Magnus Energy to place 2.53b new shares to raise S$2.28m

Magnus Energy is placing out 2.53 billion new shares at 0.09 Singapore cent apiece to four parties to raise S$2.28 million in cash.

The four individuals are Lee Thiam Seng, Ong Boon Tiong Daniel, Low Chin Yen and Liu Bin. According to the company's filing to the Singapore Exchange, they are "private investors who have expressed their interest in taking up new shares in the company for investment purposes".

The issue price represents a discount of approximately 10 per cent to the volume-weighted average price of S$0.001 for trades done on June 28, the last full market day with trade preceding the date on which the subscription agreement was signed.

Magnus Energy's rationale is to strengthen its financial and working capital position. The company intends to use the net proceeds for general working capital for corporate expenditures, and as funds for a microalgae oil cultivation project.

The shares represent approximately 20.05 per cent of the total number of issued shares. Assuming that all of the 2.53 billion subscription shares are issued, the company's issued and paid-up share capital (excluding treasury shares) will increase from 12.6 billion, as at the date of this announcement, to 15.2 billion. It will represent approximately 16.7 per cent of the enlarged issued and paid-up share capital (excluding treasury shares) of the company after the subscription.

Assuming the subscription was completed on July 1 2016, the net loss per share of the group (after adjustment for the subscription shares) will decrease from S$0.001 to S$0.0008.

If completed on June 30 2017, the net asset value per share of the group after adjusting for the subscription shares and the net proceeds will decrease from S$0.0038 to S$0.0031.

Vivien Shiao

05 July 2018