ASTI Holdings Limited Announces Proposed Placement of Up to 128 Million New Ordinary Shares

Key Highlights

• Placement Size: Up to 128,000,000 new ordinary shares at S\$0.025 per share.
• Total Consideration: Up to S\$3,200,000 in gross proceeds.
• Placement Agent: SAC Capital Private Limited engaged on a best endeavours basis.
• Placement Not Underwritten: The placement is not underwritten and will not require a prospectus.
• Exemptions: Placement undertaken under various SFA exemptions for private placement, institutional, and accredited investors.
• Share Price Premium: The placement price is a 78.57% premium to the last traded VWAP (S\$0.014) before suspension, but a 51.42% discount to the Group’s last reported NTA per share.
• Trading Status: Shares have been suspended since July 2022; resumption of trading is a key condition for placement completion.
• Share Capital Impact: New shares represent 19.55% of the current issued capital and 16.35% of the enlarged share base.
• No Change in Controlling Interest: Placement will not result in any transfer of controlling interest.
• Commission to Agent: SAC Capital to receive a 4.0% commission on placed shares plus any end-placee commissions and brokerage.
• Use of Proceeds: Net proceeds (~S\$3.03m) to be used for business expansion (60%), R&D (30%), and working capital (10%).
• Financial Effects: NTA per share will decrease from 5.15 cents to 4.69 cents; EPS improves from a loss of 3.74 cents to a loss of 3.15 cents per share due to the enlarged share base.
• No Placement to Directors/Substantial Shareholders: Placement shares will not be issued to directors, substantial shareholders, or interested persons unless exempted by SGX-ST.

Detailed Summary for Investors

ASTI Holdings Limited has announced a proposed placement of up to 128 million new ordinary shares at S\$0.025 each, aiming to raise up to S\$3.2 million. This move comes as the company prepares for the potential resumption of trading on the Singapore Exchange Securities Trading Limited (SGX-ST), after having been suspended since July 2022 due to non-compliance with SGX-ST’s watch-list removal criteria and subsequent delisting notices.

The placement price represents a significant premium to the last traded price, suggesting management’s confidence in the company’s valuation post-restructuring and business initiatives. However, the price is a substantial discount to the company’s last reported net tangible assets, reflecting the challenges faced by ASTI Holdings, including three consecutive years of losses and prolonged trading suspension.

Salient Terms and Conditions

• The placement is not underwritten and is dependent on the Placement Agent’s best efforts to secure investors under relevant SFA exemptions.
• Shares will be allotted free of encumbrances and rank pari passu with existing shares, except for entitlements declared before completion.
• SAC Capital will receive a commission of 4.0% on successful placements, and may also charge end-placees additional commission and brokerage.
• Completion is subject to key conditions, including the resumption of trading on SGX-ST, regulatory approvals, fulfillment of safe harbour exemptions, no adverse material events, and continued validity of listing approval.
• No new controlling shareholder will emerge, and major shareholders or directors will not participate in the placement unless exempted or approved.

Financial Impact

• The enlarged share base will dilute NTA and EPS, but the immediate cash injection is expected to support strategic initiatives.
• Pro forma calculations show NTA per share to fall from 5.15 cents to 4.69 cents, with EPS loss per share narrowing from 3.74 cents to 3.15 cents due to increased share count.
• No shares have yet been issued under the existing general mandate, making this placement within shareholder-approved limits and not requiring further approval.

Use of Proceeds

• Business Expansion (60%): To fund growth with existing customers and explore new opportunities.
• Research & Development (30%): Targeted at equipment development to improve product yield rates.
• Working Capital (10%): General corporate purposes.
• The company will disclose material disbursements and provide regular status updates in its financial statements and public announcements.
• Pending full deployment, proceeds may be temporarily invested in short-term instruments at management’s discretion.

Governance and Shareholder Safeguards

• Placement Agent confirms that placement commission will not be shared with end-placees, and no share borrowing arrangements are involved.
• End-placees will not acquire controlling interest or become substantial shareholders post-placement.
• Directors and substantial shareholders (and their associates) are excluded from participation, reinforcing transparency and regulatory compliance.
• Placement agreement is available for inspection for three months at the company’s registered office.
• Further announcements will be made regarding progress, regulatory approvals, and material developments.

Key Price-Sensitive Considerations for Shareholders

• Resumption of Trading: Completion of the placement is conditional on SGX-ST trading resumption, which could be a major catalyst for share price movement.
• Dilution: Significant share dilution is expected, with new shares representing over 19% of current capital.
• Financial Recovery: Use of proceeds for business expansion and R&D may signal a turnaround, but risks remain given historical losses and the recent suspension.
• Premium Placement Price: The premium to last traded price suggests management’s optimism, but investors should consider the discount to NTA and historical performance.
• No Change in Control: Placement does not result in a change of control, reducing the risk of unexpected strategic shifts.
• Transparency: Regular updates and status reports on use of funds provide some assurance for investors.
• Regulatory and Market Risks: The placement may not proceed if conditions precedent are not met, including regulatory approvals and trading resumption. Investors should monitor further announcements closely.

Conclusion

The proposed placement by ASTI Holdings Limited is a significant corporate action intended to recapitalize the company, support its strategic growth initiatives, and position it for business recovery. While the placement price signals management’s confidence, shareholders should be aware of the accompanying dilution, ongoing financial challenges, and the critical dependency on the resumption of trading. This announcement is price-sensitive and could have material impact on valuation and investor sentiment, contingent on successful execution of the placement and subsequent business performance.

Disclaimer

This article is prepared for informational purposes only and does not constitute investment advice or an offer to buy or sell any securities. Investors are advised to read all official company announcements and consult professional advisers before making investment decisions. The information herein is based on the company’s public disclosures and may be subject to change as further details emerge.

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