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Proposed Placement Of Up To 40, 000, 000 New Ordinary Shares Of HK$0.20 Each In The Capital Of Willas-Array Electronics (Holdings) Limited

Oct 16, 2003

The Board of Directors of Willas-Array Electronics (Holdings) Limited (the "Company", and together with the subsidiaries, the "Group") wishes to announce that the Company had entered into a Placement Agreement with G. K. Goh Stockbrokers Pte Ltd (the "Placement Agent") on 16 October 2003 (the "Placement Agreement") where, subject to and upon the terms and conditions of the Placement Agreement, the Placement Agent has agreed on a best efforts basis, to procure subscription and payment for, up to 40,000,000 new ordinary shares of HK$0.20 each (the "New Shares") in the capital of the Company at the placement price of S$0.28 (the "Offer Price") for each New Share (the "Placement").


Shareholders' Mandate

The New Shares will be allotted and issued pursuant to the general mandate to issue shares, granted by the Shareholders by way of an ordinary resolution passed at the Annual General Meeting of the Company on 26 August 2003.

The New Shares represent up to approximately 15.0% of the existing issued share capital of the Company and no other shares have been issued for cash within the past 12 months.


Condition Precedent

The Placement is subject to certain conditions precedent more particularly set out in the Placement Agreement, including the lodgement of a statement of material facts ("SMF"), which complies as to form and content with the Twelfth Schedule of the Securities and Futures (Offers of Investments) (Shares and Debentures) Regulations 2002, with the Monetary Authority of Singapore and the approval from the Singapore Exchange Securities Trading Limited (the "SGX-ST") for the listing and quotation of the New Shares on the Official List of the SGX-ST.


Use of Proceeds

The maximum net proceeds from the Placement will amount to approximately S$10.6 million, after deducting estimated expenses of S$0.6 million. The total net proceeds will be used as working capital for the expansion of the Group's logistics centres in Shanghai and Shenzhen of the People's Republic of China, the upgrading of the Group's application and development capabilities for delivering solutions to the Group's clients, and for working capital purposes.


Financial Impact

The New Shares when issued and fully paid will rank pari passu in all respects with the existing ordinary shares of HK$0.20 each in the Company (the "Shares") as at the date of issue of the New Shares except for any dividend, right, allotment or other distributions, the record date of which falls on or before such date of issue.

The Offer Price represents a discount of approximately 2.8% to the weighted average price of S$0.288 for trades done for the Shares on the SGX-ST on 15 October 2003, being the date immediately preceding the date on which the Placement Agreement was signed.

When completed and assuming all the 40,000,000 New Shares are subscribed for, the New Shares will increase the existing issued and paid up share capital of the Company by approximately 15.0% from HK$53,200,000 comprising 266,000,000 Shares to HK$61,200,000 comprising 306,000,000 Shares. The issue of the New Shares will increase the Shareholders' funds from approximately HK$231.6 million to approximately HK$280.7 million and increase the net tangible asset backing per share of the Group from 87.07 HK cents to 91.73 HK cents.


Statement of Material Facts

A Statement of Material Facts, which complies as to form and content with the Twelfth Schedule of the Securities and Futures (Offers of Investments) (Shares and Debentures) Regulations 2002, has today been lodged with the Monetary Authority of Singapore.


Securities Lending Agreement

In connection with the Placement, the Placement Agent and Open Mind Profits Limited ("Lender"), a substantial shareholder of the Company, has entered into a securities lending agreement dated 16 October 2003 whereby the Lender has agreed to lend up to 40,000,000 of its Shares (equivalent to approximately 15.0% of the existing issued and paid up share capital of the Company) to the Placement Agent to facilitate the early settlement of Shares to placees procured by the Placement Agent. Under the securities lending agreement, the Lender is not entitled to any profit that may accrue pursuant to the loan.


Interests of Directors and Substantial Shareholders

None of the Directors or substantial shareholders of the Company or their associates has any interest, direct or indirect, in the Placement.