GSS Energy Limited Announces Significant Rights Issue: Implications for Shareholders
GSS Energy Limited, a company incorporated in Singapore, has announced a proposed renounceable non-underwritten rights issue, set to impact up to 607,222,761 new ordinary shares. This initiative is priced at S\$0.013 per Rights Share, presenting a 55.2% discount to the volume-weighted average price and the closing price on 22 October 2024, and a 38.5% discount to the theoretical ex-rights price.
The rights issue aims to repay an outstanding shareholder loan, strengthen the company’s financial position, and provide shareholders an opportunity to further participate in the equity of the company. Under the maximum subscription scenario, the company anticipates gross proceeds of S\$7,893,896. In the minimum subscription scenario, proceeds are expected to be around S\$1,115,402.
The issue will be conducted on a nine-for-ten basis, meaning shareholders will receive nine Rights Shares for every ten existing shares they hold. Importantly, the issue is non-underwritten, relying heavily on the support of Mr. Sydney Yeung Kin Bond, a Director and controlling shareholder of the company, who has provided an irrevocable undertaking to support the issue by subscribing to his pro-rata entitlement.
Shareholders should note the potential for significant adjustments to outstanding warrants and share options due to the rights issue. The company has announced that these adjustments will be made in due course, with notifications sent to holders of such securities.
Eligible shareholders, defined as those with registered addresses in Singapore, will receive provisional allotments of Rights Shares. However, foreign shareholders may face restrictions due to jurisdictional securities laws.
Shareholders should be aware that the trading of odd lots resulting from this rights issue may encounter illiquidity on the Unit Share Market, potentially affecting market dynamics and share value.
In terms of financial implications, the company plans to utilize the net proceeds for partial loan repayment, working capital, and business expansion. The rights issue is contingent upon several regulatory approvals, which the company is currently pursuing.
Disclaimer: The contents of this article are based on the announcement by GSS Energy Limited as of 23 October 2024. Shareholders and potential investors should exercise caution and consult financial advisors before making investment decisions based on this information.
