Shipbuilder Nam Cheong announced yesterday that under the scheme of arrangement between the company and its creditors, it is launching a non-underwritten, one-for-one renounceable rights issue at 1.4 cents for each new share.
The issue price is a 30 per cent discount to the counter's last traded share price of 2 cents per share for trades done on July 20 last year, the last trading day immediately before the mainboard-listed firm filed a request for its shares to be suspended from trading.
Should the proposed rights issue be fully subscribed, up to some 2.1 billion rights shares will be issued, said the company in a midday lunch break exchange filing.
However, should major shareholder and executive chairman Tiong Su Kouk be the only subscriber of the rights shares and additional rights shares, then some 1.15 billion shares will be issued. Mr Tiong has a 51.26 per cent stake in the firm, both direct and deemed, and has given an irrevocable undertaking to subscribe for RM50 million (S$16.6 million) of shares.
The firm estimates net proceeds from the issuance to be between $16 million and $29 million, based on the exchange rate of S$1 to RM3.11 on Sept 20 last year.
Proceeds raised from Mr Tiong's subscription for his rights shares - as well as any additional rights shares in excess of his provisional allotment - will be used to fund a cash-out option, where the company's creditors will cash out part of their debt by accepting a haircut in exchange for cash.
Any remaining proceeds will go towards group operations, Nam Cheong said.
The firm said it had received in-principle approval from the Singapore Exchange on July 16 to list the additional shares.
Dr Lim Seck Yeow, non-executive chairman of Fabchem China, died last Saturday, the manufacturer of commercial explosive products said on Sunday.
The 80-year-old Dr Lim was appointed chairman in October 2004, and was also a member of the company's audit, nominating and remuneration committees.
The company said: "Dr Lim was an experienced and strong leader, and the company is deeply grateful to Dr Lim for his invaluable contribution to the company. His presence will be greatly missed by the board, management and employees of the company.
"The board and management would like to extend their deepest condolences to the family of the late Dr Lim and wish to express their sincere appreciation for Dr Lim's dedicated service over the years in guiding the company."