KITCHEN Culture on Wednesday announced a proposed placement involving 21 investors, which will give it about S$9.5 million in net proceeds, if shareholders approve. 

 

The group has proposed a placement of 40.6 million new ordinary shares at S$0.235 per share. The price represents a discount of 9.62 per cent to the volume-weighted average price of S$0.26 for shares traded on July 17, when the shares were last traded prior to the placement being proposed. 

 

Kitchen Culture said that 21 investors have agreed to subscribe for the shares. Of them, 15 are existing shareholders of the company the rest came through the group' s " business contacts and connections" . 

 

But Kitchen Culture has said that each subscriber entered into the subscription agreement " purely for investment purposes" , and has " no intention" of influencing the management of or exercising control over the company, and is not acting in concert with any persons to obtain or consolidate control of the company.

 

To the best of its knowledge, Kitchen Culture added, none of the subscribers have any connection, including business relationships, with the company, its directors and substantial shareholders, save as disclosed.

 

Kitchen Culture, which is pursuing a new medical supplies business, said the proposed placement will strengthen its financial position and improve cash flow to meet anticipated general working-capital requirements and the repayment of amounts owing to external parties. It will also increase resources and working capital available to the group to pursue new business opportunities.

 

Assuming that the proposed placement is fully subscribed, Kitchen Culture will get net proceeds of S$9.5 million, after deducting expenses.

 

Post-deal, the group is expected to see net borrowings lowered to S$4.2 million, from S$6.2 million. Net gearing will decrease to 0.18, from 0.45. 

 

In May, Kitchen Culture entered into a convertible loan agreement with various investors, where investors agreed to grant an interest-bearing convertible loan of S$6.1 million. In exchange, the company agreed to allot and issue up to nearly 47 million new shares at theconversion price of S$0.149 per new share, should the investors exercise their respective conversion rights.