Poor interest from minority investors has resulted in Chip Eng Seng insiders taking up the bulk of shares in its controversial rights issue.
The property group said on Monday night that controlling shareholders, chairman Celine Tang and her husband Gordon Tang, will subscribe for about 46.85 per cent of the shares being issued, as part of their sub-underwriting deal.
This will lift their holding in the mainboard-listed firm from 29.73 per cent to 36.35 per cent.
The one-for-four rights issue saw total valid acceptances and excess applications of about 53.15 per cent of all shares offered, Chip Eng Seng said.
This includes the irrevocable undertakings from the Tangs and chief executive Raymond Chia to subscribe for their shares, which account for 31.51 per cent of all shares offered.
The rights were offered at 63 cents a share, higher than Chip Eng Seng's market price of 62.5 cents on Monday.
Some shareholders felt the offer was not priced to attract full subscription, while the Tangs stood to receive a sub-underwriting fee of $1 million or 1.5 per cent of the gross proceeds from the underwritten rights shares.
The structure also allowed the Tangs to raise their stake in Chip Eng Seng beyond 30 per cent without triggering a mandatory general offer.
Chip Eng Seng said the bulk of the $96.3 million in net proceeds from the rights issue will be used for its property development business here and overseas.