Tee International to raise up to S$14m from 2 investors; announces debt restructuring
MAINBOARD-LISTED Tee International has inked a non-binding term sheet to issue 2 investors a total of S$7 million worth of subscription shares, the engineering services company announced on Friday (Jan 28).
As part of the deal, the investors will also be granted options to require Tee International to issue new shares worth up to S$7 million to themselves or their designated nominees.
Proceeds from the proposed subscription of new ordinary shares - after deduction of expenses - shall be used for the working capital purposes of the group and to fund the growth of its businesses.
The S$7 million proceeds from the issue of option shares will grant the group further access to funds for its future growth and expansion, Tee International said.
The 2 investors are Chong Sin Kiong and Tan Keng Soon, who are unrelated to each other.
Chong, who has agreed to invest and subscribe for S$6.02 million of the subscription shares, is the founder and managing director of Wah Loon Group. The company provides mechanical and electrical engineering services.
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Tan will subscribe to S$980,000 worth of the company's subscription shares. He is co-founder and managing partner of Dymon Asia Capital Singapore, an alternative investment manager.
On top of the proposed investment, Tee International and its wholly-owned subsidiary, PBT Engineering, are proposing to undertake a debt restructuring exercise for the settlement of their current unsecured financial liabilities via issue of new shares and/or payment in cash, the company said.
The exercise will be by way of a scheme of arrangement to be approved by the creditors of Tee International and PBT Engineering, and sanctioned by the order of the High Court of Singapore.
Tee International's shares have been suspended from trading since Jun 19, 2021. The company and its wholly-owned subsidiaries - with the exception of Trans Equatorial Engineering, which has been placed under creditors' voluntary liquidation - have been granted moratoria relief up to Mar 31, 2022.
This comes after a review of the group's businesses and operations by financial consultant RSM Corporate Advisory, following the incurrence of significant losses for its fourth quarter ended May 31, 2021.
The deal with the 2 investors is conditional upon the group's debt restructuring exercise being seen through, as well as its terms and conditions being satisfactory to both investors, among others.
According to Tee International, the proposed investment will allow for "certainty of funding" for the group's working capital requirements following its debt restructuring exercise, and is "vital for its continuity".
It will also allow the group to access funds to improve its cashflows and continue as a going concern, added the company.
Following the issue of subscription shares, Chong and Tan will hold about 43.1 per cent and 7 per cent of the enlarged share capital of Tee International respectively.
Assuming that they exercise the investor options granted to them within the first 12 months, this will result in Chong holding about 56.9 per cent of the enlarged share capital, and Tan holding 9.2 per cent.
READ MORE:
- Tee International to wind up Trans Equatorial Engineering on cash flow issues
- SGX committee raps Tee International and its former C-suite execs for breaching rules
- Tee International receives notice from DBS to take possession of 33 Changi North Crescent
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