MENCAST HOLDINGS will soon welcome a property tycoon as its No.2 shareholder.
Wong Swee Chun has agreed to pump in about S$12.37 million cash for 45,831,000 new shares (10.83% stake in the company) via a proposed share placement at 27 cents a share.
Adding his existing shares of Mencast, Mr Wong will own 11.80% of the enlarged share capital of Mencast (excluding treasury shares).
Wong Swee Chun, chairman of Hoi Hup Realty and Straits Construction. Photo: CompanyHe is founder and Chairman of Hoi Hup Realty, an established real estate development company.
He also controls Straits Construction Group, an award-winning building construction company, which was involved in an unsuccessful attempt in 2014 to reverse takeover mainboard-listed Transcu Group.
He would be investing in an industry very different from real estate, as Mencast is a Singapore-based maintenance, repair and overhaul provider comprising Offshore & Engineering, Marine and Energy Services.
There is one other investor in Mencast's share placement -- Goh Kai Kui, CEO of Goh Joo Hin Pte. Ltd, a fast moving consumer goods brand owner and distributor with business networks spanning parts of Asia and the Pacific region.
Mr Goh has agreed to subscribe for an aggregate of 9,259,000 new shares at S$0.27 each, representing approximately 2.21% of the enlarged share capital of the Group. Adding his existing shareholding, his stake in Mencast will rise to 2.32%.
| Stock price | 24.5 cents |
| 52-week range | 18.6 – 45 cents |
| PE (ttm) | 7.98 |
| Market cap | S$89.3 million |
| Shares issued | 364.3 million |
| Dividend yield | 4.08% |
| Source: Bloomberg |
The share placement will raise gross proceeds of S$14.8 million to partially repay Mencast's existing debt.
Glenndle Sim, CEO of the Group and the controlling shareholder along with his family, said, “The financial commitment from our investors is a firm vote of confidence in the Group’s ability to execute its strategy and create shareholder value going forward.
"The proceeds from the Private Placement will be used to pay down existing debt so as to place the Group in a more secure financial position, which the Board believes is prudent in view of the current challenging business environment.”
As at end-Sept 2015, Mencast had S$106.2 million in short-term debt and S$85.6 million in long-term debt. Its cash and cash equivalents stood at S$14.7 million.
For details, see Mencast announcement.