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Asiatic Group (Holdings) inks share subscription deal to issue new shares at 65% premium

CATALIST-LISTED Asiatic Group (Holdings) has inked a conditional share subscription agreement that will give the buyer a 14.9 per cent stake in the company, the board said on Friday.

Businessman Stephen Leong, acting through investment vehicle Sincom Holdings, has agreed to subscribe to 232 million new shares at S$0.0165 apiece - or a 65 per cent premium to the last close.

The net proceeds from the deal are expected to come up to around S$3.77 million, most of which will be spent on debts payables, said Asiatic.

It will keep back S$968,000 for working capital needs and S$600,000 for investment in new projects.

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Mr Leong was introduced by business associates of managing director Tan Boon Kheng and was identified by the company in its search for a strategic partner, the board said.

It declared that Mr Leong, who does not hold any shares in Asiatic, does not have any connection to the company, its directors and its substantial shareholders to the best of the company's knowledge.

"The directors are of the opinion that after taking into consideration the cash of the group and the present bank facilities available to the group, the working capital available to the group as at the date of this announcement is sufficient to meet its present requirements," the board added.

"Notwithstanding the foregoing, the directors are of the view that the subscription will set a strong platform for a long-term strategic alliance between the subscriber and the group in the fire protection business and the subscription will strengthen the financial position of the group and put it in a good stead to execute its business plans."

Still, the company cautioned that the subscription is subject to meeting conditions precedent set out in the subscription agreement, which can be inspected at its registered office at 65, Joo Koon Circle.

It said that it would make further announcements to update shareholders "as and when appropriate".

Asiatic closed flat at S$0.01 before the announcement.

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