BRC Asia has entered into a placement agreement with CGS-CIMB Securities in a bid to raise $14.2 million.

Under the terms of the agreement, BRC Asia will issue up to 10 million new ordinary shares in the capital of the company at an issue price of $1.42.

The placement is not underwritten and will be undertaken by way of an exempt offering in Singapore in accordance with sections 274 (institutional investors) and 275 (accredited investors and certain other persons) of the Securities and Futures Act.

Accordingly, no prospectus or offer information statement will be issued by the company in connection with the placement.

The placement price represents a discount of 9.44% to the volume weighted average price (VWAP) of $1.568 per share for trades done on SGX-ST on Jan 13.

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The discount is within the 10% limit under rule 811(1) of SGX-ST’s listing manual.

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Assuming all the placement shares are placed out, shares in BRC Asia will increase from 233.3 million shares to 243.3 million shares.

Both figures exclude the 1.63 million treasury shares.

The placement shares represent about 4.11% of the enlarged issued share capital.

The placement shares will not be given to anyone who is a director or substantial shareholder of the company, and will not result in a transfer of controlling interest of the company.

The placement shares will be allotted and issued through a general mandate at BRC Asia’s annual general meeting held on Jan 30.

The completion of the placement will take place at 7.30am three business days after the receipt of the approval-in-principle from SGX-ST, or no later than Feb 26.

The estimated amount of proceeds from the placement after estimated expenses, will come up to $13.7 million.

“The company has decided to undertake the placement in order to increase resources available to the company,” says the statement dated Jan 18.

“The directors are also of the opinion that the net proceeds will further strengthen and supplement the group's financial position and capital base. The company intends to apply all of the net proceeds to the repayment of the group's outstanding bank borrowings,” it adds.

Shares in BRC Asia closed flat at $1.55 on Jan 18.