Blumont proposes rights issue to raise $27.1 million

SINGAPORE - Mining company Blumont has proposed rights issue to issue 2.7 billion new shares at a price of one cent for each new share.

It's also launching a free detachable warrants issue, with each warrant carrying the right to subscribe for one new share at an exercise price of 1.2 cents.

Shareholders will be entitled to subscribe to a rights share with a free detachable warrant for every existing share held.

If all the rights shares are fully subscribed, the estimated net proceeds is $27.1 million.

Blumont said the move will strengthen its balance sheet by raising equity and will enable it to raise funds to make partial repayment to its creditor, Wintercrest Advisors.

It has a US$23.5 million loan facility with Wintercrest, of which it has drawn down US$21.5 million.

Blumont has an existing issued share capital of 2.7 billion shares.

It has also received in-principal approval for the listing of some 1.2 billion new shares to be issued for its takeover bid of Australian firm Genesis Resources.

Blumont, one of the stocks involved in the 2013 penny stock crash, closed unchanged at one cent.