Lum Chang Creations inks placement deal to raise $26.5m

The placement forms part of its planned transfer to the SGX Mainboard. 

Lum Chang Creations Limited has entered into a placement agreement involving up to 35 million shares worth up to $26.5m as part of its planned transfer from Catalist to the Singapore Exchange Mainboard.

The placement comprises up to 15 million new shares to be issued by the company and up to 20 million existing shares to be sold by Lum Chang Holdings and Lim Thiam Hooi, according to a bourse filing.

The shares will be placed at $0.759 apiece and are expected to raise gross proceeds of about $11.4m for Lum Chang Creations. After estimated expenses, the group expects net proceeds of about $10.8m.

The existing share sale will raise up to $9.3m for Lum Chang Holdings and up to $5.8m for Lim Thiam Hooi.

The company plans to use $6m of the net proceeds to explore acquisitions, investment opportunities, strategic alliances, or joint ventures. 

It will also allocate $1.5m each for regional expansion and high-end residential fit-out projects, whilst $1.8m will be used for working capital. 

Lum Chang Creations said the placement is intended to increase the proportion of shares held by the public to meet Mainboard public float and shareholding spread requirements.

If the placement is fully completed, the company’s issued share capital will increase from 315 million to 330 million shares. The new placement shares will represent 4.55% of the enlarged share capital.

The proposed placement is expected to be completed on 29 June, subject to conditions including receipt of the listing and quotation notice from the Singapore Exchange for the new shares.

The placement price represents a 9.92% discount to the volume-weighted average price of $0.8426 for trades done on 17 June, the last full market day before the company called a trading halt.