Cedar Strategic Holdings to raise up to $14.7m in rights issue

Cedar Strategic Holdings, an investment company with real estate businesses that is listed on the Singapore Exchange Catalist board, is planning a one-for-two rights issue.

It is proposing a renounceable non-underwritten issue of up to 3 billion new shares at 0.5 cents per rights share, it said in a statement on Monday. Shareholders will be entitled to one rights share for every two ordinary shares they currently hold in Cedar.

The rights issue price represents a 37.5 per cent discount to the last transacted price of 0.8 cents per Cedar share last Friday.

If the rights issue is fully subscribed, the net proceeds Cedar will receive is about $14.7 million, the company said. About $10.3 million of that will be used for real estate development or investment, with the remainder put towards working capital purposes.

Cedar also announced on Monday that it signed a framework agreement with China Gezhouba Group Company to appoint Gezhouba as Cedar's main contractor for all its China real estate and infrastructure construction projects over the next three years.

Gezhouba is the listed entity of Hubei, China-based China Gezhouba Group Corporation, which worked on the Three Gorges Dam Project on the Yangtze River.

Cedar had also previously unveiled plans in May to acquire Hua Cheng group, a property player in Guizhou, China.

"The rights issue will provide our shareholders with the opportunity to participate in the expected growth of the company, as we embark on the next phase of our development plans, giving teeth to the (acquisition of Hua Cheng) and the framework agreement with Gezhouba," said Dr Charlie In, Cedar Strategic's executive chairman.