Aspial Lifestyle proposes S$84.8 million rights and placement issue to fund pawnbroking, lending businesses

[SINGAPORE] Consumer lifestyle group Aspial Lifestyle on Thursday (May 14) announced a proposed equity fundraising exercise to raise gross proceeds of about S$84.8 million.

The fundraising exercise comprises a non-renounceable preferential offering which will raise about S$24.8 million, as well as a private placement, which will raise about S$60 million. They are both priced at S$0.402 each, which represents a discount of about 8.1 per cent to the volume-weighted average price of S$0.4375 per share.

This benchmark price was based on the trades done on the Singapore Exchange (SGX) on Wednesday, the last full market day prior to a trading halt called before market open on Thursday morning.

The company moved from the Catalist board to the SGX mainboard on May 4.

Dual-pronged fundraising

Under the private placement, 149.3 million new shares will be issued to institutional, accredited and other investors. DBS, OCBC SAC Capital and UOB have been appointed as joint placement agents.

For the preferential offering, 61.7 million new shares will be offered to eligible shareholders on the basis of one preferential offering share for every 30 existing shares held as at the record date of 5 pm on May 22.

Controlling shareholders Aspial Corp and non-executive chairman Koh Wee Seng have provided irrevocable undertakings to subscribe for their full provisional allotments of 43.7 million and 6.1 million preferential offering shares, respectively.

Koh has also entered into a sub-underwriting agreement to subscribe for up to five million unsubscribed preferential offering shares without receiving a sub-underwriting fee. SAC Capital will underwrite the remaining preferential offering shares.

Fuelling strategic growth

Aspial Lifestyle – which has the Maxi-Cash, Lee Hwa and Goldheart brands in its stable – plans to deploy the bulk of the funds towards strategic growth initiatives.

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About S$67.8 million, or 80 per cent of the gross proceeds, is earmarked for general corporate activities.

These activities include business expansion, investments into the group’s growing pawnbroking and secured lending businesses, as well as potential strategic acquisitions.

Another S$15.3 million, or 18 per cent, will go towards general working capital requirements and the repayment of bank borrowings. The remaining S$1.7 million will cover estimated professional fees and expenses related to the fundraising.

The board stated that the exercise will strengthen the group’s financial position and provide the flexibility to seize growth opportunities in the pawnbroking and secured lending sectors, which it believes has demand and long-term potential.

Furthermore, the issuance of the 211 million new shares is expected to expand the company’s free float. The group’s total number of issued shares, excluding treasury shares, will increase from 1.9 billion to 2.1 billion, which is anticipated to improve the trading liquidity of the stock.

The private placement shares are expected to be listed and commence trading on May 25, while the preferential offering shares are slated for listing on Jun 17.

Shares of Aspial Lifestyle closed flat at S$0.44 on Wednesday, before a Thursday trading halt, while those of Aspial Corp rose 0.6 per cent to close at S$0.165.