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Anchor Resources proposes S$2.2m share placement for bond repayment

ANCHOR Resources is placing 143.8 million new shares at S$0.0153 apiece to 18 subscribers to raise S$2.2 million for debt repayment, the Malaysian goldmine operator said on Tuesday in a regulatory filing. 

The issue price represents a 10 per cent discount to Anchor Resources’ volume weighted average price of S$0.017 on April 3, before trading was halted for the deal to be announced. The counter was trading at S$0.021 as at 2.16pm on Tuesday after the halt was lifted in the morning.

The subscribers were introduced by investor Tan Ong Huat, who will receive some of the proceeds as repayment for Anchor Resources bonds that he holds plus 10.1 million new shares as an introducer fee.

The placement and introducer shares represent about 12.37 per cent of Anchor Resources' enlarged share capital. 

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Out of the S$2.15 million in net proceeds, S$1.39 million will be used to help redeem S$1.655 million of bonds held by Mr Tan that were originally due on April 3, 2019 but for which the maturity date has been extended to May 3, 2019. Mr Tan also holds 68 million free unlisted warrants exercisable into shares of Anchor Resources, and S$1.903 million of bonds due 2020.

The remaining S$762,500 of the proceeds will be used to repay investors Lim Chiau Woei, Tan Beng Kiat and Kok Kai Jok, who also hold bonds originally due April 3, 2019 but for which the repayment date has also been pushed to May 3.

Anchor Resources said that it had originally planned to pay off the two tranches of bonds by tapping a redeemable equity-linked notes facility offered by Advance Opportunities Fund and Advance Opportunities Fund I.

"However, the company had the opportunity to carry out the placement and therefore decided to carry out the placement", the company said. The company will therefore withdraw an earlier plan to draw down the first tranche of the redeemable equity-linked notes facility.

The company said that Mr Tan and all 18 subscribers introduced by him have no connections or business relationships with the company, its directors and shareholders. It added that the placement was "necessary for fundraising purposes and improving the financial position of the company".

Most of the placees will receve shares that represent less than 0.8 per cent of Anchor Resources' enlarged share capital. Only two will receive shares worth 1.05 per cent of enlarged share capital, the largest allocations among the group.

The placement requires approval from the Singapore Exchange and from the Anchor Resources' directors.