Artivision surges after rights issue

SHARES in Artivision Technologies surged by some two-thirds yesterday following the completion of a rights issue which saw the emergence of Ching Chiat Kwong of Oxley Holdings fame as a substantial shareholder.

Yesterday, the stock rose from 2.9 cents to a high of five cents - a whopping 72 per cent - before closing for a net 1.9 cents or 65 per cent gain at 4.8 cents. The two-for-five rights issue at two cents a share saw Mr Ching take up over 17 million rights shares, and an additional 15.2 million unsubscribed shares of Algotech, the vehicle through which executive chairman Philip Soh controls the company.

Mr Ching had earlier invested $5 million in Artivision via a convertible loan, at the conversion price of 20 cents per share, for 25 million shares. Subsequently, he purchased further shares in the open market, to increase his stake to over 43 million shares or 6.8 per cent of Artivision. His cost is estimated at about 15 cents per share. But this average would come down somewhat following his latest purchase of 32 million rights shares, which raises his Artivision stake to almost 76 million or 8.6 per cent. Mr Soh's stake is diluted to 23 per cent via 208 million shares, from almost 28 per cent via 175 million shares prior to the rights. All this comes after Artivision undertook a rights issue of up to 273.4 million new shares to raise gross proceeds of $5.46 million.