8Telecom to place 22.5m new shares at 10.3 cents each to raise $2.3m

SINGAPORE - Mainboard-listed 8Telecom International Holdings has entered into two subscription agreements to issue 22.48 million new shares at 10.3 cents apiece to raise about $2.3 million.

This subscription price represents a 2.5 per cent discount to the counter's volume-weighted average price of 10.56 cents per share on Monday (June 25).

Following the completion of the placement, the subscription shares will collectively represent about 16.66 per cent of the firm's enlarged share capital. The company added that it has about 2.04 million treasury shares, and does not have any existing warrants or other convertibles as at June 25.

The two subscribers are Top Capital Securities, an investment holding company; and Tai Yang Technology, a firm engaged in the development of e-commerce applications. Both companies are incorporated in Singapore, and were introduced to the company by business associates of Wang Zhejun, 8Telecom's executive director, who has been seeking investments for the firm.

Top Capital Securities will subscribe for 16.88 million shares, or 12.51 per cent of the firm's enlarged share capital, while Tai Yang Technology will take on 5.6 million shares, representing 4.15 per cent of the firm's enlarged share capital.

Net proceeds from the proposed subscription are expected to be about $2.3 million. Half of this amount will go towards the proposed acquisition of two targets engaged in the supermarket business, China Commodity Market and China Commodity Shopping Centre, as well as other investment opportunities. The remainder will be used for operating expenses and professional fees, 8Telecom said.

The placement is subject to in-principle approval from the Singapore Exchange Securities Trading (SGX-ST), and the allotment of shares to the subscribers not being prohibited by any legislative body or authority of Singapore.

Shareholders' approval for the placement will also be sought at a special general meeting to be convened, the company said.

The counter last traded at 11.3 cents apiece on Monday, up 0.9 per cent, or 0.1 cent.