Metal Component Engineering proposes S$800,000 share placement

METAL Component Engineering 5DX : 5DX 0% (MCE) has proposed to place 14.5 million ordinary shares at an issue price of 5.526 Singapore cents, to raise S$800,000, the Catalist-listed metal stamping company said on Tuesday in a bourse filing.

A bulk of the net proceeds of the share placement will be used to fund its acquisition of healthcare business Gainhealth, while the remaining will be used for general working capital requirements, the company said.

MCE had earlier announced that it would acquire the healthcare business as part of diversification efforts.

Last week, it said it had received in-principle approval from the Singapore Exchange (SGX) to issue up to 13 million shares and up to an additional 20 million shares at 3.7 cents per share as part of the performance bonus payable to Gainhealth's sellers.

The issue price of 5.526 cents represents a discount of around 10 per cent to the volume-weighted average price of 6.14 cents per share, based on the trades done on the SGX on Monday.

Assuming all the shares are fully placed out, it will represent 3.6 per cent of the existing share capital of 404.2 million shares, assuming no other new shares are issued by the company. It will also represent 3.5 per cent of the enlarged share capital of 418.7 million shares.

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Post the share placement, MCE expects its pro forma net tangible assets per share will increase to 4.05 cents from 4.02 cents.

MCE added that it would make an application to the SGX for the dealing in, listing of and quotation of the placement shares through its sponsor, Zico Capital.

Shares of MCE last closed flat at 6.1 cents on Monday.