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NauticAWT's placement agreements lapse, firm strikes new deal

OIL and gas engineering group NauticAWT said on Wednesday that placement agreements, which were supposed to help it raise S$12 million, have lapsed.

However, the company, which has in months faced questions over its status as a going concern, also said in another exchange filing that it has struck a separate share subscription agreement worth S$4.5 million with a private investor.

In January, NauticAWT entered into placement agreements with agents Zhongtai International Securities (Singapore) and Soochow CSSD Capital Markets (Asia) to secure subscribers for over 705 million shares at S$0.017 per share, by way of a private placement that would have amounted to S$12 million. 

But on Wednesday, NauticAWT said that the agreements have lapsed as "the company and the placement agents have mutually agreed not to proceed with the proposed placement after further discussions".

Instead, the company said that it has entered into a conditional share subscription agreement with Dr Chirasak Chiyachantana to issue 400 million new ordinary shares at S$0.01125 per share, amounting to S$4.5 million. 

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The subscription, if approved by shareholders, will see the private investor become a controlling shareholder with a 50.4 per cent stake in the company's enlarged share capital. 

NauticAWT said the net proceeds would be mainly used for working capital funding and investment via business diversification and acquisitions. The rest would go towards repaying balance liabilities.

In April, the firm's independent auditor Deloitte & Touche flagged a material uncertainty related to the going concern of the group, as its current liabilities exceeded its current assets by US$4.6 million even as the group recorded a loss of about US$5 million for the financial year ended Dec 31, 2018.

Deloitte & Touche had written: "The going concern assumption of the group is dependent on the group being able to secure additional funding through a placement exercise for new shares of the company, obtain continued support from its existing banks, and secure new contracts from customers. The above conditions indicate the existence of a material uncertainty which may cast significant doubt on the group's and the company's ability to continue as a going concern. Our opinion is not modified in respect of this matter."

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