Koh Brothers Eco Engineering proposes rights cum warrants issue

KOH Brothers Eco Engineering Limited said on Friday that it is proposing a renounceable non-underwritten rights cum warrants issue of up to 523.32 million new shares at an issue price of 4.5 Singapore cents apiece. 

The issue will be on the basis of one rights share for every two shares. The rights shares come with up to 523.32 million free detachable warrants, with each warrant carrying the right to subscribe for one new share at an exercise price of five cents each. 

The rights issue price represents a discount of 34.8 per cent to the last transacted price of 6.9 Singapore cents per share on the Catalist board of the SGX on June 28.

"The company believes that the proposed rights cum warrants issue will enhance the group's financial position and provide the group with greater financial capacity to pursue business opportunities and sustain growth for the long term," Koh Brothers Eco Engineering said on Friday.

"The company intends to utilise the proceeds of the proposed rights cum warrants issue towards funding the group's business expansion plan and for working capital requirements," it added. 

"In addition, the proposed rights cum warrants issue will also provide existing shareholders who are confident of the future prospects of the company with an opportunity to subscribe for additional shares."

The group could raise S$15.21-32.11 million under a minimum subscription scenario and at least S$23.55- 49.72 million under a maximum subscription scenario.

Koh Brothers Eco Engineering said it plans to use some 70 per cent of the proceeds for general working capital such as funding new projects, capital improvements, the repayment of loans and operating costs. About 30 per cent will be used for business expansion, including financing new business ventures through joint ventures, partnership, acquisitions and strategic investments.