JMO to pump millions in Pine Capital for major equity stake

PINE Capital Group is seeking to raise gross proceeds in excess of S$2.15 million from placement of shares representing 13.67 per cent of its existing issued equity or 12.03 per cent of its enlarged shareholding to private-owned management consultancy firm, JMO Pte Ltd.

On Tuesday, Pine Capital entered into a conditional subscription agreement with JMO for the placement of 799 million shares at the issue price of 0.27 Singapore cent per share to the latter.  

The placement shares are priced at a 170 per cent premium to the volume weighted average price for trades done on Pine Capital's shares on Nov 26, up to the time that the subscription agreement was signed.

JMO has also agreed at the same time, to extend a loan of S$2.7 million to Pine Capital.  This loan shall be convertible into one billion new shares at the issue price of 0.27 Singapore cent per share.

Pine Capital intends to use the net proceeds of S$1.92 million from the share placement and another S$2.4 million from the convertible loan to fund general working capital, general corporate purposes and pursuit of business opportunities.

The net proceeds are derived after deducting fees including those to the paid to Empire Elites Venture, a British Virgin Islands-incorporated entity that introduced Pine Capital to JMO. Pine Capital has agreed to pay in cash an introducer fee of S$239,700 to Empire Elites on completion of the share placement. It would also pay an introducer fee of S$0.0003 for each share allotted and issued for conversion of the loan from JMO. This works out to S$300,000 in cash payment to Empire Elites assuming the full conversion of JMO's loan into Pine Capital shares.

The sole director and shareholder of Empire Elites is Wai Yee Tai.

Pine Capital said that its board of directors have been granted a mandate at its 2018 annual general meeting to issue the placement shares to JMO. But it intends to convene an extraordinary general meeting to seek shareholders' approval towards the issuance of shares in the event that the JMO loan is converted to equity.

Pine Capital has requested to lift a trading halt that was in force ahead of its announcement after Tuesday's trading hours on the agreement with JMO.