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8Telecom fails to get SGX nod for issuance of new shares

8TELECOM International Holdings has not been given the green light by the Singapore Exchange (SGX) to issue new shares,  including those that it had intended to issue to pay for the partial acquisition of China Commodity Market and China Commodity Centre.

The company, in a regulatory filing on Sunday night, announced that it had received a letter from the SGX on Feb 8 stating that the bourse regulator has rejected its applications to issue new shares for various purposes.

Of the proposed new shares, 8Telecom had intended for 16 million new ordinary shares to be used as payment to the vendors for its acquisition of 51 per cent of China Commodity Market and China Commodity Centre.

The SGX has, after its rejection, requested the mainboard-listed telecommunications infrastructure solutions company to disclose the steps that it will take to recover an aggregate loan of S$2.06 million from China Commodity Market and China Commodity Centre. 8Telecom has intended for the loan be partially offset against the payment for acquisition of the two Chinese companies.

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Currently, 8Telecom is in discussion with these two companies with regard to revising the acquisition terms.  It said that it had received the SGX's notice only on Friday evening. Since the vendors are not in Singapore, the parties were unable to finalise agreement on the revised terms of the proposed acquisition. The company will update shareholders when the parties have agreed on the revised terms of the proposed acquisition.

8Telecom announced that it remains keen on acquiring the companies. It has resubmitted the circular in relation to the proposed acquisition to the SGX last November and is awaiting the regulator's decision on this matter.

Therefore, the company would not be taking active steps to recover the loan while it is negotiating the revised terms of the proposed acquisition. However, it said that it reserves its rights to demand repayment of the loan in the event that the negotiation fails.

As for the issuance of 16.88 million and 5.44 million new shares to Top Capital Securities, and two individuals Cai Miao and Peng Yun respectively, 8Telecom is in discussion with the respective parties on these proposed placements and will update shareholders accordingly.