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Kitchen Culture to raise S$3.9m from proposed placement at S$0.068 per share

CATALIST-LISTED Kitchen Culture Holdings has entered into a placement agreement with UOB Kay Hian to raise capital by placing out up to S$3.9 million worth of new shares.

The 57 million shares are priced at S$0.068 per piece. The issue price represents a discount of about 9.3 per cent to the volume-weighted average price of S$0.075 per share based on trades done on March 4, which is the last full market day prior to the signing of the placement agreement.

The funds will be used to "strengthen its financial position, improve the group's cash flow and increase resources and working capital available to the group to pursue new business opportunities," said Kitchen Culture in a regulatory filing to the Singapore Exchange (SGX) on Friday.

Assuming the proposed placement is fully subscribed, the estimated net proceeds from the proposed placement is S$3.9 million after deducting fees and expenses.

The company aims to allocate S$1.9 million to the repayment of its debt, S$1 million to pursue new business opportunities and about S$0.9 million for its general working capital.

Based on unaudited half-yearly financial results for the period ended Dec 31, 2019, Kitchen Culture is in a net current liabilities position of S$5.6 million and a net liabilities position of S$6.8 million. 

The placement shares represent about 47.3 per cent of the existing share capital, and will represent about 32.1 per cent of the enlarged share capital. To date, the issued and paid-up capital of the company comprises 120.5 million shares.

Kitchen Culture called for a trading halt on March 4 after market close. Its shares last traded at S$0.075.