Alpha Energy proposes S$21.1m rights issue, twice its existing share capital

CATALIST-LISTED Alpha Energy Holdings has proposed a S$21.1 million rights issue to continue funding its Mustang oilfield project in Alaska and pay off a Mustang-related loan, it said on Wednesday.

The rights issue constitutes 200 per cent of its existing share capital and 66.7 per cent of its enlarged share capital. 

It will issue a total of 1.5 billion new shares, at two rights shares for every existing share and an issue price of S$0.014 per rights share. This represents a roughly 74 per cent discount to the weighted average price of S$0.054 per share on June 10, the last trading date of the shares prior to the day of the announcement.

The exercise will raise net proceeds of S$12.1 million, as besides paying for fees and expenses related to the exercise, the company will use S$8.4 million to pay off a term loan from Alaska Tembusu that was used for the Mustang oilfield project's first oil funding needs.

Of the net proceeds, 80 to 90 per cent will be used to continue its Mustang project development works. The remaining amount will be used for the group's general working capital.

Nine parties have provided irrevocable undertakings to subscribe for their respective pro rata entitlement of the rights shares and/or unsubscribed rights shares.

They are LTB LLC, Augustus Trust, Neo Alaska Venture, Pinnacle Investment Holdings LLC, ATB LLC, Ang Yew Jin Eugene, JK Technology Pte Ltd, Sim Eng Kiang, CIMB Islamic Trustee Berhad (acting as trustee for Affin Hwang Multi Asset Fund) and Kenneth Gerard Pereira.

The Affin Hwang Multi Asset Fund (Affin Hwang) might take up 44.6 per cent - the largest portion - of the rights shares entitled to the nine parties. It will take up its entitlement of 400,000 rights shares and any excess rights shares of up to 669.6 million.

Mr Sim and Mr Pereira are taking up their entitlement of 3.8 million and 20,000 shares respectively, but will also take up any excess rights shares of up to 71 million and 50 million respectively.

The oil exploration and production firm will seek shareholder approval for the rights issue at an extraordinary general meeting.

It also hopes to get the nod from shareholders for a possible transfer of controlling interest to Affin Hwang if it takes up enough excess shares with regard to its irrevocable undertaking.

Alpha Energy has called for a lifting of its trading halt, which was initiated on Monday.

The counter closed up S$0.003 or 5.6 per cent at S$0.057 on Wednesday.