Advanced Systems Automation Announces Major Rights Cum Warrants Issue to Strengthen Financial Position
Advanced Systems Automation Limited (ASA) has announced a significant financial move involving a proposed renounceable non-underwritten rights cum warrants issue. This issue is aimed at raising funds to cover professional expenses, partial cash consideration for acquisitions, and to improve the company’s working capital and financial position.
Key Highlights of the Proposal
- The company plans to issue up to 1,093,521,189 new ordinary shares at an issue price of S\$0.005 per share, representing a substantial discount of approximately 73.7% to the last traded price of S\$0.019 per share.
- Additionally, up to 729,014,126 free detachable warrants will be issued, each warrant carrying the right to subscribe for one new ordinary share at an exercise price of S\$0.003 per share.
- The issue is on the basis of three rights shares for every two existing shares held, with two warrants for every three rights shares subscribed.
Details Shareholders Need to Know
Shareholders should be aware of the following important details:
- Purpose of Issue: The funds raised will be used for partial payment of professional expenses related to the acquisition of LSO Organization Holdings Pte. Ltd., partial payment of cash consideration to the vendors of LSO Acquisition, and general corporate and working capital purposes.
- Provisional Allotments: Entitled shareholders can accept, decline, renounce, or trade their provisional allotments, and they are also eligible to apply for excess shares.
- Size and Impact: The issued and paid-up share capital of the company could increase significantly, potentially up to 2,551,549,441 shares if all rights shares and warrant shares are fully exercised.
- Non-Underwritten Basis: The issue will not be underwritten, as the directors believe it is not cost-effective to do so.
- Eligibility: Entitled shareholders include those with shares credited to their securities accounts with registered addresses in Singapore as of the record date. Foreign shareholders may not be able to participate due to regulatory restrictions.
Potential Impact on Share Price
This proposed rights cum warrants issue is likely to be price-sensitive and could significantly impact ASA’s share price. The substantial discount on the issue price and exercise price compared to the last traded price and theoretical ex-rights price (TERP) is expected to attract shareholder interest and potentially increase trading volume.
Shareholders are advised to exercise caution and consider the potential benefits and risks associated with this issue. The company’s financial position and working capital are expected to improve significantly, which could enhance shareholder value in the long term.
Next Steps
The company will seek shareholder approval for the issue at an extraordinary general meeting (EGM) to be convened. A circular detailing the rights cum warrants issue will be dispatched to shareholders in due course.
The board of directors believes that this issue is in the best interest of the company and its shareholders, considering the company’s fundraising needs and the current market conditions.
Further announcements will be made as necessary to keep shareholders informed of the progress of the rights cum warrants issue.
Disclaimer: This article is for informational purposes only and does not constitute financial advice. Shareholders and potential investors should consult their financial, tax, or other professional advisors before making any investment decisions.
