Irexchange issues supplementary prospectus

Sue Mitchell
Feb 5, 2019
AFR
Online grocery marketplace Irexchange is issuing a supplementary prospectus to clarify customer numbers and extend its $17.5 million raising.
The move follows a complaint to the Australian Securities and Investments Commission by convertible noteholder James Baillieu, who is suing the company in the Federal Court after unsuccessfully demanding the return of his $1 million investment.
Mr Baillieu has alleged Irexchange made false representations about customer numbers when he invested $1 million in August 2017 and alleges it is making false claims in the prospectus.
Irexchange, a technology platform that enables independent retailers to order directly from food and grocery suppliers, bypassing wholesalers, says it has signed up more than 600 retailers, half of whom are trading regularly. But Mr Baillieu says only about 180 retailers are trading regularly, citing internal information.
It is understood a senior Irexchange consultant’s employment has been terminated and police have become involved.
ASIC contacted the company on Tuesday seeking information about Irexchange’s customer verification process.
A spokeswoman for chief executive Brett Charlton, who has strongly rejected Mr Baillieu’s claims, said Irexchange had opted to update the prospectus to provide additional detail on customer numbers and dispel doubts.
Irexchange is seeking to raise $17.5 million through the issue of 19.4 million shares at 90¢ a share, valuing the company at $74.3 million.
If the IPO goes ahead, convertible notes will convert to ordinary shares at a 25 per cent discount to the IPO price and note holders will emerge with about 37 per cent of the company upon listing. The offer, which was due to close on Tuesday, has been extended for about a week.