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Hot stock: F J Benjamin shares actively traded; prompts SGX query

FASHION retailer F J Benjamin Holdings has received yet another query from the Singapore Exchange (SGX) following a spike in its trading volume.

As at 11.52am before Thursday's midday break, the counter was trading 6.1 per cent, or 0.5 Singapore cent higher to 8.7 Singapore cents apiece. Some 39.6 million shares changed hands.

In its response to the SGX on Thursday morning, F J Benjamin clarified that it is unaware of any information not previously announced concerning the company and its subsidiaries, which may explain the "unusual trading activity".

However, it mentioned that the high trading volume could be due to the announcement of a renounceable non-underwritten rights cum warrants issue in October 2017. Furthermore, a press report earlier this week had cited the company as one of 10 companies to look out for in 2018, it said.

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SGX's latest query is the second inquiry issued to the company over the past two months. On Nov 22, FJ Benjamin opened at 7.8 Singapore cents, jumping 2.5 Singapore cents, or an eyebrow-raising 36.2 per cent, to close at 9.4 Singapore cents. The company had similarly responded that this might be due to the proposed rights cum warrants issue.

In October last year, F J Benjamin announced a proposed renounceable non-underwritten rights cum warrants issue to raise up to S$39 million in gross proceeds. About S$12 million will be raised through the issuance of 341 million new ordinary shares at an issue price of 3.5 Singapore cents apiece, based on three rights shares for every five existing shares.

In addition, about 682 million warrants will be offered at four Singapore cents per warrant, based on two warrants for every one rights share subscribed, which will raise about S$27 million. The warrants have a three-year exercise period.

Assuming that all the warrants are exercised, F J Benjamin will have about S$35 million in net proceeds, of which about 50 per cent will be used to support the expansion of the group's business activities, and the other half for "general corporate purposes".

For fiscal 2018's first quarter ended Sept 30, 2017, the company narrowed its net loss to S$942,000, from a net loss of S$3.6 million for the year-ago period. Revenue also fell 19 per cent to S$41.4 million for the first quarter as loss-making brands were discontinued.

The company has been on SGX's watch list since December 2016 for sustaining pre-tax losses for more than three consecutive financial years, and having a market cap of less than S$40 million.