SINGAPORE - Sino Grandness Food Industry Group has entered into a placement agreement with JW Capital Group to raise net proceeds of around $6.8 million to repay outstanding sums to Soleado Holdings and strengthen its financial and working capital.

It plans to issue 170 million new shares at the issue price of $0.04 per placement share, the Chinese canned vegetable and fruits producer said in a bourse filing on Monday morning (March 25) before the market opened.

The issue price represents a discount of 6.98 per cent to Sino Grandness' volume weighted average price of $0.043 for trades done on March 22.

The placement is subject to certain conditions, including the in-principle approval of the Singapore Exchange. If these conditions are not satisfied within six months from the date of the placement agreement, the agreement will be terminated.

The 170 million placement shares represent 17.36 per cent of the company's existing issued share capital and approximately 14.79 per cent of its enlarged share capital after the proposed placement.

Sino Grandness said JW Capital Group, which now holds no shares in the company, wishes to be a strategic investor in the company and agreed to subscribe for the placement shares as part of its own business strategies.

Shares of the company last closed flat at $0.043 apiece on March 22.