CATALIST-listed Zico Holdings : 40W 0% has entered into a conditional placement agreement that will raise S$2.7 million and give placee and existing shareholder Nik Norzul Thani Hassan Thani a 10.57 per cent stake of its enlarged share capital, it announced on Friday (Apr 14). The placee will become a substantial shareholder.

The agreement is for the subscription of an aggregate of 30 million ordinary shares in the professional service firm, at an issue price of S$0.09 per placement share – which represents a 34.2 per cent premium over its last traded price of S$0.067 at market close on Friday.

Upon completion of the placement, the company will have an issued and paid-up capital of close to 379.9 million ordinary shares.

Dr Nik, who is a director in several indirect subsidiaries of Zico Holdings, currently already holds some 10.2 million shares representing 2.91 per cent of the company’s existing issued share capital.

He has been supporting the company as an adviser.

The placee was introduced to the company by its managing director Chew Seng Kok. Chew was previously managing partner in Malaysian law firm Zaid Ibrahim & Co, while the placee is its chairman of over 10 years.

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That Dr Nik is a director of several indirect subsidiaries of ZHI group is “primarily due to the compliance requirements in the regulated entities”, said Zico Holdings, adding that he has also been appointed as the chairman of Zico AA and Zico Trust. 

He is willing to subscribe for the placement shares at a 34.2 per cent premium as he is aware of the group as a service provider and acknowledges that the shares of the company are illiquid, the company said.

It added that he views the placement as an opportunity to obtain a strategic block in the company and he noted an increase in revenue in the advisory and transactional services based on Zico Holdings’ unaudited full-year results for FY2022.

The company added that 70 per cent to 75 per cent of the funds raised are expected to go towards working capital and general corporate purposes, mainly to improve its cash flow to further support the working capital requirements of operational costs. The remaining 25 per cent to 30 per cent will be used for opportunistic acquisition.

The proposed share placement is conditional upon in-principle approval being granted by the Singapore Exchange for the listing and quotation of the new shares, among other things.

Completion of the placement will take place no later then seven market days after the fulfilment of conditions set out in the subscription agreement, Zico Holdings said. Shares of the company closed down S$0.001 or 1.47 per cent to S$0.067 on Friday, before the announcement.