Vashion announces debt conversion, share consolidation, rights issue and business diversification plan

MEN'S apparel retailer Vashion Group on Thursday announced a slew of proposed transactions, including conversion of debt owed to independent directors into equity, a share consolidation, a rights issue to raise an estimated net proceeds of S$5.3 million and a business diversification proposal.

First, it had entered into a debt conversion agreement with two directors, Chan Siew Wei and Tan Chin Lee, for the conversion of director fees owed to them into new shares at a fixed price of 0.3 Singapore cent per debt conversion share, a premium of about 50 per cent to the volume-weighted average price for trades on Wednesday.

Secondly, Vashion proposed to undertake a 10-to-one share consolidation, to be carried out after completion of the proposed debt conversion.

Thirdly, the company proposed a renounceable non-underwritten rights-cum-warrants issue of up to 1.13 billion new shares at an issue price of 0.5 Singapore cent for each rights share, with up to 565.15 million free detachable warrants. Each warrant carries the right to subscribe for one new share at an exercise price of 0.5 Singapore cent, on the basis of 10 rights shares for every one consolidated share held by the shareholders of the group.

The rights issue is subject to shareholders' and other regulatory approvals.

Lastly, Vashion proposed a diversification of its business to include financing and luxury goods. It said it is looking to provide personal and business loans in Hong Kong and start the retail and trading of new and used luxury consumer goods.

As this proposed diversification will involve new businesses that may change the existing risk profile of the group, shareholders' approval is required under Catalist listing rules. The group will convene an extraordinary general meeting to seek their approval on this.