Dubber secures loan of up to $5m from Alex Waislitz

One of the troubled firm’s billionaire backers will keep the software company afloat as the corporate regulator investigates $26.6m in missing funds.

Billionaire businessman and investor Alex Waislitz. Picture: Aaron Francis

Melbourne billionaire Alex Waislitz has stepped in to help get listed call recording software company Dubber Corporation out of a jam, with a unit of his Thorney Investment Group lending it up to $5m.

Investors in the listed minnow were left reeling earlier month when Dubber said it had suspended chief executive Steve McGovern after funds totalling almost a third of its market value were “applied for other purposes”. The Australian Securities & Investments Commission has launched an investigation and Dubber is continuing its own probe, looking at avenues for “possible recovery” of the funds.

Dubber is chasing millions of dollars that were diverted away from an interest-bearing term deposit, believed to have been held with National Australia Bank, and it has put its exposure at up to $26.6m.

The company said there were “inconsistencies” in funds purported to have been held in the term deposit account on its behalf by a third-party trustee, and funds may “have been applied for other purposes and are not currently available to the ­company”.

To stay afloat, Dubber has secured bridging finance in the form of a secured loan for up to $5m from Tiga Trading Pty Ltd, which is associated with Thorney Investment Group. This will go to supporting the company’s interim funding requirements.

Just $1.5m is available immediately. The rest will be available once the company strikes an underwriting agreement for a capital raising. A deeply discounted $20m raising is in the works but the company must satisfy investors its systems are in order. The loan is secured by way of security over all company assets and a local subsidiary unit, and Mr Waislitz signalled he would back the business in the longer term despite the missing funds shock.

“Unquestionably we were shocked by Dubber’s recent announcement. Notwithstanding, Thorney continues to believe Dubber has sound prospects, having built a substantial global client base that includes many Tier 1 communications service providers. Accordingly, we are supporting the company’s interim funding requirements through this bridging loan facility,” he said.

Dubber non-executive chairman Neil Wilson said the company’s management was focused on business growth and efficiency objectives but did not elaborate on Mr McGovern’s status. The group considered other funding mechanisms to meet its immediate needs but said alternatives to the Thorney proposal did not stack up, given the urgency of getting funds, as well as its ongoing investigation.

Thorney is a substantial shareholder, but Dubber’s board is satisfied the loan deal was at arm’s length and fair and reasonable. The company sought and was granted a waiver from the ASX to provide the security to Thorney without a shareholder vote. Dubber breached a rule when it first struck the deal, but this has since been remedied.

Dubber’s half-year accounts are yet to be released. It is working with its auditor, Ernst & Young, to release the accounts.