Raffles Education Corp proposes 2-for-10 rights issue

RAFFLES Education Corporation is proposing a rights issue that will allow it to raise up to S$27.44 million in net proceeds.

It is planning to issue up to 275.86 million new ordinary shares at an issue price of S$0.10 for each rights share on the basis of two rights shares for every 10 existing shares. The issue price represents a discount of about 27 per cent over the last transacted price of Raffles Education's shares on Dec 6.

Part of the funds raised will go towards repaying debt, including loans owed to its chief executive officer Chew Hua Seng. Mr Chew had previously extended interest-free shareholder's loans to the company for working capital purposes, with the outstanding amount presently at around S$16.37 million.

Mr Chew - who has a 21.17 per cent stake in the company - and his spouse Doris Chung Gim Lian - who holds 2.47 per cent - will subscribe for their entitled allotments of the rights shares. In addition, they collectively hold shares representing a 9.93 per cent stake and will also subscribe for their joint allotments of the rights shares. These shall be offset against the loans extended and will reduce the amount owed to Mr Chew by up to S$9.25 million. 

Shares in Raffles Education closed unchanged at 13.7 Singapore cents on Thursday.