumer apps to improve the overall experience of its customers.
 
Funding will also be used for nationwide marketing in order to extend the business beyond the greater metropolitan areas where it has most traction.
 
iCar Asia expects car ownership in SEA to continue to grow, with GDP per capita now reaching A$5,700 across iCar Asia’s top three markets and a growth rate of over 4 per cent per annum.
 
Vehicle ownership is currently at 113 vehicles per 1,000 people across iCar Asia's markets, compared with 730 vehicles per 1,000 in Australia.
 
Furthermore, the percentage of new car advertising budgets spent online in Malaysia, Thailand and Indonesia is at 10 per cent compared with 47 per cent in Australia.