Yinda Infocomm inks subscription agreement to issue new shares for S$5.8m

CATALIST-LISTED Yinda Infocomm has entered into subscription agreements with nine investors, for the allotment and issue of 81.2 million new ordinary shares for S$5.8 million or 7.2 Singapore cents per share, it said in an exchange filing on Sunday evening.

The announcement comes one month after the group issued 76 million new shares in another subscription exercise for S$3.8 million or five cents per share, which took its share capital from 152 million to 228 million shares.

"Notwithstanding that the company has yet to fully utilise the proceeds from the October issue, the proposed subscription is beneficial for the group as this will further strengthen its financial position and improve its cash flow to support the working capital requirements of the group, given its current loss-making position," Yinda said.

The communication solutions and services provider also said the proposed subscription will provide additional resources and funding for the group to pursue new business opportunities, such as the potential acquisition of a 51 per cent interest in International Biometrics - which was announced earlier this month - when terms have been finalised.

Around 20 to 30 per cent of the S$5.8 million in net proceeds after expenses will be used for working capital, while the other 70 to 80 per cent will be for new business opportunities, including the potential acquisition of International Biometrics.

The price of 7.2 Singapore cents for each new share represents a discount of around 9.6 per cent to the volume-weighted average price of 7.96 cents for trades done on Nov 11, the preceding full market day its shares were traded prior to the subscription agreement being signed.

GET BT IN YOUR INBOX DAILY

Start and end each day with the latest news stories and analyses delivered straight to your inbox.

Sign UpVIEW ALL

The 81.2 million new shares represent around 35.6 per cent of the company's existing issued and paid-up share capital of 228 million shares, excluding treasury shares and subsidiary holdings. After the proposed subscription, the new shares will represent around 26.3 per cent of the company's enlarged issued and paid-up share capital.

Of the nine subscribers, four are existing shareholders of Yinda, with shareholdings as at the announcement ranging from 0.07 per cent to 5.26 per cent.

Apart from one substantial shareholder, Chee Tai Chiew, who has an existing 5.26 per cent stake, none of Yinda's directors or other substantial shareholders are participating in the proposed subscription. Mr Chee's stake will be raised to 6.63 per cent post-subscription.

Yinda had called for a trading halt last Wednesday after the market closed, and requested on Sunday for the halt to be lifted.

Yinda shares were trading at 8.1 Singapore cents as at 11.45am on Monday, up 0.1 cent or 1.3 per cent.