Raffles Education to issue convertible bonds, placement to repay loans

Kelly Ng

Published Wed, Jun 8, 2022 · 12:00 AM

RAFFLES Education : NR7 0% is seeking to raise S$26.2 million in convertible bonds to repay existing loans and for general working capital, the company said in a bourse filing late Tuesday night (Jun 7).

The bonds are due 5 years from the issue date and will bear a coupon of 6 per cent per annum, payable on a semi-annual basis. They are proposed to be offered on a renounceable basis to entitled shareholders on the basis of 19 bonds for every 1,000 shares held.

Taking into account a bond price of S$0.85, being 85 per cent of the principal amount of each convertible bond, each conversion share is priced at about S$0.055, or a discount of approximately 9.8 per cent to the security’s closing price of S$0.061 per share on Tuesday.

Chief executive officer and chairman Chew Hua Seng intends to subscribe for his pro-rata entitlement to the bonds under the rights issue. Chew holds 463 million shares directly and indirectly, representing about 33.6 per cent of the company’s existing issued share capital.

The mainboard-listed company will also issue a placement of S$17.9 million in convertible bonds in a bought deal arrangement with UOB Kay Hian Holdings. The conversion price of S$0.065 for the placement represents a premium of about 6.6 per cent over Tuesday’s closing price.

Raffles Education’s board of directors said the proceeds raised will be timely to supplement the group’s internally generated cash flow to meet its ongoing financial obligations.