Published March 12, 2009

Sing Hldgs proposes $13m rights issue

By JOYCE HOOI

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PROPERTY group Sing Holdings has joined the growing list of companies raising funds through rights issues. In a bid to raise about $13 million in net proceeds to finance the group's property development expenses, Sing Holdings announced yesterday a proposed one-for-two rights issue of about 133.7 million new shares.

Meanwhile, Mirach Energy, another company making a cash call, said yesterday that shareholders had approved its rights issue. An IT solutions firm for the oil and gas industry and formerly known as China Petrotech Holdings, Mirach Energy received the go-ahead at an extraordinary general meeting to issue three rights shares for every one existing share at 2.2 cents apiece, for a total of about 887.6 million new shares. Mirach share price closed at 2.5 cents yesterday.

Sing Holdings' issue price of 10 cents for each rights share represents a discount of 39.4 per cent from the stock's last transacted price of 16.5 cents last Friday. Six parties - FH Lee Holdings, Lee Fee Huang, Lee Sze Hao, Lee Sze Leong, Lee Sze Siong and Lee Yit - collectively holding 35.5 per cent of Sing Holdings have undertaken to subscribe in full for their allocation of the rights shares.

These latest cash calls follow a slew of rights offerings by other companies, recent ones being Chartered Semiconductor Manufacturing and Equation Corp, whose issues are expected to net US$300 million and $10.3 million respectively.

Firms looking to raise funds via rights offerings amid the global market turmoil have been taking a gamble where the market's reactions are concerned.

Chartered's share price plunged 39 per cent to 12.5 cents on Tuesday, the day after it announced its rights offering. Yesterday, it closed one cent lower at 11.5 cents.

Neptune Orient Lines' (NOL) share price fell by 12.7 per cent to below $1 on Tuesday as well, on rumours that a rights offering might be in store.

Despite NOL's efforts to address the rumour by stating that it had not entered into any agreements that would require disclosure according to the rules of the Singapore Exchange, its share price sank another seven cents yesterday, closing at $0.865.