GKE Corporation’s Bold S\$8.53 Million Private Placement: Expansion or Dilution Risk?

Key Takeaways for Investors

• GKE Corporation Limited announces a proposed private placement of up to 88,123,510 new ordinary shares at S\$0.0968 per share, raising up to S\$8,530,356 in gross proceeds.
• The placement represents a discount of ~9.87% to the recent volume weighted average price (VWAP) of S\$0.1074 per share.
• If fully subscribed, the new shares will account for 11.44% of the current share capital, and 10.26% of the enlarged capital after the placement.
• No prospectus will be issued, as the placement is carried out under exemptions in the Securities and Futures Act (SFA).
• Net proceeds (after estimated S\$350,000 expenses) are earmarked 100% for local and overseas expansion of logistics and warehousing.
• Shareholders are cautioned about potential dilution and are advised to exercise care in trading.

Details of the Placement and Implications

GKE Corporation Limited, a Singapore-based logistics and warehousing provider, announced a proposed private placement to raise up to S\$8.53 million by issuing up to 88.1 million new ordinary shares at S\$0.0968 each. Soochow Singapore Capital Markets (Asia) Pte. Ltd. will serve as placement agent, with Maybank Securities Pte. Ltd. as sub-placement agent, under a best endeavours arrangement (the placement is not underwritten).

This placement price reflects a discount of approximately 9.87% to the VWAP of S\$0.1074, based on trades up to the trading halt on 23 September 2025. The shares to be issued are free from encumbrances and will rank pari passu with existing shares, except for dividends or distributions declared prior to issue.

How Will This Affect Existing Shareholders?

• Dilution Risk: If fully subscribed, the placement will dilute existing shareholders by 11.44% (current share capital), with the enlarged share base rising from 770,476,490 to 858,600,000 shares. EPS will drop from 1.15 cents to 1.03 cents, and NTA per share will decrease from 12.27 cents to 11.96 cents.
• No Prospectus Issued: The placement is conducted under SFA exemptions (Sections 272B, 274, 275), meaning less regulatory scrutiny and disclosure than a public offering.
• Placement Agent Restrictions: Shares will not be placed to directors, substantial shareholders, or interested persons, nor will the placement result in a change of control or trigger a mandatory takeover. The agent is required to confirm that placees are not acting in concert and have no business relationship with the company or its key persons.
• Commission Costs: Placement agent and sub-agent will receive a commission of 2% of the placement price, and may charge end-placees an additional 1% commission. Total estimated expenses are S\$350,000.
• Use of Proceeds: All net proceeds (approx. S\$8.18M) will be used for logistics and warehousing expansion, enhancing GKE’s financial flexibility and potentially broadening its shareholder base for improved liquidity.
• Listing Application Pending: Sponsor RHT Capital will submit for listing approval on Catalist. The placement is subject to regulatory conditions and listing grant.
• Trading Caution: Completion is subject to conditions precedent; shareholders are warned there is no guarantee the placement will complete as planned.

Potential Share Price Impact

• Positive: If expansion plans succeed, the company’s growth and financial flexibility may drive future value and liquidity.
• Negative: The discount to market price and significant dilution could exert downward pressure on the share price in the short term. EPS and NTA per share will also decline post-placement.
• Risk Factors: Investors should closely monitor announcements regarding placement completion, use of proceeds, and any changes in terms.

Directors’ and Substantial Shareholder Interests

No directors or substantial shareholders (or their associates) will participate directly in the placement, except as may be permitted under SGX rules. The Placement Agent has confirmed no shares will be placed to insiders or related parties.

Transparency and Oversight

GKE will announce the use of proceeds in interim and full-year financial reports, with status updates and explanations for any material deviation from stated use. Pending deployment, proceeds may be held in bank deposits or short-term investments.

What Should Investors Do?

Shareholders are urged to exercise caution and consult their advisors before taking any action. The placement is subject to regulatory approval and completion conditions, with uncertainty remaining over the final outcome and timing.

Disclaimer

This article is for informational purposes only and does not constitute investment advice or a recommendation to buy or sell securities. Investors should conduct their own due diligence and seek professional advice tailored to their financial situation. The information was compiled from public disclosures believed to be accurate, but no guarantee is offered as to its completeness or correctness. Share price movements may occur on news or events described herein, and readers should be aware of risks including dilution and market volatility.

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