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Manhattan Resources to raise S$13.73 m from one-to-one rights issue

MAINBOARD-LISTED Manhattan Resources is proposing a non-underwritten one-to-one renounceable rights issue at 2.45 Singapore cents per share to raise net proceeds of about S$13.73 million.

The proposed share price for the rights issue represents a discount of about 69.38 per cent to the closing price of eight Singapore cents per share for trades done on Aug 10.  

This proposed cash call will see the issuance of up to 568,765,975 rights shares to raise net proceeds of about S$13.73 million after deducting expenses.

Manhattan Resources said that the proceeds will go towards financing working capital requirements including expenses linked to its real estate project in Ningbo, China.

The firm, which provides support to oil and gas and coal mining industries, has an existing issued and paid-up share capital comprising 568,490,975 shares.  It has also 275,000 outstanding share options that can be exercised for 275,000 shares.

Excluding treasury shares, the rights issue will enlarge the firm’s issued and paid-up share capital to a maximum of 1,137,531,950 shares or a minimum of 1,136,981,950 shares.

Manhattan Resources’ major shareholder, Low Tuck Kwong, has given an irrevocable undertaking to fully subscribe and/or procure subscription of all of his entitlement, or 117,717,637 rights shares.  He has also agreed to fully subscribe and/or procure subscription for up to 451,048,338 rights shares, which are not subscribed for or otherwise taken up by other shareholders.

As a consequence of this irrevocable undertaking, Dr Low and his family may hold up to 68.59 per cent of the enlarged issued capital once the rights issue is completed. This would trigger a mandatory cash offer for the remaining shares that they do not hold in the firm.

Manhattan Resources has sought a waiver for Dr Low and his family from having to table the mandatory cash offer in the event that this is triggered by the proposed rights issue.

The firm’s equity raising exercise is subject to its shareholders’ approval.