CORDLIFE Group is proposing to raise S$8.2 million by issuing a total of 51.2 million new ordinary shares at S$0.16 apiece.
On Wednesday (Apr 17), the cord-blood bank said it entered into two separate subscription agreements with Charming Global Enterprises (CGE) and Darren Ng, a high-net-worth individual based in Singapore.
CGE is owned by Jiao Shuge, who co-founded Beijing-based private equity and venture capital firm CDH Investments.
Through respective private placements, CGE will subscribe for 44.5 million of the new shares for S$7.1 million, while Ng will purchase 6.7 million shares for S$1.1 million.
Both will collectively hold about 16.6 per cent of Cordlife’s enlarged capital post the new share placement, which would result in the company’s share base increasing to 307,503,222 shares from 256,307,744 currently.
The issue price represents a 4.9 per cent premium to its two-week volume weighted average price of S$0.1525 per share for trades done on the Singapore Exchange on its last full market day on Monday, before the agreements were inked.
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Cordlife said it believes its proposed subscription will strengthen the company’s financial position with net cash proceeds of some S$8 million.
It intends to use 49.7 per cent of this for working capital and to rebuild its Singapore brand, while reserving the remaining 50.3 per cent for contingency purposes.
The company will place its new shares under its general mandate, which was granted by shareholders at its last annual general meeting.
Based on pro-forma financial estimates, the transaction is dilutive to Cordlife’s net tangible assets (NTA) per share and earnings per share (EPS).
Assuming the subscription had taken place on Dec 31, 2023, the company’s FY2023 NTA per share would have been S$0.37 as opposed to S$0.41.
EPS for the fiscal year would have been S$0.0116 rather than S$0.0145 had the transaction been completed on Jan 1, 2023.
Shares of Cordlife : P8A 0% were unmoved at S$0.148 as at 9.15 am on Wednesday, after the group’s announcement.