Mencast Holdings shares gained around a fifth on opening this morning with heavy volume after news last Friday that EDIS will potentially become a substantial shareholder following a three-year $3 million convertible bond.
Under terms of the investment, EDIS, or Economic Development Innovations Singapore, can convert the bond into shares at 14 cents each, adding up to 21.43 million shares.
The conversion price is a 84% premium to Mencast's VWAP of 7.6 cents on April 15, before a trading halt was called.
Assuming full conversion, EDIS, which already owns 2.04% of Mencast shares, will see its stake increase to around 6.3% - assuming no other changes in the share base.
Just on April 14, EDIS partially cashed out from another SGX listed company Addvalue Technologies by selling 55 million shares for $5.17 million, or 9.4 cents each.
This latest transaction saw EDIS stake in Addvalue reduced from 6.45% to 4.95%. EDIS became a substantial shareholder of Addvalue in January, after converting bonds to shares worth $2,148,227 at 1.7 cents each. The sale means EDIS has pocketed a profit of $5.17 million.
See also: EDIS channels proceeds from Addvalue to Mencast with $3 mil convertible bond deal
EDIS, which is chaired by Philip Yeo, says Mencast is a company transforming from traditional carbon-based marine and offshore activities toward a silicon-based future.
Mencast has tapped on capabilities of A*STAR and the National Additive Manufacturing Innovation Cluster, building propellors that will be more efficient, resulting in fuel savings.
As at 9.13am, Mencast shares changed hands at 9 cents, up 18.42%, on heavy volume.
