Manufacturing company Scintronix responds to SGX queries

SGX investigates why the Company has chosen to proceed with the proposed placement of 814,371,793 new ordinary shares.

Here's more from the SGX announcement:

PROPOSED PLACEMENT OF 814,371,793 NEW ORDINARY SHARES IN THE CAPITAL OF SCINTRONIX CORPORATION LTD

Further to the announcement dated 17 September 2012, SGX had, on 19 September 2012, raised various queries, the responses to which by the Company are set out in this announcement.

SGX: Has the Company considered other means of raising funds? Please explain why the Company has chosen to proceed with the Placement as the issue and allotment of the Placement Shares will also result in the Placee's shareholding in the Company crossing 30%, and thus crossing the Rule 14 threshold under the Singapore Code on Takeover Code requiring a mandatory general offer to be made for the shares of the Company.

Company’s response:
The Company has raised funds through placement, rights issue and loans in the past to fund working capital requirements. However, given the Company’s “watchlist” status, its current weak financial position and the rather challenging environment of the industry it operates in, the Company is of the view that raising funds for working capital needs from its existing shareholders will be difficult.

The Company is exploring opportunities with a view to expanding into a different industry and the current placement presents both an opportunity for the Company to raise funds to meet its current working capital needs as well as make available initial funds for diversification or acquisition opportunities that the Company is currently looking into.

With this placement, it is intended that the Company will with the support of the Investor explore new businesses and investment opportunities to add value to the Company and its shareholders. As noted in the announcement released on 17 September 2012, the Proposed Placement is subject to the SIC granting its waiver from Rule 14 of the Code as well as independent shareholders’ consent to the Whitewash Waiver.

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