Stratech proposes to undertake rights issue to raise up to S$31m (Amended)

THE Stratech Group proposes to undertake a rights issue to raise up to S$31 million in net proceeds, partly to repay its short-term and interest-free loans.

The renounceable non-underwritten rights issue of up to 313.44 million new shares will be issued at 10 Singapore cents apiece.

Undertaking shareholders - executive chairman David Chew and his wife Leong Sook Ching, the group deputy chairman - have indicated their support for the rights issue to subscribe for their respective rights entitlements. Assuming that the rights issue is fully subscribed, they will have a total of 33.99 per cent interest in the enlarged share capital of the company.

Stratech said on Thursday night that it will be seeking specific approval from shareholders at an extraordinary general meeting in relation to the rights issue and the proposed whitewash resolution to waive the requirement for undertaking shareholders to make a mandatory offer.

The surveillance solutions provider had on Monday disclosed that the two controlling shareholders will also convert S$2 million to S$3 million of existing loans to equity.

The company started trading its shares on Friday after a three-day trading halt, with the share price unchanged at 12.6 Singapore cents as at 10.02am.

Amendment Note: An the earlier version of the story mentioned that the net proceeds from the rights issue will mainly be used to repay short-term and interest-free loans. This is incorrect. The story has been changed to reflect this.