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Chip Eng Seng 1-for-4 rights issue draws poor interest

POOR interest from minority shareholders has resulted in Chip Eng Seng insiders taking up the bulk of shares in its controversial rights issue.

The property and construction group said on Monday that controlling shareholders Celine and Gordon Tang will subscribe for 73.3 million rights shares or 46.85 per cent of all the rights shares being issued, as part of their sub-underwriting agreement.

The 1-for-4 rights issue announced in August has attracted total valid acceptances and excess applications of 83.2 million or 53.15 per cent of all shares offered.

This number includes the irrevocable undertakings from the Tangs and chief executive Raymond Chia to subscribe for their share of the rights, which account for approximately 31.51 per cent of all shares offered.

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The rights were offered at 63 Singapore cents per share, higher than Chip Eng Seng's market price of 62.5 Singapore cents on Monday. 

The Tangs stand to receive a sub-underwriting fee of 1.5 per cent of the gross proceeds from the underwritten rights shares, as part of the sub-underwriting agreement.