SINGAPORE (Mar 19): Blumont Group is planning a rights cum warrants issue to raise about $27 million in net proceeds if the rights shares are fully subscribed.

Blumont says the 70% of the net proceeds raised will be used to make partial payment to its creditor Wintercrest Advisors LLC while the remaining 30% will be used for working capital purposes.

The renounceable non-underwritten rights issue will see up to 2.7 billion new shares at an issue price of 1 cent each as well as the same number of free detachable warrants with each warrant carrying the right to subscribe to one new share at an exercise price of 1.2 cents.

The issue price is on par with the volume weighted average price of one share traded on the SGX on March 17.

Shareholders will be entitled to subscribe to one rights share with one free detachable warrant for every share they own.

Based on the existing issued share capital of the company of 2.7 billion shares and assuming that the rights issue is fully subscribed, Blumont’s issued share capital will double to 5.4 billion shares. If all the warrants are exercised, the company will have an issued share capital of 8.1 billion shares.

Blumont howeverr says the final number of rights shares and warrants will depend on the company’s takeover bid for Genesis Resources where 1.2 billion new shares will be issued as consideration.

The rights cum warrants issue is subject to approval of shareholders at an extraordinary general meeting.