Nam Cheong launches 1-for-1 renounceable rights issue to raise up to S$29m
SHIPBUILDER Nam Cheong announced on Monday that under the scheme of arrangement between the company and its creditors, it is launching a non-underwritten, one-for-one renounceable rights issue at a price of S$0.014 for each new share.
The issue price is a 30 per cent discount to the counter's last traded share price of S$0.02 per share for trades done on July 20, 2017, the last trading day immediately before the mainboard-listed company filed a request for its shares to be suspended from trading.
Should the proposed rights issue be fully subscribed, up to some 2.1 billion rights shares will be issued, said the company in a midday lunch break exchange filing.
However, should major shareholder and executive chairman Tan Sri Datuk Tiong Su Kouk be the only subscriber of the rights shares and additional rights shares, then some 1.15 billion shares will be issued. Mr Tiong currently has a 51.26 per cent stake in the company, both direct and deemed, and has provided an irrevocable undertaking to subscribe for RM50 million of shares.
The firm estimates net proceeds from the issuance to be between S$16 million to S$29 million, based on the exchange rate of S$1 to RM3.11 on Sept 20, 2017.
Proceeds raised from Mr Tiong's subscription for his rights shares - as well as any additional rights shares in excess of his provisional allotment - will be used to fund a cash out option, where the company's creditors will cash out part of their debt by accepting a haircut in exchange for cash.
Any remaining proceeds will go towards group operations, Nam Cheong said.
The firm said it had received in-principle approval from the Singapore Exchange on July 16, 2018, to list the additional shares.
KEYWORDS IN THIS ARTICLE
BT is now on Telegram!
For daily updates on weekdays and specially selected content for the weekend. Subscribe to t.me/BizTimes
Companies & Markets
Far East Orchard acquires 49% stake in UK-based purpose-built student accommodation operator for £17.6 million
Nestle sales growth sputters on US slump, vitamin snags
BNP Paribas beats estimates as lower costs offset trading slump
TikTok ultimatum puts US firms in firing line for China response
Toyota and Nissan pair up with Tencent and Baidu for China AI arms race
BHP targets Anglo American in bid valuing miner at US$39 billion