China Fishery proposes 4-for-5 rights issue; major shareholder backs proposal

CHINA Fishery Group has proposed to undertake a rights issue of up to 1.7 billion new ordinary shares on the basis of four rights shares for every five existing ordinary shares.

The rights shares will be priced at 17.3 Singapore cents for each rights share, which represents a discount of about 33.5 per cent to the closing price of 26 cents per share on the Singapore Exchange as at Feb 9, the last trading day immediately before the announcement.

China Fishery said that it intends to use the net proceeds, together with other fundings of the group, to finance the redemption of the US$250 million notes due in 2017 issued by the Copeinca Group.

The remaining proceeds, if any, will be used for general working capital purposes or to reduce borrowings.

"We remain committed to the early redemption of the Copeinca notes which are due in 2017. It is an important step in our objective of reducing borrowings and strengthening the balance sheet," said China Fishery managing director Ng Joo Siang.

Maybank Kim Eng Securities Pte Ltd has been appointed to act as the manager in connection with the proposed rights issue. The proposed rights issue is subject to approval from China Fishery shareholders.

China Fishery's largest shareholder Pacific Andes Resources Development Ltd, which owns a 70.5 per cent stake, said that it has, through its subsidiaries, irrevocably undertaken to subscribe in full for their entitlement to the rights shares of China Fishery. The aggregate value of its subscription is about S$199.7 million.