Key Highlights

• Issuer: Raffles Education Limited
• Bond Type: Unlisted, Non-Convertible Bonds
• Aggregate Principal Amount (Fourth Tranche): S\$1,000,000
• Total Bond Programme: Up to S\$10,000,000
• Fourth Tranche Subscriber: Ng San Tiong
• Interest Payable on Fourth Tranche: S\$525,000 (assuming redemption at 5-year maturity)
• Interest Payable as % of Group’s Audited Net Tangible Assets (NTA): 0.090% (NTA as at 30 June 2024: S\$579,770,000)
• Use of Proceeds: Refinancing of Group borrowings and/or working capital
• Completion Status: Completion not guaranteed; shareholders advised to exercise caution

Detailed Overview

Raffles Education Limited has entered into a Subscription Agreement with Ng San Tiong for the issuance of S\$1 million worth of unlisted, non-convertible bonds under its ongoing bond programme. This marks the fourth tranche of the bond issue, following previous tranches that have been completed with other investors.

Terms and Conditions

• The bonds are being issued directly to Ng San Tiong, who subscribes as principal for investment purposes only and has confirmed no intention to influence company management or exert control over the company.
• The subscription is made under the “safe harbour” exemptions provided in the Singapore Securities and Futures Act (SFA), meaning no prospectus or offer information statement will be issued.
• The subscriber must remain an institutional investor under section 274 or an accredited investor/relevant person under section 275 of the SFA for as long as he holds the bonds. He also commits not to resell the bonds in a manner prohibited by the SFA.

Rationale and Use of Bond Proceeds

• The estimated net proceeds of S\$1 million from this tranche will be used primarily to refinance existing borrowings of the Group and/or for working capital purposes.
• Pending usage, funds may be deposited in banks, invested in short-term money market instruments, or marketable securities, or used for other short-term purposes at the Directors’ discretion.
• The allocation of this tranche was specifically made to Ng San Tiong, based on his requested subscription amount.

Audit Committee Statement

• The Audit Committee has reviewed the terms and rationale of the bond issue and reiterated its view that the bond issue is on normal commercial terms and not prejudicial to the interests of the Company and minority shareholders.

Potential Impact and Risks for Shareholders

• Completion Risk: There is no certainty or assurance that the Fourth Tranche Issue will proceed to completion as of the announcement date. This is a key risk for investors.
• Share Price Sensitivity: The announcement of new debt financing, especially at this scale and on these terms, may affect investor sentiment and share valuation. The use of proceeds to refinance debt and support working capital is generally positive, improving liquidity and financial stability.
• Trading Caution: Shareholders are strongly advised to exercise caution in trading the shares and to monitor further announcements closely for material developments.
• Transparency: Copies of the Subscription Agreements will be available for inspection at the Company’s registered office for three months from the announcement date, reflecting the Company’s commitment to transparency.

Conclusion

This bond issue is a significant financial event for Raffles Education Limited, potentially impacting the company’s capital structure, liquidity position, and investor perception. Shareholders and potential investors should remain vigilant and consider the risks associated with the completion and deployment of these funds. Any further material developments will be announced by the Company.

Disclaimer

This article is for informational purposes only and does not constitute investment advice. Investors are advised to conduct their own due diligence and consult professional advisers before making any investment decisions related to Raffles Education Limited. The completion of the bond issue is not guaranteed and may be subject to change.

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