Memiontec’s Ambitious Rights Cum Warrants Issue: A Game-Changer for Investors

Memiontec Holdings Ltd. has unveiled plans for a significant capital-raising initiative through a renounceable non-underwritten rights cum warrants issue. The company aims to issue up to 440,514,000 new ordinary shares at S\$0.009 per Rights Share, coupled with up to 704,822,398 free detachable warrants, each allowing subscription for a new share at S\$0.003. This initiative is based on a ratio of 2 Rights Shares for every 3 existing shares, with 8 Warrants for every 5 Rights Shares subscribed.

The company has appointed ZICO Capital Pte. Ltd. as the issue manager, with the rights and warrants to be listed on the Catalist board of the Singapore Exchange Securities Trading Limited, subject to necessary approvals. Shareholders’ approval will be sought at an upcoming Extraordinary General Meeting (EGM).

Key terms indicate a substantial discount on the Issue Price and Exercise Price compared to recent trading averages, reflecting Memiontec’s strategic positioning amidst prevailing market conditions. The Rights Shares and New Shares are to be issued in compliance with shareholders’ approvals, and the offering is structured to avoid triggering a mandatory general offer obligation under the Singapore Code on Take-Overs and Mergers.

Shareholder Participation and Strategic Implications

Entitled Shareholders, comprising Entitled Depositors and Entitled Scripholders, will be eligible to participate based on their holdings as of a specified Record Date. The rights issue is poised to fortify Memiontec’s financial standing, boosting its capital base and enhancing financial flexibility for corporate and working capital needs.

Executive Director and CEO, Mr. Tay Kiat Seng, who is also a controlling shareholder, has committed to subscribing to his full pro rata entitlement and additional Excess Rights Shares, highlighting his confidence in the company’s prospects. This commitment is structured to maintain the company’s free float under Catalist regulations.

Foreign shareholders will not be eligible due to jurisdictional constraints, although their provisional allotments may be sold on the Catalist, with net proceeds distributed accordingly.

Financial and Strategic Outlook

In the maximum scenario, Memiontec anticipates net proceeds of approximately S\$3,775,000 (assuming no warrants are exercised) or S\$5,889,000 (if all warrants are exercised), intended entirely for general working capital. The minimum scenario projects net proceeds of S\$2,810,000 or S\$4,410,000, respectively.

The initiative marks Memiontec’s first equity fundraising in the past year, underscoring a pivotal moment for potential investors. The Directors assure that the company’s current financial resources are adequate but emphasize the strategic benefits of this capital infusion.

Investors are advised to remain vigilant as the proposal is contingent upon several approvals and market conditions. Memiontec is committed to transparent communication regarding the progress and utilization of funds from this rights cum warrants issue.

Disclaimer: This article is for informational purposes only and does not constitute financial advice. Investors should conduct their own research or consult a financial advisor before making investment decisions.