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Yongnam inks agreement for proposed placement of convertible bonds

YONGNAM Holdings has entered into a placement agreement with placement agent CGS-CIMB Securities (Singapore) to raise capital by placing out up to S$15 million worth of redeemable convertible bonds.

According to a filing to the Singapore Exchange (SGX) on Wednesday, the targeted group of investors comprises institutional investors, high net worth individuals, family offices, corporates and accredited investors.

The maturity date of the non-listed bonds is two years from the issue date, and the bonds will bear interest at a rate of 7 per cent per annum, payable every six months. The conversion price of S$0.179 represents a premium of approximately 6.55 per cent to the prevailing market price of the shares prior to the signing of the placement agreement.

The funds will be used for working capital purposes and to "boost the company's financial position. The board is of the view that this will support the future growth of the group", said Yongnam.

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The estimated net proceeds from the proposed placement is S$14.5 million after deducting fees and expenses.

The conversion of the bonds would result in the issue of a maximum of 83.79 million shares, representing approximately 13.8 per cent of the enlarged issued and paid-up share capital of the company. 

The bonds and the shares will be issued pursuant to the general mandate given by the shareholders of the company at the annual general meeting held on Apr 30 this year.

Yongnam said it will make the necessary announcements when the approval-in-principle for the listing and quotation of the shares has been obtained from SGX.