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iX Biopharma sees share price slip after proposing S$10.2m placement at discount
PHARMACEUTICAL company iX Biopharma has proposed a private placement of about 44.5 million new ordinary shares at 23 Singapore cents apiece to raise a total of S$10.2 million.
The Catalist-listed firm on Tuesday entered into a conditional subscription agreement with 24 subscribers.
The three largest subscriptions will come from private investors Tan Sar Tee, who will pay S$1.5 million for shares amounting to a 0.94 per cent interest immediately after the placement; Ivie Peh Sher Ngim, who will gain a 0.69 per cent stake for S$1.1 million; and Lee Loi Sing, who will get a 0.63 per cent stake for S$1 million.
The total subscription shares represent about 6.86 per cent of the existing share capital of iX Biopharma, and 6.42 per cent of the share capital immediately after the placement is completed.
The subscription price of 23 cents represents a 27.7 per cent discount to the volume weighted average price of 31.8 cents per share for trades done on the Singapore Exchange (SGX) on Monday.
iX Biopharma's directors believe that the proposed placement will support the group's future growth.
"As the group transitions from being focused on research and development to commercialisation, the company intends to strengthen its balance sheet to allow it to commercialise a number of products across different markets," it said.
About 60 per cent of the S$10.18 million in net cash proceeds will finance development, manufacturing and marketing activities required for the group's pharmaceutical and nutraceutical products in the pipeline.
The remaining 40 per cent will be used for general working capital.
iX Biopharma said that its management had commenced fundraising activities in early June, after Covid-19 restrictions were eased.
Meetings with the 24 subscribers then had generated "significant interest" and agreements to participate, at a price not more than a 10 per cent discount to the weighted average price for trades done on the SGX for the full market day on which the subscription agreement was to be signed. During this period, the daily closing share price ranged from 24.5 cents to 26 cents.
However, as negotiations advanced, there was "a sudden surge in interest" for pharmaceutical or healthcare companies, iX Biopharma noted. Its share price rose by 27 per cent to 31 cents, but the subscribers were unwilling to participate at the elevated share price.
The directors are thus of the view that, having regard to the historical trading price, the proposed subscription price of 23 cents is reasonable.
The stock's historical average monthly share price was 16 cents in March, 18 cents in April, and 26 cents in May this year.
iX Biopharma will seek specific shareholders' approval for the proposed placement, at an extraordinary general meeting to be convened.
The company called for a trading halt on Tuesday before the market opened, and then lifted the halt on Wednesday shortly after midnight.
The counter tumbled two cents or 6.5 per cent to trade at 29 cents as at 10.03am on Wednesday. It was one of the most heavily traded stocks by volume on the Singapore bourse, with about 10.7 million shares changing hands.