The placement price represents a discount of about 9.9 per cent to the volume-weighted average price of $2.8247 for trades done on the Singapore Exchange on Tuesday (Aug 18).
UG Healthcare said in a bourse filing on Tuesday night that it had decided to undertake the proposed placement to strengthen the group’s financial position and flexibility to capitalise on growth opportunities.
It plans to use 85-90 per cent of the net proceeds to fund capital expenditure for the growth of the group’s business, including the construction of factory buildings and glove production lines, and the other 10-15 per cent for general working capital purposes, including meeting general overheads and other operating expenses of the group.
The placement shares represent 3.8 per cent of UG Healthcare’s existing share capital, and will represent 3.7 per cent of its enlarged share capital.
The proposed placement is not underwritten and will be undertaken by way of an exempt offering in Singapore.
The joint placement agents are CGS-CIMB Securities (Singapore) and SAC Capital, which have agreed to procure subscriptions on a best efforts basis.
UG Healthcare has also entered into a share lending agreement with controlling shareholder Zen UG to borrow 7.5 million shares to facilitate delivery of the placement shares to the potential subscribers.
UG Healthcare plans to later allot and issue to Zen UG an equivalent number of new shares as repayment for the loan securities. No fees will be payable, and no collateral will be provided by UG Healthcare to Zen UG.
UG Healthcare shares were trading down 12 cents or 4.2 per cent at $2.76 as at 2:08pm on Wednesday.