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Elektromotive proposes rights cum warrant issue

ELEKTROMOTIVE Group is planning to carry out a rights cum warrant issue that is expected to raise gross proceeds of at least S$1.96 million based on the irrevocable undertakings that it has secured, excluding any exercise of the warrants.

This issue, made on a renounceable non-underwritten basis, will see the company issuing up to 1,628,195,060 new ordinary shares at the issue price of S$0.0045 apiece, with up to 3,256,390,120 free warrants. Each warrant will carry the right to subscribe to one new ordinary share in the company at an exercise price of S$0.005 each.

The issue price of S$0.0045 per rights share and the exercise price of S$0.005 represents a discount of 35.71 per cent and 28.57 per cent to the closing price of S$0.007 per share on Jan 19 - the last full market day when the shares were traded on the Catalist immediately before the announcement was made.

The company will be seeking approval of the move from shareholders with an extraordinary general meeting.

Separately, Elektromotive also said on Tuesday that its sponsor, RHT Capital Pte Ltd, had told it on Dec 4, 2014 that the latter "does not wish to renew their mandate to act as continuing sponsor of the company" when the mandate expires.

"RHT has confirmed that, as at the date of this announcement, it is not aware of any non-compliance with the Catalist rules by the company that has not been brought to the attention of the exchange," Elektromotive said.

"RHT shall remain as continuing sponsor until March 7, 2015 or such earlier date as may be agreed by the company, the new sponsor and the exchange."

Elektromotive also said that it is "actively" looking for a new continuing sponsor and will provide updates on this matter.