Sunpower Group Revises Rights Issue Terms: Convertible Bonds Now Seeking SGX Listing

Key Highlights:

• Sunpower Group revises terms of its S\$99.61 million convertible bond rights issue
• Convertible bonds now seeking listing on SGX-ST
• Conversion price set at S\$0.25, with more flexible conversion periods
• SGX-ST grants approval in-principle for listing of bonds and conversion shares
• Net proceeds expected to be S\$98.51 million under maximum scenario

Sunpower Group Ltd. (the “Company”) has announced significant revisions to its proposed renounceable non-underwritten rights issue of convertible bonds, potentially affecting shareholder interests and the company’s capital structure.

Revised Terms of the Rights Issue

In a surprising move, the Company has decided to seek listing for the convertible bonds on the Singapore Exchange Securities Trading Limited (SGX-ST). This is a departure from the previous announcement where the bonds were not intended to be publicly traded. This change could potentially increase liquidity for bondholders and attract more investors.

The initial conversion price has been set at S\$0.25 per share, with the important caveat that it shall not be less than the par value of a Share of US\$0.01. This provision protects the company’s capital structure while offering a clear conversion benchmark for investors.

Notably, the conversion period has been made more flexible. Bondholders can now convert their bonds into shares at any time after 60 days from the issue date, up until 15 business days before the maturity date. This change from the previously announced quarterly intervals could provide bondholders with greater strategic flexibility in timing their conversions.

Allotment Details

The rights issue will be made on a renounceable basis, with 125 convertible bonds offered for every 1,000 existing shares held. Importantly, shareholders are not required to hold a minimum of 1,000 shares to participate, with the company providing examples of allotment for smaller shareholdings.

Financial Impact

The company has revised its estimated net proceeds downward slightly. Under the maximum scenario, net proceeds are now expected to be approximately S\$98.51 million, after deducting about S\$1.10 million in expenses. This represents a marginal decrease from the previously announced figures but still provides substantial capital for the company’s intended uses.

SGX-ST Approval

The SGX-ST has granted approval in-principle for the listing and quotation of the convertible bonds and the resulting conversion shares. This approval is subject to several conditions, including shareholder approval at a special general meeting, compliance with listing requirements, and various written undertakings from the company regarding the use of proceeds and compliance with listing rules.

Potential Impact on Shareholders

These revisions could significantly impact shareholders and potential investors. The listing of the bonds could increase their attractiveness and potentially affect the company’s share price. The more flexible conversion terms might lead to more dynamic trading patterns and could influence the timing of dilution effects on existing shareholdings.

Shareholders should carefully consider these changes and their potential impacts before making any investment decisions. The upcoming special general meeting will be a crucial event for shareholders to voice their opinions on these revised terms.

Next Steps

The company will be dispatching an Offer Information Statement (OIS) to entitled shareholders, containing the final terms and conditions of the rights issue. Shareholders are advised to review this document carefully when it becomes available.

Disclaimer: This article is for informational purposes only and does not constitute financial advice. The information presented here is based on company announcements and may be subject to change. Investors should conduct their own research and consult with financial advisors before making any investment decisions. Trading in securities carries risks, and past performance is not indicative of future results.

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