SINGAPORE - Innopac Holdings on Tuesday (Oct 9) announced an $8.4 million stock placement that will result in a change of control, as well as a related disposal of five subsidiaries and a $2.5 million secured loan facility.
Innopac, an investment holding company, said that it will place 8.4 billion new shares at 0.1 Singapore cent apiece to 11 individual investors. The new shares will represent about 65 per cent of Innopac's enlarged share capital.
The largest investors in the placement are Choo Beng Kai, managing director of Malaysian investment holding company Masmeyer Holdings, and Lim Soon Huat, executive chairman of Malaysia-listed Asia File Corp. Mr Choo will hold a 19.4 per cent stake in Innopac after the placement, and Mr Lim will control a 15.6 per cent interes, and will together be considered the new controlling shareholders of the company.
Of the $7.95 milion in net proceeds, Innopac will use about $3.95 million to develop existing investments, new business investments and acquisitions; $1.5 million for general working capital purposes; and $2.5 million for the repayment of outstanding loans.
Innopac has agreed to an 18 per cent loan facility for up to $2.5 million from a vehicle controlled by Mr Choo. The loan, which is secured by all of Innopac's fixed assets, shares in certain subsidiaries and certain Malaysian properties, will be due six months from each drawdown. Innopac said that proceeds from the loan will be used for working capital, to pay creditors and for a "corporate exercise".
Innopac also agreed to sell its entire shareholding interest in five subsidiaries to current chairman and chief executive Wong Chin Yong for $100,000. Those subsidiaries are investment holding and trading units Heritage Investment Corp and Wang Da Investment; Kyrgyz Republic gold exploration unit Golden Eagle Mining; dormant unit Malaysian Microalgae Enterprise; and Extera, an investment vehicle whose key natural gas stations business is no longer operating. Mr Wong will resign from Innopac following the disposal.
Those businesses had a negative book value of about $8.3 million as at June 30, 2018.
In a filing with the Singapore Exchange (SGX), Innopac said: "The proposed disposal of these non-core assets will allow the group to further prioritise its financial resources as well as streamlining its business focus of investment holdings in real estate for the overall betterment of the group."
The placement, disposal of subsidiaries and change of control will require shareholderes' approval at an extraordinary general meeting that has yet to be convened.
Innopac shares have been suspended on the SGX since June 7.