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Samko proposes rights issue to raise net proceeds of S$34.6m

SAMKO Timber has proposed a renounceable non-underwritten rights issue of up to one billion new shares at 3.5 cents each on the basis of five rights shares for every seven existing shares.

This is expected to raise net proceeds of about S$34.6 million, after deducting professional fees and related expenses incurred for the rights issue, the group said on Friday.

Explaining the rationale for the rights issue, Samko said this is to improve its working capital position, and strengthen its financial position and capital base.

The group also plans to start an "organisational rationalisation process to further improve its staffing and costs efficiencies".

The rights issue price is a discount of about 61 per cent to the closing market price of nine cents per share on Friday, and a discount of about 48 per cent to the theoretical ex-rights price of 6.7 cents per share.

Samko will be seeking specific approval from shareholders at an extraordinary general meeting for the rights issue and the proposed disposal of shares in PT SLJ Global Tbk that was announced last month.