Golden Energy and Resources to raise up to S$86.9 million through share placement

MAINBOARD-LISTED coal miner Golden Energy and Resources (Gear) AUE : AUE 0% will place up to an aggregate of 285 million new ordinary shares at an issue price of S$0.305 to raise approximately S$86.9 million.

In a bourse filing late on Friday (Feb 25), the company said that it had entered into a placement agreement, with KGI Securities as its placement agent. The placement price represents a discount of approximately 4.7 per cent to the volume weighted average price of S$0.3199 per ordinary share on Friday.

Assuming the proposed placement is fully subscribed, the company's issued shares will rise to 2,638,100,380, with the placement shares accounting for 10.8 per cent of the enlarged issued and paid-up share capital of the company. The issued shares also represent 12.1 per cent of the issued and paid-up share capital of the company as of Feb 27.

KGI Securities will procure subscriptions on a best endeavours basis and it will not underwrite the proposed placement. The agent will also receive 0.375 per cent of the placement price for each placement share it procures subscribers for.

Assuming the proposed placement is fully subscribed, the net proceeds from the proposed placement will be approximately S$86.4 million, Gear said.

Of the net proceeds raised, 38-63 per cent of the net proceeds will go towards expanding the company's core businesses, potential business investments or acquisitions. The balance would be used for general working capital purposes.

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If the share placement is fully subscribed, the company's pro-forma net tangible assets per share will rise from US$0.1034 to US$0.1164, while its pro-forma earnings per share would fall from US$0.0486 to US$0.0432.

The share placement is still conditional on the company receiving in-principle approval from the Singapore Exchange, among other caveats.

Shares of Gear rose 3.2 per cent or S$0.01 to close at S$0.32 on Friday before the announcement was made.

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