Lum Chang Creations to raise up to S$26.6 million via proposed share placement

[SINGAPORE] Lum Chang Creations is planning to launch a placement of up to 35 million shares at S$0.759 each to raise gross proceeds of up to about S$26.6 million, the company announced on Thursday (Jun 18).

The proposed exercise comprises up to 15 million new shares and up to 20 million existing vendor shares.

The move is aimed at increasing the company’s public float as it prepares to transfer its listing from the Catalist board to the mainboard of the Singapore Exchange (SGX).

Under SGX rules, mainboard-listed issuers must ensure that at least 25 per cent of their total issued shares are held by the public (if market capitalisation is below S$300 million), alongside a minimum of 500 shareholders.

The placement price of S$0.759 a share represents a discount of about 9.9 per cent to the volume-weighted average price of S$0.8426 for trades done on Wednesday, the last full market day prior to the execution of the placement agreement and a subsequent trading halt.

The new shares will bring in around S$11.4 million in gross proceeds for the company.

Meanwhile, the remaining 20 million vendor shares are being offered by Lum Chang Holdings and Lim Thiam Hooi, the managing director of Lum Chang Creations. They are looking to raise up to S$9.3 million and S$5.8 million, respectively.

DBS, CGS International Securities Singapore and RHB Bank have been appointed as the joint placement agents.

The company expects net proceeds from the new shares to amount to S$10.8 million, after deducting about S$600,000 in estimated expenses.

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Of this amount, S$6 million (55.6 per cent) will be set aside to explore acquisitions, investment opportunities, strategic alliances and joint ventures.

Some S$1.5 million each will go towards regional expansion and growing its portfolio in interior fit-out, additions and alterations projects in the high-end residential sector.

The remaining S$1.8 million will be deployed for general corporate working capital.

On a pro forma basis, assuming the 15 million new shares are fully placed out, Lum Chang Creations’ net tangible assets per share for the financial year ended Jun 30, 2025, would increase to S$0.1088 from S$0.076.

Conversely, earnings per share for the same period would be diluted to S$0.0438 from S$0.0461.

Completion of the placement is expected to take place on Jun 29, subject to customary closing conditions.

Shares of Lum Chang Creations ended flat at S$0.83 on Wednesday. A trading halt the company requested on Thursday will be lifted on Friday morning.