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REAL estate, hospitality and entertainment group KOP Limited entered into a placement agreement with businessman Sam Goi Seng Hui last Friday, where Mr Goi will subscribe for up to 221,592,443 new ordinary shares at a placement price of S$0.05 each which will raise up to S$11.08 million for KOP.
The placement price represents a discount of about 4.76 per cent to the volume weighted average price of S$0.0526 as at Oct 5 for each share of the company.
Upon completion of the proposed placement, it will represent 20 per cent of the enlarged share capital of KOP Limited.
Mr Goi is the executive chairman of global food and beverage manufacturer Tee Yih Jia Group and GSH Corporation. He also has investments in listed and private entities spanning various industries, such as food and beverage, consumer essentials, recycling, distribution and logistics.
In a filing to the Singapore Exchange (SGX) on Saturday, the company said that Mr Goi's subscription of the placement shares is for investment purposes only, and he will not be holding the placement shares on trust or as a nominee.
According to the placement agreement, Mr Goi will nominate a non-executive director and an independent director on the board upon completion.
While the proposed placement will result in Mr Goi holding more than 15 per cent of the shareholding, it will not have any effect of transferring a controlling interest in the company. Following the proposed placement, the controlling shareholders will hold 47.78 per cent of the enlarged share capital of the company, down from the current 59.35 per cent.
KOP directors said that after taking into consideration the present bank facilities, the working capital available to the group is sufficient to meet its present requirements.
Regardless, the company said that it intends to use the estimated net proceeds of about S$11.08 million to support business development and expansion.
It may be placed in deposits with financial institutions or invested in short-term money market instruments or used for any other purposes on a short-term basis as the directors deem fit in the interests of the group, added KOP Limited.
The company said that it will make periodic announcements on the utilisation of the net proceeds when they are disbursed and whether such use is in accordance with the stated use and the percentage allocated.
Completion of the proposed placement will take place seven business days from the date on which the listing approval is obtained, subject to certain conditions.
RHT Capital, the sponsor of KOP, will be making an application on its behalf to SGX.