GSS Energy Limited Announces Strategic Rights Issue to Strengthen Financial Position

GSS Energy Limited has unveiled a strategic financial maneuver aimed at solidifying its financial base and providing shareholders with a unique opportunity to expand their equity holdings. The company has proposed a renounceable non-underwritten rights issue of up to 607,222,761 new ordinary shares, priced at S\$0.013 per share. This move comes with a significant discount of approximately 55.2% to the volume weighted average price and the closing price on the Catalist Board as of October 22, 2024.

The rights issue is structured on a nine-for-ten basis, allowing shareholders to acquire nine new shares for every ten existing shares held. This initiative is set to bolster the company’s capital base, repay existing shareholder loans, and enhance the group’s working capital.

Key Details of the Rights Issue

• Issue Price: S\$0.013 per share, offering significant discounts to market prices.
• Allotment Ratio: Nine rights shares for every ten existing shares.
• Net Proceeds: Expected to be approximately S\$7.7 million under the maximum subscription scenario, with allocations for loan repayment, working capital, and business expansion.

Irrevocable Undertaking by Major Shareholder

Mr. Sydney Yeung Kin Bond, a director and controlling shareholder, alongside Roots Capital Limited, has provided an irrevocable undertaking to subscribe to their full entitlement, totaling 85,800,150 rights shares. This commitment underscores the confidence and support from key stakeholders.

Implications for Shareholders

Shareholders are advised to consider the implications of the rights issue, which offers an avenue for increased equity participation and potentially impacts share value due to the discounted pricing. The rights issue is expected to not only address financial obligations but also position the company for future growth.

Eligibility and Participation

The rights issue is open to entitled shareholders, including both entitled depositors and scripholders with registered Singapore addresses. Foreign shareholders should note that the offer documents will not be dispatched to addresses outside Singapore.

Strategic Rationale

This financial strategy is primarily aimed at repaying the existing shareholder’s loan and strengthening the company’s financial and capital standing, providing a robust platform for future business ventures.

Conclusion

GSS Energy Limited’s proposed rights issue represents a pivotal step in addressing its financial commitments while offering shareholders a chance to engage further with the company’s growth trajectory. Investors should weigh the potential benefits and market impact of this significant equity move.

Disclaimer: This article is for informational purposes only and should not be construed as financial advice. Investors are urged to consult with financial advisors before making investment decisions based on the rights issue.