Rex International Holding, an oil exploration and production company listed on the Singapore Exchange's Catalist board, said on Monday it will issue new shares to fund more exploration drilling and expand its oil services business.
It will place out up to 70 million new shares at 75.5 cents apiece, for estimated net proceeds of about $50.5 million.
About two-thirds of this will be used to conduct exploration and drilling in the Asia-Pacific, Middle East, Norway and Western Europe.
The remaining third will go towards the expansion of Rex's oil services business using well stimulation technology.
Rex said on Monday it has signed a shareholders' agreement with Swiss firm Ogsonic for the joint venture company, Rexonic, to be incorporated in Switzerland.
It said Rexonic "will own the world's first environmentally-friendly, high-power ultrasound technology for commercial oil well stimulation that has shown to increase oil production from 30 per cent to 380 per cent both onshore and offshore", Rex said.
Rex will hold two-thirds of Rexonic's shares while Ogsonic will hold the final third. Rex will fund its holding in Rexonic through US$10 million in cash and US$10 million ($12.4 million) in new shares.
The placement price of 75.5 cents per share represents a 9.6 per cent discount to the volume-weighted average price of 83.56 cents per share for the full day before the signing of the placement agreement on Oct 25, the company said in a stock market filing.
The placement will not be underwritten.