SGX asks Vividthree to explain why company is raising more funds

CATALIST-LISTED visual effects studio Vividthree Holdings told the bourse on Thursday that it has had to turn to a new fundraising exercise for working capital, despite unused proceeds from its initial public offering (IPO) in 2018.

The Singapore Exchange (SGX) had raised a set of three queries over Vividthree's plan, which was announced on Wednesday, to place out up to 15.88 million new shares for at least S$0.126 apiece.

The board clarified in its reply that the number of shares and their price tag have yet to be fixed, with the final placement price to be determined by a book-building exercise. Shareholders will be informed of the number of shares and the placement price, it said.

Meanwhile, Vividthree had about S$1.15 million left in IPO proceeds as at Sept 30, 2019, the SGX pointed out in its queries.

"The group has not fully utilised its IPO proceeds, why is the company raising more funds for general usage now?" asked the bourse operator. "What specific plans does the company have?"

To that, Vividthree's board said that plans to raise a fresh S$1.88 million from the planned placement come with a earmarking of the bulk of the proceeds - some S$1.3 million - to develop new projects.

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"While the group has acquired the IP (intellectual property) rights, new VR (virtual reality) and immersive demonstration modules have to be built and to be showcased to prospective buyers such as theme parks owners (sic), leisure and entertainment companies," said the board.

The working capital portion of the planned placement proceeds will be split between its Doraemon Experience and Silent Horror projects, it added.

Vividthree shares closed flat at S$0.099 on Thursday.