Chemical manufacturer Jiutian Chemical Group has entered into a placement agreement with CGS-CIMB Securities in a bid to raise some $10.3 million.

Under the terms of the placement agreement, Jiutian Chemical will issue up to 170 million new ordinary shares at an issue price of 6.03 cents per share, which will amount to an aggregate consideration of up to $10.3 million.

The news came on the morning of Oct 19 before the lunchbreak following the lifting of a trading halt on the counter. Jiutian Chemical requested for a trading halt before the market opened on Oct 16.

According to an SGX filing, the placement price of 6.03 cents represents a discount of about 5.63% of the volume weighted average price of 6.39 cents for trades done on the SGX-ST on Oct 15.

The discount is within the 10% discount limit according to Rule 811(1) under Catalist Rules.

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The placement shares represent some 9.35% of the existing issued share capital of the company, which comprises 1.82 billion shares as at Oct 19, and will represent 8.55% of the enlarged issued share capital of the company of 1.99 billion shares, assuming all the placement shares are placed out.

The 170 million shares, says the company, is within the limit of the general mandate obtained at the 2020 annual general meeting held on June 23, 2020.

Completion of the placement will take place at 10am on three business days after all the conditions have been satisfied or waived.

Jiutian Chemical says it has decided to undertake the placement to strengthen its financial position and to improve its shareholder provider.

See also: Jiutian Chemical Group is 'good trading opportunity' after turnaround in 2Q20: KGI Securities

The full net proceeds will be used for its general working capital.

As at 1.03pm, shares in Jiutian Chemical were trading 0.2 cent or 3.1% higher at 6.6 cents.