Grand Venture to raise up to S$39.9m through share placement and vendor sale

GRAND Venture Technologies JLB : JLB 0%and its controlling shareholder, Metalbank Singapore, have entered into a placement agreement for the issuance and sale of ordinary shares in the company to raise up to S$39.9 million, the precision manufacturer announced in a bourse filing on Friday.

Through the appointed placement agent CGS-CIMB Securities, the group intends to place out up to 25 million new shares at the issue price of S$1.14, amounting to a consideration of S$28.5 million.

The new shares will represent 8.2 per cent of Grand Venture's existing share capital, and represent 7.6 per cent of the enlarged base.

Metalbank, which holds 94.95 million or 31.05 per cent of Grand Venture, has agreed to offer up to 10 million of its shares for the same issue price as part of the same placement agreement, amounting to a consideration of up to S$11.4 million.

The vendor share sale represents about 3.3 per cent of Grand Venture's existing share capital, and approximately 3 per cent of the company's enlarged share base.

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The placement price of S$1.14 per share represents a discount of 7.8 per cent to the volume weighted average price (VWAP) of its shares at S$1.236, for trades done on Aug 31 and Sept 1, when the group asked for a trading halt the morning of Sept 1.

Grand Venture said it intends to use the proceeds raised from the proposed placement to build on its competencies, customer base and scale of its capacity.

It views the transaction as beneficial for the group as funds raised would provide additional resources and funding for its future strategic investments, acquisitions and capital expenditures for the growth of the business.

The placement is also expected to strengthen the group's financial position and capital base to support the group's operational requirements.

Grand Venture on Sept 1 said it was planning to transfer its listing to the mainboard of the Singapore Exchange (SGX), from its current listing on the Catalist board. It reiterated that the proposed transaction would also allow it to increase its share trading liquidity, public float and shareholder count.

Assuming all 25 million new shares were subscribed for under the proposed placement exercise, estimated fees and expenses of S$1 million, and that the transaction was completed on Dec 31, 2020, the group's net tangible assets (NTA) per share as at end-2020 would have stood at 24.04 Singapore cents instead of 14.87 cents. FY2020 earnings per share (EPS) would have been 1.63 cents as opposed to 2.23 cents.

On a pro-forma basis for the half year ended June 30 assuming the placement was completed on Jan 1, 2020, NTA for H1 FY2021 would have been 28.46 cents as opposed to 21.79 cents; EPS would have been 2.49 cents instead of 3.07 cents.

Shares of Grand Venture last traded at S$1.25 the morning of Sept 1, before the group called for a trading halt.