New Silkroutes proposes share placement to raise S$5m

SINGAPORE - New Silkroutes Group (NSG) on Thursday announced a proposed share placement to raise proceeds of almost S$5 million.

The company, which has businesses in oil and gas trading, healthcare, financials and real estate, will issue some 11,363,636 new ordinary shares at S$0.44 apiece. This price represents a 57 per cent premium to NSG's last traded price of S$0.28 apiece on Nov 28.

In late November last year, NSG had requested a trading halt, pending the release of an announcement. It later called for a trading suspension on Dec 5, and extended this suspension on Dec 27.

In its filing with the Singapore Exchange (SGX) on Thursday (Feb 22), NSG said that it had on Feb 21, entered into a subscription agreement with an investor, Andrew Chua Soon Kian.

Dr Chua was introduced to the firm through mutual business associates and will take up the new shares for investment purposes, NSG said. He is the chairman to the management council of East Asia Institute of Management, and has experience in IT and management consultancy.

Upon completion of the placement, the group will have about 167 million ordinary shares, with the new shares representing about 6.8 per cent of the firm's enlarged share capital.

For the financial year ended June 30, the group's net asset value per share 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.

According to NSG's latest financial results, net asset value per share as at Dec 31 was 27.03 US cents. For the half year ended Dec 31, the group also narrowed its loss per share slightly to 0.31 US cent, from a loss per share of 0.37 US cent in the year-ago period.

The proposed share placement is conditional upon in-principle approval being granted by the SGX-ST for the listing and quotation of the new shares, as well as board approval, among other things.

Completion of the placement shall take place no later then seven business days after the fulfullment of conditions set out in the subscription agreement, NSG said.

The group added that 35 per cent of the proceeds from the placement will be used for general working capital purposes. The rest will be used to expand the group's business through investments, acquisitions, joint ventures or strategic alliances.