Pacific Andes Resources Development (PARD), a global frozen fish supplier, announced on Tuesday that it proposes to undertake a fully underwritten rights issue of 3.83 billion new ordinary shares at an issue price of S$0.051 for each rights share.
The offer will be on the basis of 4 rights shares for every 5 existing ordinary shares in the capital of the mainboard-listed company.
The subscription price of S$0.051 per rights share represents a discount of about 52.8 per cent on the stock's closing price in Singapore of S$0.108 on Monday, the last trading day immediately before the announcement.
Net proceeds of the proposed rights issue, after deducting estimated expenses of approximately $3.2 million, is expected to be approximately $192.3 million.
PARD said it intends to utilise the net proceeds of the rights issue for general working capital purposes and/or reduction of the company's and/or the group's borrowings (including, mainly to support and/or assist China Fishery Group Limited in the redemption of the Copeinca Notes and to repay the existing loan facilities) which may be effected through inter-company loans and/or by way of possible capital injection in one or more subsidiaries within the group.
Said PARD chairman Mr Ng Joo Siang: "Since the beginning of the year we have been consistently focusing on consolidation of our operations and enhancing the Group's capital structure. We are on track in delivering on these priorities, with the recent announcement of a solid increase in PARD's net profit, the realisation of gain from the sale of non-core assets, such as the sale of Tassal Group Limited shares, and now the injection of equity funding from this proposed rights issue. This funding will strengthen the Group's equity capital base while not increasing borrowings or interest expense."
PARD has appointed DBS Bank, Maybank Kim Eng Securities Pte. Ltd. and Standard Chartered Securities (Singapore) Pte. Ltd. as joint lead managers and joint underwriters of the rights issue. The maximum number of underwritten rights shares is about 1.29 billion.