ValueMax says it expects to raise some $41.7 million through a one-for-five rights issue to shareholders. The rights issue, shares the group, is meant to strengthen the group’s financial position and capital base.

In a statement dated April 13, the group says it is presently exploring “alternative means of fundraising” in addition to external borrowings and issuing debt instruments to boost the group’s balance sheet.

The group, on the same day, says it is proposing to undertake a non-renounceable non-underwritten rights issue of up to 116.4 million new ordinary shares in the capital of the company.

For every five existing ValueMax shares, shareholders are entitled to subscribe to one rights share at an issue price of 36 cents per rights share.

The issue price represents an 8.116% discount to the volume weighted average price (VWAP) of 39.18 cents per share for shares traded on the mainboard on April 9, which is the full market day on which the shares were traded immediately before the announcement.

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The price also represents a 6.856% discount to the theoretical ex-rights price of 38.65 cents per share, which is the theoretical market price of each share assuming all the rights shares are issued.

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Should all 116,401,122 shares be issued, ValueMax’s total issued and paid-up share capital will increase from 582,005,613 to 698,406,735 shares.

Yeah Holdings, a controlling shareholder of the company, which holds 375.5 million shares, representing 64.52%, will be providing an irrevocable undertaking in the company.

Assuming that the group’s shareholders subscribes for its pro rata entitlement to the rights shares and none of the excess rights shares, Yeah Holdings will hold about 68.58% of the ValueMax’s total voting rights.

Yeah Holdings is 70%-owned by ValueMax’s managing director and CEO Yeah Hiang Nam and his wife Tan Hong Yee; 10%-owned by ValueMax’s executive director Yeah Lee Ching; and 10%-owned by yet another executive director of ValueMax, Yeah Chia Kai.

Shares in ValueMax closed 0.5 cent lower or 1.3% down at 37.5 cents on April 13.