mm2 Asia is seeking to raise $15 million in a proposed placement round, by issuing 1,875,000,000 new ordinary shares at 0.8 cents a piece.
On July 4, the company entered into a placement agreement with placement agent UOB Kay Hian (UOBKH). The placement price was arrived at pursuant to discussions with UOBKH taking into account the prevailing market price of the shares.
The minimum placement price represents a premium of about 14.3% to the volume weight average price (VWAP) of 0.7 cents for trades done on the SGX for the full market day of July 4.
Assuming successful placement of the placement shares, the placement shares represents about 28.7% of existing issued and paid-up share capital of the company comprising 6,535,644,330 shares, and will represent 22.3% of the enlarged issued and paid-up share capital of the company.
mm2 says that the rationale for the placement shares is part of the company’s ongoing efforts to strengthen its financial position and to provide funding for the repayment of its debts and outstanding liabilities. It is expected to help improve the group’s cash flow and support its working capital requirements as well.
After the deduction of fees, the company intends to utilise the $14 million net proceeds in two ways. The first is to spend $7.5 million on repayment of debt and liabilities, and the remaining $6.5 million is to finance general capital working purposes.
See also: Sanli Environmental Limited to raise $4 mil in placement round at 12 cents per share
Shares in mm2 Asia closed 0.1 cent lower or 12.5% down at 0.7 cents on July 4.
