Informatics Education proposes S$10.5 m rights issue

MAINBOARD-LISTED training provider Informatics Education plans to launch a rights issue, mainly to fund a business expansion, the board said on Thursday.

The renounceable non-underwritten rights issue of up to 216.6 million new shares, at S$0.05 apiece, is expected to yield as much as S$10.51 million, according to the board.

Informatics Education plans to use the net proceeds on an expansion that would include offering online courses, growing its worldwide licensing and partner network, and possibly developing an in-house scheme to let its British subsidiary award its own degrees.

Four-fifths of the net proceeds from the proposed rights issue will be set aside for the expansion, with the rest to go to general corporate and working capital.

The rights-cum-warrants issue must be approved by shareholders at an extraordinary general meeting.

As the issue will not be underwritten - a decision that the company made to save on underwriting fees, according to the board - Informatics Education wants to get irrevocable undertakings from some major shareholders to subscribe for rights shares if need be.

As such, the company also wants a whitewash waiver from the Securities Industry Council, relieving these undertaking shareholders of a potential obligation to make a mandatory offer for the shares. 

Independent shareholders may also have to waive their rights to a general offer from undertaking shareholders and concert parties, in a whitewash resolution at the extraordinary general meeting.

A circular with the meeting notice and the terms and conditions of the rights issue will be sent "in due course", followed by the offer information statement, said the board.

Malaysia-listed Berjaya Corp is Informatics Education's biggest shareholder, with a 28 per cent interest, while Kestrel Capital, an investment vehicle for Singapore billionaire Peter Lim, holds 20.73 per cent.

Informatics Education last closed at 4.3 Singapore cents on March 7.