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Innopac plans S$5m placement that could double share capital

INNOPAC Holdings plans to raise up to S$5 million through a stock placement that could more than double its issued share capital, the investment holding company announced on Sunday.

The company will offer the shares at a minimum average price of 0.1 Singapore cent apiece, matching the stock's last traded price on April 27. KGI Securities is the placement agent for the deal.

The placement shares represent about 112.1 per cent of Innopac's existing issued share capital. If fully placed, the shares will form about 52.85 per cent of the comapny's enlarged share capital.

Innopac will use the proceeds to support new business investments and acquisitions and for general working capital purposes.

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The company separately announced that it had appointed Kennedys Legal Solutions partner Chong Eng Wee as an independent non-executive director. Mr Chong will be a member of the board's audit committee.

Innopac, which is on the Singapore Exchange's (SGX) watch list for possible delisting because it has posted three straight years of losses and has not been able to maintain a minimum trading price of 20 Singapore cents, is facing questions about its ability to remain a going concern and the nature of its core business.

On April 13, the SGX ordered the company to undertake and complete an interim audit by May 31 to clarify whether it is able to operate as a going concern and whether it has any active business operations. Without active business operations, the company will be designated as a cash company.

The SGX further ordered the company to appoint a professional firm acceptable to the Exchange by May 12 to conduct a review of the company's investment processes and to recommend improvements in controls, if any.