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Raffles United to undertake rights issue of up to 234m new shares at S$0.05 per share

BEARINGS and seals supplier Raffles United Holdings announced on Wednesday after trading hours that it is proposing to undertake a renounceable non-underwritten rights issue of up to 234 million new rights shares at an issue price of S$0.05 for each rights share, on the basis of one rights share for every one existing share.

The issue price represents a discount of approximately 39 per cent to the closing market price of S$0.082 for trades done on the Singapore Exchange on Jan 8, the last trading day before the announcement.

According to the company, the rights issue will enable the group to reduce its bank borrowings, finance the working capital requirements and strengthen the balance sheet.

Under the maximum subscription scenario, the net proceeds from the subscription of the rights shares is approximately S$11.6 million after deducting approximately S$0.1 million for estimated professional fees and related expenses.

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Raffles United said that it will make periodic announcements on the utilisation of the net proceeds as and when they are materially disbursed, and provide a status report on its use in the annual report of the company.

The company has been placed on the Singapore Exchange watch list with effect from Dec 5, 2018 under the minimum trading price criteria. Companies in the watch list have three years to resolve the issue, or may face delisting by the exchange.

In a separate announcement by the company, Teo Xian-Hui Amanda Marie, a deemed substantial shareholder of the company, has received official notification from the Commercial Affairs Department (CAD) on Jan 9 in relation to the release of her bond on Jan 3.

According to the group, its business and operations are not affected by the investigations and will “continue as normal”.

Since May 2018, the company’s top executives have been investigated by the CAD regarding potential breaches of the Securities and Futures Act.