Straits Trading launches private placement to raise S$80.9m, priced at S$3.11 per share

THE Straits Trading Company S20 on Tuesday (Jan 18) announced the launch of its private placement to raise gross proceeds of S$80.9 million.

The conglomerate-investment company will be issuing 26 million shares, priced at S$3.11 each, "to encourage both institutional and individual share ownership", it said.

Net proceeds from the share placement will be used to fund acquisitions and future anticipated growth for the group's businesses in real estate, resources and hospitality, as well as for general working capital and administrative purposes, Straits Trading said.

The placement price represents a discount of 8.9 per cent to the counter's volume-weighted average price of S$3.4126 for all trades done on Jan 13.

Noting that the company's shares had low trading liquidity, the company expects the private placement can increase resources and working capital, to pursue business opportunities and improve its cash flow.

The placement will increase the free float of Straits Trading to 29.8 per cent from 25.3 per cent. The placement shares represent around 6.4 per cent of the total issued shares of the company.

Eric Teng, chief executive of Straits Developments, said: "Our strategy was not only to optimise the number of shares in the market, but to enhance the free float and trading liquidity of Straits Trading with a possible increase in total market capitalisation."

The offer of the placement shares will be made to eligible institutional, accredited and other investors.

CLSA Singapore, DBS, UOB, Philip Securities, Maybank Securities and RHB are the joint placement agents for the share placement.

Shares of Straits Trading closed at S$3.22 on Tuesday, down by S$0.18 or 5.3 per cent.

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