SGX rejects Hong Lai Huat's proposed warrants issuance

Paige Lim

Published Fri, Feb 11, 2022 · 08:37 AM

MAINBOARD-LISTED property developer Hong Lai Huat Group (HLH) CTO : CTO 0%said on Friday (Feb 11) that the Singapore Exchange (SGX) has rejected its proposed issuance of 80 million warrants to investment bank Soochow CSSD Capital Markets (Asia).

SGX had informed HLH that it had rejected its application due to "a lack of commercial rationale" for the proposed issuance for fund raising, taking into account the exercise prices' high premium over the current share price, the company's historical share price as well as the consideration of S$800 for the proposed issuance, among other things.

HLH first announced on Nov 26, 2021 that it had entered into a warrant issuance agreement with Soochow to issue 80 million non-listed, transferable warrants exercisable within 2 years from the date of issue.

Each warrant will carry the right to subscribe for 1 new ordinary share in the company at S$0.30 for the first 20 million warrants, S$0.35 a share for the next 20 million warrants, S$0.40 a share for the following 20 million warrants, and S$0.45 a share for the last 20 million.

If the warrants are exercised in full at the exercise prices, the estimated net proceeds from the proposed issuance will be around S$29.3 million and will be used for general working capital purposes, said HLH.

Shares of Hong Lai Huat closed flat at S$0.10 on Thursday.