Aspen proposes placement to raise up to S$23.8m as firm eyes mainboard transfer

CATALIST-LISTED Malaysian property developer and soon-to-be glove maker Aspen (Group) Holdings is proposing to place up to 100 million new shares in the company - at an issue price of 23.8 Singapore cents apiece - to raise up to S$23.8 million, it announced on Monday.

This comes after the firm last month said it intends to transfer its listing to the mainboard, in a bid to boost visibility in the market to help future fundraising efforts.

The placement price represents an 8.5 per cent discount to the counter's volume-weighted average price of 26.01 Singapore cents on Nov 5, being the last full market day preceding the signing of the placement agreement.

In a bourse filing on Monday, Aspen said it decided to undertake the placement to meet the minimum shareholding spread requirements applicable to mainboard listing applicants, and to strengthen the group's financial position and flexibility to capitalise on growth opportunities.

PrimePartners Corporate Finance is the placement agent for the proposed placement, which is not underwritten. According to the placement agreement, PrimePartners has agreed to procure purchasers and/or subscribers on a "best endeavours basis", Aspen noted.

As at Nov 9, the placement shares represent about 10.2 per cent of the firm's existing issued share capital and will represent about 9.2 per cent of its enlarged issued share capital of 1.08 billion shares, assuming that all the placement shares are placed out.

Based on this assumption, net proceeds from the placement after deducting estimated fees and expenses amount to about S$23.2 million, Aspen said.

The bulk, or 80 per cent of the net proceeds, will go towards capital expenditures for the growth of the group's business, including the construction of the first phase of its rubber glove manufacturing facilities. The remainder will be used for general working capital purposes, including meeting general overheads and other operating expenses.

On a pro forma basis, Aspen's loss per share would be reduced to 1.28 sen after the proposed placement, from 1.40 sen, while its net tangible asset would increase to 42.69 sen from 39.78 sen.

Aspen shares last traded at 26.5 Singapore cents on Nov 5, up one cent or 3.9 per cent. The company has since requested the lifting of a trading halt it called last Friday, pending this announcement.

On Oct 27, Aspen shares surged 25 per cent after it announced plans to transfer its listing to the mainboard the day before. Two days later, the counter again saw heavy trading after getting the green light from Malaysia's trade ministry to produce medical-grade examination gloves.