282 shareholders to get nothing under LifeBrandz' 50:1 share consolidation

SOME 282 shareholders of LifeBrandz will end up with nothing under the company's proposed 50-to-1 share consolidation as they currently own fewer than 50 shares.

LifeBrandz disclosed this on Wednesday in response to queries from the Singapore Exchange (SGX) on the company's current shareholding distribution. 

Assuming no changes to the shareholding distribution when the books close, "282 shareholders who hold fewer than 50 shares in the company will no longer be shareholders" upon completion of the proposed share consolidation, LifeBrandz said.

The company had proposed the share consolidation last week, in hopes of reducing the volatility of LifeBrandz' share price and fluctuations in the company's market capitalisation.

Subject to the completion of the share consolidation, LifeBrandz also intends to raise funds through a rights issue to repay advances from two shareholders, Bounty Blue Capital and Capital Square Co.

It would see up to 305.8 million new shares issued at a price of S$0.028 for each rights share, on the basis of 25 rights shares for every one consolidated share in LifeBrandz.

So far, LifeBrandz has received irrevocable undertakings from the two shareholders to subscribe for a portion of their total entitlements.

Bounty Blue holds a 25.36 per cent stake in LifeBrandz, while Capital Square has a 12.26 per cent stake.

Noting that Bounty Blue is owned by LifeBrandz' executive chairman and CEO Saito Hiroyuki, SGX also queried LifeBrandz if it had considered to let him abstain from voting at the upcoming extraordinary general meeting (EGM) on the share consolidation and rights issue. 

In the exchange filing signed off by Mr Hiroyuki on Wednesday, LifeBrandz replied that it had looked at other rights issues in the market with similar "offsetting arrangements" of loans or advances made by controlling shareholders who had given undertakings to subscribe for rights shares. 

"In each scenario, the controlling shareholder did not have to abstain from voting at the general meeting," said LifeBrandz. As such, the board thinks that there is no need for Mr Hiroyuki to abstain from voting at the EGM, the company added.