Blumont slashes rights offering price from 0.675 cent to 0.2 cent

BLUMONT Group has cut the price for its rights offering to 0.2 Singapore cent per rights share from 0.675 Singapore cent per rights share because of recent market conditions, the mining company announced on Monday after the market closed.

Blumont is offering one rights share for every two existing shares held.

In June, the company had announced the rights offering which would have raised about S$9.57 million in net proceeds if fully subscribed at the initial price. At the revised price, the company will raise net proceeds of just S$2.76 million.

The use of proceeds will not change, however. The company still plans to use 70 per cent of the net proceeds to make a partial repayment on a loan agreement with Wintercrest Advisors. The remainder of the net proceeds will be used as working capital.

In March, Wintercrest had given Blumont until March 2016 to repay US$21.5 million. At least 50 per cent of that loan amount was due by Sept 16, 2015, and at least 75 per cent was due by Dec 13, 2015.

Blumont shares closed flat at 0.6 Singapore cent on Monday.