SINGAPORE (Mar 6): Raffles Education Corp is cancelling its proposed 2-for-10 rights issue, which would have allowed the group to raise up to about $27.4 million in net proceeds after raising 275.9 million new shares at the issue price of 10 cents per share.  

Citing “recent market conditions”, the group also notes that its current share price is currently below the 10-cent issue price of the rights shares.

Prior to the midday trading break, shares in the group were down by 2 cents or 18.2% in the year to date (YTD) at 8.8 cents.

Its stock price fell below the 10-cent level since Feb 15 after the group on Feb 13 announced a wider 2Q19 loss of $15.2 million compared to its loss of $1.4 million in 2Q18, due to higher depreciation expenses and costs post the closure of its loss-making institutions in Sydney and Beijing.

To recap, Raffles Education first announced its proposed rights issue on Dec 6 last year saying it intended to channel part of the net proceeds to repaying its debt. This includes about $16.4 million worth of shareholder loans owed to its CEO and chairman, Chew Hua Seng.

At the time of the Dec 2018 announcement, the issue price of 10 cents represented a discount of about 27%.

The group says in its latest Wednesday filing that the group will re-consider other fund raising options and plans, while taking into consideration current circumstances.