Yongnam proposes placement of 104.5m new shares at 7.6 Singapore cents each

STEEL fabricator Yongnam Holdings has proposed to place up to 104.5 million new shares at an issue price of 7.6 Singapore cents per share to raise up to S$7.9 million, it said on Tuesday in an exchange filing.

The placement price represents a discount of around 9.9 per cent to the volume weighted average price for trades done on Monday - the full market day before the placement agreement was signed.

The placement shares represent around a fifth of the existing issued and paid-up shares of the mainboard-listed company. If the proposed placement - which is not underwritten - is fully subscribed, the placement shares will take up around 16.7 per cent of the enlarged share capital of the company.

After deducting fees and expenses, the estimated net proceeds from the proposed placement will be around S$7.5 million, which Yongnam is proposing to use for general working capital.

The company said its board is of the view that the proposed placement is "beneficial" to the company and its subsidiaries, as it will augment its working capital. This includes meeting the group's project expenses and other operating expenses.

"Further, the proposed placement is part of the group's on-going and prudent balance-sheet management to strengthen its financial position, enlarge its capital base and further enhance the financial flexibility of the group," it added.

After the proposed placement, net asset value per share will decrease to 23.35 Singapore cents, from 26.59 cents.

Yongnam shares closed at 8.3 Singapore cents on Monday, before a trading halt was called.