Engin: We've blown $26m; we got it wrong, now give us $8.4m to keep afloat

25 February 2008

Having blown the $26 million that Seven Network pumped in when it took a 33 percent stake in 2006,
  VoIP provider Engin has terminated its ambitious triple play
intentions and is asking shareholders for another $8.4m just to keep it
in business.

The company has announced a rights issue to raise $8.4 million by
offering 281 million shares at three cents each, a 37.5 percent
discount on their closing price on 22 February. And it has providedi
its long suffering shareholders with remarkably little information on
what it intends to do with their money.

Just about the only information in the 34 page prospectus is contained
in chairman Ian Smith's letter in which he says the money is needed to
"address the immediate cash burn issue; to provide the funding needed
to complete the strategic restructure of the business [and] provide
capital to grow the subscriber base in the broadband telephony
environment and allow the business to consider deploying additional
complementary products such as broadband and TiVo and provide ongoing
working capital."

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