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Pacific Andes Resources Development plans to raise S$195.5m through rights issue
GLOBAL frozen fish supplier Pacific Andes Resources Development Limited (PARD) on Tuesday said it plans to undertake a fully underwritten rights issue of more than 3.83 billion new ordinary shares at an issue price of S$0.051 for each rights share. The exercise will raise S$195.5 million.
This is on the basis of four rights shares for every five existing ordinary shares in the company's capital.
The subscription price of S$0.051 per rights share represents a discount of about 52.8 per cent on the closing price of S$0.108 per PARD share as quoted on Singapore Stock Exchange on Monday, the last trading day immediately before the announcement.
Net proceeds of the proposed rights issue, after deducting estimated expenses of about S$3.2 million, are expected to be about S$192.3 million.
Pacific Andes said it intends to use the net proceeds from the rights issue for general working capital purposes and/or reduction of the company's and/or the group's borrowings, which mainly supports China Fishery Group in the redemption of the Copeinca Notes and to repay existing loan facilities.
Ng Joo Siang, chairman of PARD, said the company has been focusing on consolidating its operations and enhancing the group's capital structure since the start of the year.
"We are on track in delivering on these priorities, with the recent announcement of a solid increase in PARD's net profit, the realisation of gain from the sale of non-core assets, such Tassal Group Limited shares, and now the injection of equity funding from this proposed rights issue. This funding will strengthen the group's equity capital base while not increasing borrowings or interest expense," said Mr Ng.
Pacific Andes International Holdings Limited will be supporting the rights issue in proportion to its shareholding of 66.45 per cent and will use about S$129.9 million to subscribe in full for its entitlement to the rights shares.
PARD has appointed DBS Bank, Maybank Kim Eng Securities and Standard Chartered Securities (Singapore) as joint lead managers and joint underwriters in relation to the rights issue.
The maximum number of underwritten rights shares is more than 1.28 billion.