Published July 30, 2009

Rowsley proposes rights issue with warrants

By CHEN HUIFEN

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INVESTMENT company Rowsley has proposed a rights issue to raise net proceeds of up to $14.9 million. The issue comes with free warrants which could potentially raise another $38 million.

The renounceable, non-underwritten issue will be on the basis of two rights shares with three warrants for every five existing shares held. This involves the issue of up to 253.3 million rights shares at 6 cents each.

The issue price of six cents represents a 37 per cent discount to the closing price of 9.5 cents yesterday. The issue comes with up to about 380 million three-year warrants, each convertible to one share at an exercise price of 10 cents.

Apart from general corporate and working capital purposes, Rowsley said the net proceeds of up to $14.9 million from the rights issue will be used to provide financial support to San Technology Holding and for investments, if opportunities arise. The company did not provide more details on San Technology, but according to its website, San Technology is 51 per cent owned by Rowsley and is in the business of developing renewable energy and lubricating oil recycling businesses in China. Proceeds from exercise of warrants will provide the company with future liquidity.

'STH leverages on leading edge nano-technology based membrane-separation technology to process used lubricating oil into high quality base oil which refinery blenders can use as raw material to produce their lubricating oils for the consumer market,' Rowsley's website said.

Rowsley is 22.88 per cent owned by former remisier Peter Lim Eng Hock. The substantial shareholder has given an undertaking to subscribe in full his entitlement of the rights share with warrants. Rowsley said it has received in-principle approval from the Singapore Exchange for the listing of the proposed shares and warrants.

In recent years, Rowsley is most remembered for a high-profile reverse takeover that did not materialise. In 2007, the company dropped its plan for a highly-publicised $2.7 billion reverse takeover deal with Chinese solar energy firm Perfect Field.