Zixin Group Holdings plans to grant 889 million share options with an exercise price of 3 cents to a group of investors led by executive chairman and CEO Liang Chengwang. The share options can be exercised up till five years from the issue date.
In total, if all the options are exercised, these investors will be chipping in up to $26.67 million.
Zixin shares closed at 3.2 cents on Sept 18.
Liang will be receiving 300 million share options, and other investors include both existing and new shareholders.
Thomas Clive Khoo, known to be a key shareholder of Zixin who has been steadily increasing his stake, is not among the investors receiving the options.
Khoo last increased his stake on May 27 when he bought 8 million shares at 3.3 cents each from the open market, bringing his stake to nearly 214.6 million shares, or 13.501%.
Liang, in contrast, holds just over 242.6 million shares, or 15.27%. If he exercises his entire option of 300 million shares, he will own over 542.6 million shares, equivalent to 21.89% of the company's enlarged share capital.
This arrangement will require the approval of shareholders at an EGM to be called.
Zixin Group is a China-based foodstuffs manufacturer, focusing on sweet potato-based products.
The company explains that the majority of its cash on hand is held by its China-based entities, and thus channelling funds to its Singapore entities will be subject to the completion of the requisite administrative procedures and require processing time.
As such, Zixin is of the view that deploying part of the net proceeds as general capital would strengthen its cash position and its Singapore subsidiaries would be in a better position to pay ongoing expenses such as salary, rental and other professional fees.
The additional funds will also give Zixin more flexibility to finance its growth plans via new business opportunities.
