-- Wellington announces fully supported rights issue to fund continued growth

Wellington Drive Technologies Limited (Wellington), a leading provider of 
Internet of Things (IoT) solutions and energy efficient motors to the retail 
food and beverage industry, today announced its intention to raise
approximately $5.3m of new capital through a fully supported pro-rata rights 
issue. This announcement is on the back of strong year-to-date results that 
demonstrates improving profit performance, plus an expanding array of growth 
opportunities, including the recently announced new North American IoT project.

Wellington's Capital Committee Chairperson, Gottfried Pausch commented, "With 
continually improving operating performance and an exciting funnel of growth 
opportunities the board believes now is the right time
to increase the company's growth investment. We appreciate the support of those 
shareholders that have committed to support this rights issue and we invite 
other shareholders to also participate. This new capital
will let Wellington accelerate its product development and business development 
capability, so that it can grow revenue consistent with its 2023 growth target 
and further increase earnings and cash generation".


Funding Details

To ensure Wellington can successfully execute new growth projects, continue to 
add the necessary skills in sales and IoT engineering and successfully launch 
new products planned for 2020, Wellington intends to raise approximately $5.3m 
from a pro-rata rights issue.

The key features of the offer include:

- Raise approximately $5.3m through a 1:5 pro-rata rights issue at 10 cents per 
new share;
- The offer is expected to close in November with the new shares issued early 
in December 2019;
- The issue is 100% committed with either underwrite agreements or firm 
pro-rata rights commitments.


Use of funds:

- New IoT business opportunity: Develop a new Connect SCS product and hire 
customer support resources for the new IoT business opportunity with one of the 
largest manufacturers of commercial coolers in the Americas (the opportunity 
previously disclosed in the company's 2019 Interim report). This new product 
has an approximate development cost of $1m to $1.5m. Revenue is estimated to 
start Q4-2020, with full production revenues estimated at $2 to $4m annually 
from 2021. This project is in the latter stages of negotiation. Wellington's 
confidence at this stage of negotiations stems from the
fact there is an existing long-standing commercial relationship with this 
customer on another line of business. The Wellington board has approved the 
commencement of early development work on 
customer specific applications.

- New Product Launches: Ensure the successful completion and launch of other 
new products launching in 2020. New hardware includes the ECR2+, a new version 
of the successful ECR2 platform; Connect SCS Black, a Connect IoT device 
specifically targeted at large scale new build coolers; Connect Monitor, a new 
IoT device to allow retrofit in a broader range of coolers; Connect Network, a 
new 'always on' IoT device; and new apps including one that helps store owners 
manage the in-store cooler or display shelves. 

- Develop the food service market: Fund entry into the food service market with 
new IoT hardware and data solutions. Market entry has already commenced in New 
Zealand with SKOPE Industries. Deploy sales and technical resources that are 
closer to the main USA market for food service.

- iProximity platform development: Market development in support of expanding 
the company's iProximity platform sales which includes technical marketing 
resources to explore new areas such as smart venues and non-refrigeration based 
digital marketing. The expansion of iProximity sourcing relationships to 
support the growth of proximity marketing devices used for non-refrigeration 
customers.

- Expanding sales and technical capability: Expanding the USA and Western 
European sales teams to win new customers for Wellington's IoT solutions, ECR2 
and ECR2+ motors. Continue the expansion of the company's software and hardware 
teams to improve capability and accelerate time to market for new products. 

- Repay high cost debt: Wellington has a $1m loan from Onimeg Investments 
Limited and a US$0.6m loan from Meta Capital Limited which are both repayable 
on 31 March 2020. Proceeds from this issue will be used to repay these loans on 
or before the due dates resulting in annualised savings of $250k in interest 
costs. Total annualised savings including the partial repayment of the Onimeg 
loan in September 2019, is approximately $500k.

This rights issue has been approved by the independent Directors of Wellington.


Governance note

Acting Chairman John McMahon is the sole director and shareholder of Meta 
Capital Limited. Meta Capital has loaned US$0.6 million to Wellington on 
arms-length terms and this loan is due for repayment on 31 March 2020. Part of 
the proceeds of the capital raising will contribute towards repayment of this 
loan. In addition, Mr McMahon is a director of NZX Limited, the parent company 
of Smartshares Limited, which is a substantial product holder of Wellington 
with 27.478% of the issued ordinary shares of Wellington as at 6 June 2018 
(being the date of its most recent substantial product holder disclosure). 
Given these factors, Mr McMahon is deemed to be "interested" in the Offer. 
Accordingly, he has not participated in discussions or information where a 
conflict of interest may arise and has been recused from all Wellington Board 
decisions relating to the Offer. Mr McMahon is not an independent director of 
Wellington.

About Wellington Drive Technologies:
Wellington is a leading provider of IoT solutions, cloud-based fleet management 
platforms, energyefficient electronic motors and connected refrigeration 
control solutions. It serves some of the world's leading food and beverage 
brands and refrigerator manufacturers and offers proximity-based marketing for 
Smart Cities to the Australian market. Wellington's services and products 
improve sales, decrease costs and reduce energy consumption. Headquartered in 
Auckland with a global reach, Wellington is listed on the New Zealand stock 
exchange under the ticker symbol NZ:WDT For further information visit 
www.wdtl.com

SOURCE: Wellington Drive Technologies Ltd