1 Dec 2010

WDT shares fall on rights issue announcement

7:34 am on 1 December 2010

Shares in Wellington Drive Technologies shares fell by more than half on Tuesday after the company announced plans to raise $8.4 million through a rights issue.

The manufacturer of energy-efficient motors says the size of the business, the global spread of its operations, the pressure for competitive pricing and its limited cash buffer has left it vulnerable to adverse events.

While the company's directors expect a substantial improvement in financial performance in 2011, they want to raise money to order materials in preparation for increased sales.

The company's shares fell 4 cents to 3.5 cents on Tuesday.