HG Metal Manufacturing Receives SGX-ST Approval for Major Rights Issue
HG Metal Manufacturing Receives SGX-ST Approval for Major Rights Issue
HG Metal Manufacturing Limited, a leading steel manufacturer in Singapore, has received approval in-principle from the Singapore Exchange Securities Trading Limited (SGX-ST) for its proposed renounceable non-underwritten rights issue. This significant financial maneuver involves the issuance of up to 74,254,237 new ordinary shares at an issue price of S\$0.266 per share, based on 10 rights shares for every 27 existing shares.
Key Approvals and Conditions
The approval from SGX-ST, dated 7 November 2024, is contingent upon a few conditions:
- Compliance with SGX-ST’s listing requirements for the rights issue.
- A written undertaking by the company to adhere to Listing Manual Rules 704(30) and 1207(20), detailing the use of proceeds, particularly for working capital.
- Confirmation that Green Esteel, the largest shareholder, has sufficient financial resources to fulfill its commitments under the Irrevocable Undertaking.
Strategic Rationale and Use of Funds
HG Metal Manufacturing has outlined strategic reasons for this rights issue, aiming to leverage its enhanced relationship with Green Esteel. The company plans to use the proceeds, estimated at approximately S\$19.35 million, for several key initiatives:
- Expanding business facilities to boost operational efficiency and production capacity.
- Opening sales offices overseas to strengthen global presence and market penetration.
- Increasing inventory to support expansion plans and other corporate needs.
- Identifying strategic investments and acquisitions in synergistic businesses.
Potential Impact on Shareholders
This rights issue provides shareholders with an opportunity to further participate in the company’s equity, potentially affecting share value. The move follows recent placements in 2023 and 2024, which led to Green Esteel becoming the largest shareholder. Shareholders should be aware of the importance of this approval and the strategic direction it represents for the company.
Important Notice
This announcement is informational and not an offer or solicitation to buy or sell securities. The rights shares will not be registered under the United States Securities Act of 1933 and are not offered in the United States. Shareholders and potential investors should review all related documents and announcements thoroughly.
Disclaimer: This article is for informational purposes only and should not be considered as financial advice. Readers are encouraged to consult a financial advisor for advice specific to their financial situation.
View HG Metal Historical chart here
