CAPITAL World is raising up to S$16.45 million from Malaysia-listed manufacturing and property group PRG Holdings through the issuance of new shares and options at S$0.035 apiece.
Under the term sheet, PRG will subscribe for 265 million new shares of Capital World for S$9.28 million and have the option to subscribe for a up to 205 million more new shares for a further S$7.18 million. The options may be exercised within three months of the placement.
Assuming all the options are exercised, PRG will hold a 26.3 per cent stake in Capital World, a property developer, through the deal.
The issue price of S$0.035 represents a 34 per cent discount to the volume-weighted average price of S$0.053 based on the trades done on shares in Capital World on Dec 5, the date on which the term sheet was signed.
Capital World said it will use the funds raised for the Capital City project and working capital, including repayment of existing loans and borrowings.
PRG is an investment holding company listed on Bursa Malaysia. It, together with its subsidiaries, are principally engaged in the manufacturing and sale of webbings, yarn, furniture components, rubber strips and fabrics, healthcare, as well as property development and construction. PRG is "participating in the proposed subscription for its own investment purposes", said Capital World.
Capital World has also agreed to pay a referral fee amounting to 5 per cent of the total gross proceeds to be raised from the proposed subscription to One World Corporation, a company incorporated in Hong Kong and in the business of providing marketing consultancy services. Its sole shareholder is Liu Xing Ping.
In addition, as referrer for the deal, One World will be granted options to subscribe for 50 million new shares at the exercise price of S$0.035 per share within two years from the date of completion of the proposed subscription. This represents 2.78 per cent of the enlarged share capital of Capital World. Assuming the referrer shares are exercised, the gross proceeds of S$1.75 million will be utilised for working capital purposes.