Swiber Raises Funds through Placement of 84MM New Shares
Swiber plans to raise up to S$73.9 million through a private placement by issuing up to 84,000,000 new ordinary shares in the capital of Swiber at an issue price of S$0.88 per Placement Share . This amounts to an aggregate consideration of up to S$73.9 million. The proposed placement represents approximately 19.9% of the existing issued share capital of Swiber.
The placement agent for this exercise is CIMB-GK Securities Pte. Ltd. Swiber has entered into a placement agreement with CIMB-GK dated May 29, 2009. The Issue Price represents a discount of approximately 15.3% to the volume-weighted average market price ("VWAP") of S$1.0386 for each ordinary share in the capital of Swiber based on trades done on the Main Board of the Singapore Exchange Securities Trading Limited (the "SGX-ST") on May 28, 2009 (being the preceding market day prior to the signing of the
Placement Agreement) and up to the time the Placement Agreement was signed. In addition, the Issue Price represents a discount of approximately 7.7% to the VWAP of the shares over the last 10 market days of approximately S$0.9531.
To facilitate the Placement, certain directors and substantial shareholders of the Group, namely Mr. Raymond Goh, Mr Jean Pers and Mr. Darren Yeo (the Lenders), have entered into a securities lending agreement with CIMB-GK on May 29, 2009. As part of the Securities Lending Agreement, the Lenders will lend CIMB-GK up to an aggregate of 84,000,000 Shares for delivery to the end placees.
The estimated net proceeds from the Placement will amount to approximately S$71.8 million (after deducting expenses incurred in connection with the Placement and assuming that the Placement Agent procures subscribers for all the 84,000,000 Placement Shares), which Swiber intends to utilize as general working capital purposes. Pending its deployment, the net proceeds may also be placed as deposits with banks and financial institutions or invested in short term money markets or debt instruments or for any other purpose on a short-term basis.
Mr. Raymond Goh, Executive Chairman and Group Chief Executive Officer of Swiber said, "This placement exercise will further boost our cash standing and equity. This will give us the financial flexibility to fund corporate developments and working capital."
"With the net proceeds raised, we will work towards executing our expansion and growth plans
and ultimately, enhance shareholder value. The placement exercise will serve to further
enhance the liquidity of our shares to the benefit of all shareholders,” added Mr Goh.
Mr Goh further understands from CIMB-GK that the Placement was well received, particularly by institutional investors, and substantial demand was generated for the Placement Shares. Mr. Goh said, "We would like to thank CIMB-GK for its efforts in successfully bringing us to the capital market again and executing this fund raising exercise so effectively."
The Placement is conditional upon, amongst others, the in-principle approval from the SGX-ST for the listing and quotation of the Placement Shares on the Main Board of the SGX-ST.
1Q09 Financial Performance
For the three months ended March 31, 2009 (1Q09), Swiber reported a 15.3% year-on-year rise in earnings to US $11.9 million. Revenue during the quarter surged 22.9% to US $87.1 million, from US $70.9 million a year ago (1Q08), underpinned by increased activities in EPCIC projects in Malaysia, Indonesia and India.
In 1Q09, Swiber generated a net cash inflow from operating activities of US $30.2 million, versus a net cash outflow of US $25.4 million in 1Q08 and the Group reduced its borrowings by US $51.4 million, successfully lowering its net debt to equity ratio of 0.94 times, compared to 1.01 times as at December 31, 2008.
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