SINGAPORE - China Star Food Group is proposing a private share placement of 40 million shares at S$0.09 to raise about S$3.6 million.
The subscription price of S$0.09 represents a premium of 4.33 per cent to the volume-weighted average price of S$0.0861 per share, based on trades done on the Singapore Exchange on March 9, the day the subscription agreements were signed.
On March 9, it entered into five separate subscription agreements with Liu Nai Lin, Pan Ruliang, Jiang Benwei, Luo Fangfen and investment holding company PTS Capital for individual subscription share amounts ranging from one million to 20 million shares.
The 40 million subscription shares represent 15.57 per cent of the existing share capital of the company and around 13.47 per cent of the enlarged share capital.
Mr Liu, Mr Jiang, Mr Luo and PTS Capital are all existing shareholders of the company, said China Star Food Group in a filing with the Singapore Exchange on Monday. Each of the subscribers is a private investor who was introduced to the company by its chief executive Liang Chengwang, and is subscribing for his own investment purposes.
China Star Food Group owes Mr Luo S$632,097, of which S$630,000 will be capitalised through the share placement; therefore, Mr Luo will receive seven million new shares. All other subscribers would be paying for their respective subscription shares through cash.
After subtracting for the capitalisation of the sum owed to Mr Luo, repayment of S$363,000 to the CEO Mr Liang for a loan, as well as expenses linked to the placement, the net proceeds total S$2.58 million.
The company said that it plans to use the net proceeds for working capital requirements for its Singapore corporate office, corporate advisory fees, legal and independent accountant fees, payment of operating expenses, and other fees.