AGV Group rights issue 53.4% subscribed, raises net proceeds of S$5.1m

CATALIST-LISTED AGV Group on Tuesday said it has raised net proceeds of S$5.1 million from its rights issue, which was 53.4 per cent subscribed.

The group, which provides hot dip galvanising services to steel fabricators, in February proposed to undertake a renounceable non-underwritten rights issue to raise net proceeds of between S$3.6 million and S$19.3 million. It had planned to issue up to 929.7 million new rights shares at 2.5 Singapore cents apiece, on the basis of five rights shares for every one share held by shareholders.

In a bourse filing on Tuesday, AGV Group said it received valid acceptances for 209.7 million rights shares, and valid excess applications for 286.8 million rights shares. Taken together, these represent 53.4 per cent of the total number of rights shares available for subscription under the rights issue.

Executive chairman of the group Chua Wei Kee had previously given an irrevocable undertaking to subscribe for the rights issue. He is entitled to 75 million rights shares and had applied for 125.2 million excess rights shares. However, to avoid the 30 per cent trigger point for a mandatory general offer, his application has been scaled down to 184.8 million rights shares, from 200.2 million rights shares.

This would result in Mr Chua holding 199.8 million shares, representing 29.95 per cent of the firm's enlarged issue share capital after the completion of the rights issue. The consideration for these alloted shares has been paid for by offsetting about S$4.2 million against monies owed to Mr Chua by the firm, with the remaining S$470,000 paid to the company in fresh funds, AGV Group said.

The company has raised net proceeds of S$5.1 million, after deducting estimated professional fees and related expenses of S$228,000 incurred from the rights issue. It intends to use S$2.1 million, or 41.9 per cent of the net proceeds, for general working capital, and about S$3 million, or 58.1 per cent of the net proceeds, for working capital and capital expenditure for the group's operations in Malaysia.

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After taking into account the scaling down of Mr Chua's subscription, a total of 481.2 million rights shares will be listed and quoted on the Catalist board on July 8. Trading of these shares will commence with effect from 9am on the same day.

Shares of AGV Group closed at 4.2 Singapore cents on Monday, up 0.2 cent or 5 per cent, before this announcement.