Pawnbroker Maxi-Cash plans S$5.18 million fund-raising exercise for working capital

CATALIST-LISTED pawnbroker Maxi-Cash Financial Services Corp 5UF : 5UF 0% will place up to 32 million ordinary shares for more than S$5.18 million altogether, the board said on Monday (Dec 6).

The issue price of S$0.162 apiece marks a roughly 7.9 per cent to the volume-weighted average price for trades done on the last full market day before a halt was called last week.

The placement exercise's estimated net proceeds of about S$5.06 million would be used for working capital purposes "to fund the expansion of its secured lending business and pawnshop network in the region", said the Maxi-Cash board in its bourse filing.

It added that the net proceeds would also offer a buffer for future working capital needs, and the planned placement would broaden the shareholder base and improve trading liquidity too.

The placement shares will represent about 3 per cent of the company's enlarged share capital.

On a pro forma basis, net total assets would have dipped from 14.65 Singapore cents a share to 14.21 cents if the placement had been done on Dec 31, 2020, while earnings per share would have slid from 2.83 cents to 2.74 cents if it went through on Jan 1, 2020, the board disclosed.

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SAC Capital is the agent for the placement, which is not underwritten and will feature an exempt offering involving institutional investors, accredited investors and certain other persons.

The placement shares will not be placed to any director or substantial shareholder of Maxi-Cash as of Monday, and will not result in any transfer of controlling interest, said the board.

Maxi-Cash called a trading halt on Dec 3 and moved to lift it on Monday night, after the news.