New Silkroutes Group announced a proposed share placement yesterday to raise proceeds of almost $5 million.
The company, which has businesses in oil and gas trading, healthcare, financials and real estate, will issue 11,363,636 new ordinary shares at 44 cents apiece. This price represents a 57 per cent premium to New Silkroutes' last traded price of 28 cents on Nov 28.
The firm said 35 per cent of the proceeds will be used for general working capital purposes. The rest will be used to expand the business through investments, acquisitions, joint ventures or strategic alliances.
Last November, the firm requested a trading halt pending an announcement.
It later called for a trading suspension on Dec 5 and extended it on Dec 27.
New Silkroutes told the Singapore Exchange yesterday that it entered into a subscription agreement with an investor, Dr Andrew Chua Soon Kian, on Wednesday.
Dr Chua will take up the new shares for investment purposes, New Silkroutes said. He is the chairman to the management council of East Asia Institute of Management, and has experience in IT and management consultancy.
Once the placement has been completed, New Silkroutes will have about 167 million ordinary shares, with the new stock representing about 6.8 per cent of its enlarged share capital.
The firm's net asset value per share for the financial year ended June 30 will be increased to 27.56 US cents after the placement from 27.08 US cents before the placement.
Similarly, loss per share will be reduced to 1.27 US cents after the share placement, from 1.38 US cents before.
Net asset value per share as at Dec 31 was 27.03 US cents.
The company also narrowed its loss per share slightly to 0.31 US cent for the six months to Dec 31 from a loss per share of 0.37 US cent a year earlier.
The proposed share placement is conditional upon SGX and board approval, among other things.