Vallianz Holdings has lifted its two-day trading halt to announce the launch of a proposed rights-cum-warrants issue that could raise gross proceeds of up to S$143.8m ($106.1m) if all warrants are exercised.
Up to 3,596,211,385 new ordinary shares in the Singapore-listed company will be raised in the renounceable non-underwritten rights-cum-warrants issue. The shares will be sold at an issue price of S$0.020 for each rights share.
In addition, each rights share sold will come with a free detachable warrant, which will carry the right to subscribe for one new ordinary Vallianz share at an exercise price of S$0.020.
Rawabi Holdings, a leading Saudi Arabian oil and gas service company, has signed an irrevocable undertaking through which it will spend a subscription amount of up to S$72.0m ($53.1m) in purchasing rights in the issue, which means the offering will be fully subscribed. This could increase Rawabi’s shareholding in Vallianz from 18.71% to 30% or more.
Vallianz said it intends to use proceeds, before the exercise of the warrants, to partially repay advances it has received from Rawabi, as well as to repay bank loans and for working capital purposes.
“The company is undertaking the rights-cum-warrants issue to strengthen the financial position of the group,” Vallianz said in a filing.
“In view of the irrevocable undertaking, and after taking into consideration the cost of engaging an underwriter and having to pay commission in relation to such underwriting, the company has decided to proceed with the rights-cum-warrants issue on a non-underwritten basis,” Vallianz continued.
Vallianz has received around S$83.7m ($61.7m) in advances from Rawabi, but has agreed not to decrease the amount to below S$72.0m ($53.1m) before the issue closes.
The rights offering is subject to approval from shareholders and the fulfillment of certain administrative requirements.