SINGAPORE - Water treatment specialist Darco Water Technologies is raising S$900,000 through a placement of 1.5 million shares at S$0.60 each to controlling shareholder Robert Stone.
The placement price represents a premium of about 3.4 per cent to the volume weighted average price of S$0.58 per share as at Nov 14, the last full market day before the agreement.
Following the placement, Mr Stone will raise his stake in the company to 18.13 per cent from the current 15.99 per cent.
Darco will use the proceeds to invest in public-private partnership water infrastructure projects.
Net proceeds after deducting placement-related expenses will be S$882,000, and about 70 per cent of that will be used for funding of new projects or investments where opportunities arise, with the remaining going towards the firm's working capital.
This proposed placement represents approximately 2.62 per cent of the company's existing issue share capital and 2.55 per cent of the firm's enlarged share capital.
Assuming that the proposed placement was completed on Jan 1, 2016, earnings per share for the year ended December 2016 would have fallen from 5.49 Singapore cents before the placement to 5.32 Singapore cents.
Darco said that Mr Stone's subscription of these new shares is for investment purposes only and that he has "no intention of influencing the management of or exercising control over the company".