SingHaiyi to raise S$143 million for property investments

Property developer SingHaiyi Group is looking to raise net proceeds of up to about S$143.16 million for property investments through a rights issue.

On Monday, it announced that it is proposing a renounceable non-underwritten rights issue of up to about 1.44 billion new shares at S$0.10 each, to be issued on the basis of one rights share for every two existing shares to shareholders.

Most of the proceeds will go towards property investments, either through direct acquisition of real estate or the acquisition of vehicles holding the real estate, it said.

The remainder will be used for general corporate and working capital.

The issue price represents a discount of 16.7 per cent to the closing price of S$0.12 on Dec 26, and a 11.8 per cent discount to the theoretical ex-rights price of S$0.113 per share.

Majority shareholder Haiyi Holdings, which has a 56.17 per cent stake in the company, has provided an irrevocable undertaking to subscribe for its pro rata entitlement of 806.2 million rights shares, but also all of the rights shares beyond its provisional allotments.

Haiyi Holdings is owned by husband-and-wife pair Gordon Tang, a non-executive director of the company, and Celine Tang, the group managing director.

They have done this to demonstrate their support for the rights issue and confidence in the company, according to the filing to the Singapore Exchange.

Because of the irrevocable undertaking and the savings in costs for the company as a result of not having to bear any underwriting fees, SingHaiyi has decided to proceed with the rights issue on a non-underwritten basis.

It has appointed United Overseas Bank as the manager for the issuance.

The company added that the rights issue will help to strengthen the group's financial position by improving its balance sheet and capital base, and reducing its net gearing.

"It will also provide the group with greater financial capacity and flexibility to capitalise on any investment opportunities in a timely manner as and when such opportunities arise," it said.

SingHaiyi's stock ended 2.4 per cent or 0.3 Singapore cent lower at S$0.12.