ISR Capital taps new shareholders with S$12 mil placement
ISR Capital has announced that it will raise S$12 million by
issuing 141 million new shares priced at 8.5 Singaporean cents each to four
investors.
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By Chan Chao Peh, The Edge
05 September 2016
ISR Capital has announced that it will raise S$12 million by issuing 141 million new shares priced at 8.5 Singaporean cents each to four investors.
The company is in the process of acquiring a 60% stake in a company that holds a rare earth mining concession in Madagascar from REO Magnetic for a total of S$40 million. ISR has said it will pay for this by issuing new shares to REO Magnetic at 10 Singaporean cents each.
Who are the investors who are getting into ISR now? Among them is Chen Tong, a Chinese national who is now the managing director of Newview Resources. He is said to have experience in the mining industries of Australia, Canada, South Africa and the Asean region. Chen is investing S$4 million, which will give him a 2.88% stake.
The second investor is Lee Thiam Seng, who is now the chairman and CEO of Ecowise Holdings, an SGX listed company focused on renewable energy. He is investing $2 million, which will give him a 1.43% stake.
The third investor is Financial Frontiers, a private equity firm headed by Bill Ng Eng Tiong, a former UOB KayHian stock broker. Ng is not entirely new to the resources industry. He is the second largest shareholder, with 11.87%, of gold miner CNMC Holdings, whose shares have surged by nearly 200% over the past year.
Ng, who is also chairman of two football clubs Hougang United Football Club and Tiong Bahru Football Club, had earlier in his career helped arrange the Hong Kong listing of Cambodian casino company Naga Corp.
Ng is investing S$4 million in ISR, which will give him a 2.88% stake.
The fourth investor is Ong Siew Choo, described by ISR as “an accredited investor of independent financial means”. Ong is said to have been introduced to ISR by its executive director David Rigoll, who is instrumental in bringing the rare earth deal to the company.
She is investing S$2 million, which will give her a 1.43% stake.
ISR said in a Sept 4 announcement that the proceeds from the placement will be used to fund its application and receipt of a pilot production permit, and extraction of the rare earth oxides at the mining concession held by the company it is acquiring. ISR has yet to call for an EGM to approve the rare earth deal.
According to ISR, the placement to raise S$12 million will be carried out in two separate but equal tranches. Also, Chen and Lee will be stumping up a total of S$3 million within ten days of Sept 2, the date of the subscription agreement. This “advance payment” will carry an interest of 5% a year and will start to accrue with each day until the completion of the first subscription tranche.
The placement is being managed by Empire Capital Partners, a company that ISR engaged as a consultant on both technical and fund raising matters. On Aug 14, after repeated questions from Singapore Exchange, ISR admitted that a director of Empire Capital Partners named Timothy Morrison is also a director REO Magnetic, the vendor of the asset ISR is acquiring. ISR will be paying Empire Capital Partners a fee of 3% of the proceeds from the placement, or S$360,000.
ISR has an on-going plan to raise up to $35 million from Value Capital Asset Management (VCAM), which is led by an individual named John Poon Seng Fatt, through a redeemable convertible bond programme. The bonds ISR issued had a coupon of 2%.
Back in May, VCAM has subscribed for and converted some S$950,000 in RCB to shares at 0.4 Singaporean cent. It sold these shares to Rigoll at 0.5 Singaporean cent each in May 9, giving him a commanding stake of nearly 30% in ISR. Shares in ISR surged more than 20-fold immediately after.
VCAM is not taking part in the placement exercise that ISR has just announced.
As at 12.49 p.m., ISR shares were up 6.38% to 10 Singaporean cents.
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