Blumont proposes 1-for-2 rights issue to raise $43m

Mainboard-listed Blumont Group is planning to raise $43.05 million in a one-for-two rights issue, where it will issue 861 million new shares at five cents each.

The investment holding company will allocate one rights share for every two ordinary shares held by shareholders, it said in a statement on Tuesday.

The issue price has been set at five cents for each rights share, a discount of about 96.23 per cent to the volume-weighted average price of $1.327 per Blumont share on July 26.

The renounceable non-underwritten rights issue will raise net proceeds of about $42.67 million after expenses, Blumont said.

It intends to use 80 per cent of the net proceeds to fund the company's business expansion through acquisitions, investments, joint ventures and other collaborations, and the rest for general working capital purposes.

Blumont shares rose eight cents to close at $1.415 on Monday but had lost three cents to $1.385 as at 2.20pm on Tuesday.