Mercurius Capital Investments is planning to issue 27.3 million new ordinary shares at an issue price of 5.5 cents per new share in a private placement with existing investor Cheah Bee Lin, raising a total of $1.5 million.
The proposed issue price represents a 9.8% discount to the volume-weighted average price (VWAP) of 6.1 cents as of June 2.
Cheah currently holds 3.8 million shares or a 0.29% stake in the company. Following the placement, she will own 31.1 million shares or 2.35% of the enlarged share capital.
Mercurius Capital states that the expected net proceeds from the placement amounting to $1.49 million will be used for business acquisition expenses ($200,000) in relation to its proposed acquisition of grocery businesses in Malaysia, repay borrowings ($800,0000) and general working capital ($485,000).
See: Mercurius share price jumps 20% on news to acquire Malaysia grocery businesses for $36 mil
The placement follows Mercurius Capital’s FY2020 ended December audited financial statements in which its independent auditor, in their report dated March 30, had included a disclaimer of opinion on material uncertainties which may cast significant doubt on the group’s and company’s ability to continue as a going concern.
In its filing to SGX on June 7, Mercurius Capital’s directors stated that the net proceeds from the placement will allow the group to “meet its present requirements”.
Cheah had also previously extended two redeemable convertible loans of $700,000 and $800,000 to Mercurius Capital in December 2019 and January 2020 respectively, with simple interest at the rate of 10% per annum, accruing non-compounded, on the principal sums with a conversion price of 10 cents per share.
Should Cheah chooses to convert the loans upon maturity (on June 13 and July 3 respectively), she will be allotted 15 million new shares upon conversion of the principal sums and 2.3 million new shares in respect of the interest portion.
If converted, Cheah will hold an aggregate of 48.4 million shares, representing approximately 3.61% of the enlarged issued and paid-up share capital of the company.
Mercurius Capital also disclosed that it has raised a total of $5.5 million through the issuance of new shares and convertible loans in the past two years.
Shares in Mercurius Capital closed at 6.1 cents on June 2 before trading was halted on June 3.
