WE Holdings to raise up to S$39.4m for business expansion

Will help finance cement and coal ventures.

Singapore Exchage-listed WE Holdings Ltd (WE Holdings) announced that the company is proposing a renounceable non-underwritten rights cum warrants issue of up to 1,313,813,266 new ordinary shares in the capital of the company at an issue price of S$0.015 for each rights share, with up to 1,313,813,266 free detachable warrants.

Each warrant will carry the right to subscribe for one (1) new ordinary share in the capital of the company at an exercise price of S$0.030 for each Warrant Share on the basis of one (1) Rights Share with one (1) Warrant for every two (2) existing ordinary shares.

The company said it will be seeking specific approval from the Shareholders at an extraordinary general meeting of
the company to be convened to approve the Rights cum Warrants Issue.

On 18 May 2013, the Company announced its entry into the term sheet for the proposed acquisition of 20%
shareholding in Dragon Cement Co., Ltd. for an aggregate consideration of US$20 million. Subsequently on 12 September 2013, for the purpose of funding the Dragon Cement acquisition, the company entered into share placement agreements with certain investors for the issue and allotment of an aggregate 204,050,000 new shares at an issue price of S$0.04302 per new shares for an aggregate amount of S$8,778,231, together with a grant of options to such investors to subscribe for an aggregate 204,050,000 additional shares at the issue price of S$0.047322 per option share, for an aggregate amount of S$9,656,054.10.

It was anticipated that on the issue of the placement shares and the full exercise of the option, the company
will raise approximately S$17.66 million net proceeds to fund the Dragon Cement Acquisition. While the
Placement was completed on 2 October 2013, the options were not exercised by any of the investors and
expired on 8 December 2013.

As such, the company is now proposing to carry out the Rights cum Warrants Issue, with estimated net
proceeds being ranging from S$12.7 million to S$39.41 million, and intends to use the net proceeds in the following proportions: (a) up to S$15 million to partially fund the Dragon Cement acquisition; (b) up to S$10 million to fund the expansion of the Group’s coal business; and (c) the balance, if any, towards the Group’s working capital requirements.

“The proposed Rights cum Warrants Issue is in line with our plan to tap on the growth opportunities in the petroleum, oil and gas and related resources sector in Myanmar. The company has decided to proceed with the Rights cum Warrant Issue on a non-underwritten basis as the company believes that the issue price of S$0.015 for each rights share and S$0.03 for each warrant is sufficiently attractive," said WE Holdings.

'Further, the Directors are of the opinion that there is no minimum amount which must be raised from the Rights cum Warrant Issue, as in the event it is unable to raise sufficient funds for the Dragon Cement acquisition, the company will source for alternative sources of funding, including but not limited to bank borrowings. Hence, in view of the above and the savings enjoyed for not having to bear underwriting fees, the company has decided to proceed with the Rights cum Warrant Issue on a non-underwritten basis.”