Meta Health Limited Announces \$1.43M Rights Issue to Strengthen Financial Position

Meta Health Limited, a Singapore-based healthcare company, has announced a renounceable non-underwritten rights issue to raise up to S\$1.43 million. The proposed rights issue is expected to strengthen the company’s financial position, improve working capital, and support its growth and expansion plans. The move comes as the company seeks to address its existing loan obligations and capitalize on potential strategic business opportunities.

Key Details of the Rights Issue

• Issue Size: Up to 264,078,029 new ordinary shares will be issued.
• Issue Price: S\$0.006 per Rights Share, representing a discount of approximately 14.29% to the last traded price of S\$0.007 (as of December 5, 2024).
• Allotment Ratio: One (1) Rights Share for every four (4) existing shares held by entitled shareholders.
• Use of Proceeds: 55% of the net proceeds (approximately S\$0.79 million) will be allocated for loan repayment, while the remaining 45% (approximately S\$0.64 million) will go toward general corporate and working capital purposes.
• Maximum Subscription Scenario: If fully subscribed, the company expects to raise approximately S\$1.43 million, after deducting estimated expenses of S\$0.15 million.

Rationale for the Rights Issue

The Board of Meta Health Limited emphasized the need for this fundraising initiative to strengthen the company’s balance sheet. By raising fresh capital, the company aims to achieve the following:

• Improve its working capital position to meet current operational needs.
• Repay existing loans to reduce financial liabilities.
• Enhance financial flexibility to seize future growth and expansion opportunities.

Alternative fundraising methods, such as third-party placements, were considered but rejected due to the potential for significant dilution of existing shareholder equity. The rights issue allows existing shareholders to maintain their pro rata equity interest while participating in the company’s future growth.

Important Shareholder Information

• The rights issue will be conducted on a renounceable basis, allowing entitled shareholders to trade their provisional allotments during the “nil-paid” rights trading period.
• Fractional entitlements will be disregarded and aggregated to satisfy excess applications or otherwise dealt with at the discretion of the Board.
• Shareholders (including directors and substantial shareholders) applying for excess shares will be subject to priority rules, with those seeking to round up odd lots receiving preference.
• The issue will not be underwritten to reduce costs, but the Board has stated that there is no minimum amount required to be raised.

Eligibility to Participate

Entitled shareholders, including both Entitled Depositors and Entitled Scripholders, must meet the following criteria to participate:

• Have a registered address in Singapore or provide such an address no later than three market days prior to the Record Date.
• Shareholders holding shares under CPF or SRS schemes must apply through their respective approved agent banks.

Foreign shareholders and purchasers with registered addresses outside Singapore will not be eligible to participate in the rights issue, and their provisional allotments may be sold “nil-paid” on the SGX-ST, subject to conditions.

Regulatory Approvals

The rights issue is subject to obtaining the Listing and Quotation Notice (LQN) from the Singapore Exchange Securities Trading Limited (SGX-ST) and the lodgment of the Offer Information Statement with the Monetary Authority of Singapore (MAS). The company will announce further updates as developments occur, including the determination of the Record Date.

Potential Impact on Share Value

The rights issue is expected to have a significant impact on shareholder sentiment and market valuation. The discounted issue price and the allocation of proceeds toward strengthening the company’s financial stability could positively influence investor confidence. However, the dilution of shares and potential scaling down of excess applications may also affect market dynamics.

Director and Shareholder Interests

None of the directors or substantial shareholders, aside from their existing shareholding interests, have any direct or indirect interest in the rights issue. The directors have collectively and individually confirmed the accuracy of the information provided.

Conclusion

Meta Health Limited’s rights issue reflects its commitment to navigating financial challenges and positioning itself for growth. Shareholders are advised to carefully review the terms and consider participating in the rights issue to maintain their equity stake and benefit from potential future growth.

Disclaimer

This article is for informational purposes only and does not constitute financial advice. Shareholders and investors are urged to consult their financial advisors before making any investment decisions. The completion of the rights issue is subject to regulatory approval, and there is no assurance of its success.