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Lorenzo proposes S$9.1 million rights issue, negotiates JV with acquisition party
LORENZO International said on Tuesday it plans to raise as much as S$9.1 million, to be used partly to fund an acquisition of the Asia-rights to a clinical laboratory.
It said it would issue up to 130 million new shares at S$0.07 each, on the basis of one rights share for every two existing shares. The price of the rights share represents a 25.5 per cent discount to the closing price as at December 29, 2014, the last trading day of the shares before the announcement.
It will also issue up to 390 million free bonus warrants, with each bonus warrant carrying the right to subscribe for one new share at an exercise price of S$0.12. One bonus warrant will be issued for every one existing share held.
For every bonus warrant that has been exercised, then, the company will further issue one free company warrant - or a piggyback warrant - which can be exercised at S$0.17. This means it would issue up to 390 million additional piggyback warrants. The rights issue is not underwritten.
Lorenzo on Tuesday said it is negotiating terms over a S$124 million joint venture with Gene ID Party - a clinical laboratory that specialises in DNA sequencing for molecular diagnostics and oncogenetic testing.
The joint venture talks are related to an earlier non-binding agreement announced in October with Genetik Inc to acquire Asia-wide rights to Gene ID.
Under this joint venture, GeneID Party will contribute laboratory services and an imaging centre in Singapore with an indicative valuation of about S$100 million. Lorenzo will contribute up to S$24 million in funds, translating to an interest of up to 20 per cent in the joint venture. The S$124 million is a starting contribution, Lorenzo said.
Lorenzo is known as a furniture retailer in Singapore. It lifted its trading halt at 12.45pm.