Wellnex Targets $22.1M Capital Raise at $0.65 Per Share in Entitlement Offer

Entitlement Offer Details and Purpose

Wellnex Life Limited (ASX: WNX) has launched a significant capital raising initiative via a non-renounceable entitlement offer, inviting eligible shareholders to acquire one new share for every existing share held at an issue price of $0.65. The offer is expected to raise up to approximately $22.1 million before expenses, with no minimum subscription and no underwriting arrangement.

The proceeds from this offer are earmarked primarily for redeeming Wellnex's outstanding convertible notes, settling deferred consideration related to the Pain Away business acquisition, and bolstering general working capital. This financial strengthening is positioned to support Wellnex's ongoing operations and strategic ambitions, including its proposed admission to the AIM market operated by the London Stock Exchange.

Strategic Context and AIM Listing

Since its relisting on the ASX in 2021, Wellnex has expanded its portfolio of health and pharmaceutical brands, achieving over 100% year-on-year sales growth in the first half of FY25. The company’s ability to secure partnerships with global players such as Haleon underscores its growing market presence and operational pedigree.

The entitlement offer is being conducted in tandem with Wellnex’s marketing efforts for the AIM listing, which remains subject to regulatory approval and is not guaranteed. The offer is independent of the AIM listing’s completion, allowing shareholders to participate regardless of the listing outcome. Should the AIM listing proceed, any shortfall shares not taken up by existing shareholders may be placed with new investors as part of the AIM capital raise.

Offer Mechanics and Shareholder Impact

Eligible shareholders as of the record date (7:00pm Melbourne time, 13 February 2025) will receive personalised application forms. The offer is non-renounceable, meaning entitlements cannot be traded or transferred, and shareholders who do not participate will face dilution of their holdings.

Wellnex anticipates issuing approximately 34.1 million new shares if fully subscribed, effectively doubling the number of shares on issue from around 34.1 million to approximately 68.2 million. The company also has shareholder pre-approval to issue additional shares to advisors and under ASX Listing Rules, potentially increasing the total shares on issue to over 75 million.

The company has disclosed scenarios illustrating the potential impact on major shareholders’ voting power, highlighting that participation levels and shortfall placements could significantly affect shareholding percentages.

Risks and Considerations

Wellnex’s offer booklet candidly outlines numerous risks, including execution of business strategy, competitive pressures, reliance on key suppliers and retailers, regulatory compliance especially in the medicinal cannabis sector, and the speculative nature of the investment. The voluntary administration of joint venture subsidiaries involved in medicinal cannabis adds a layer of operational uncertainty.

Investors are advised to consider these risks carefully and consult professional advisers before participating. The offer booklet also notes that the AIM listing and the capital raise are subject to regulatory approvals and market conditions, with no guarantees of success.

Next Steps for Investors

The offer opens on 17 February 2025 and closes on 26 February 2025, with new shares expected to commence trading on a deferred settlement basis on 27 February. Wellnex has appointed Reach Markets Pty Ltd as lead manager to assist shareholders and investors with enquiries and applications.

Joint Managing Director Zack Bozinovski will provide a live shareholder briefing to discuss the offer, underscoring the company’s commitment to transparency and shareholder engagement during this pivotal phase.