Raffles Education said on Tuesday it cancelled its proposed rights issue of up to 275.86 million shares at S$0.10 each as its share price fell below the rights offering price.
The stock ended Tuesday at S$0.088, down S$0.002, down from levels around S$0.14 in late November.
“In light of recent market conditions and the prevailing traded price of the shares, which is currently below the issue price of the rights shares under the rights issue, the board wishes to announce that it has decided not to proceed with the rights issue,” Raffles Education said in a filing to SGX on Tuesday.
“The board will re-consider, taking into consideration the prevailing circumstances, other fund raising options and plans for the group and will keep shareholders updated on any developments,” it added.
It’s not the first dramatic turn for the rights issue, which was initially announced in early December.
In mid-December, in an effort to scuttle the rights offering, Oei Hong Leong and Oei Hong Leong Art Museum sent a letter to the company stating that they hold more than 10 percent of Raffles Education’s issued shares and that they required an extraordinary general meeting (EGM) be convened under section 176 of the Companies Act of Singapore.
Under section 176, holders of at least 10 percent of a company’s shares can requisition the company to call an EGM within two months as long as they have stated the object of the meeting and signed the requisition.
At the time, Raffles Education had said the two shareholders had been seeking an individual vote on the following resolution: “That the proposed rights issue of up to 275,858,734 new ordinary shares in the company with the rights issue proceeds to settle the company’s Chairman and Chief Executive Officer, Mr. Chew Hua Seng’s loans to the company as announced by the company on the 6 December 2018 be terminated immediately.”
The company later said it wouldn’t call the EGM as the resolution was invalid because shareholders at the annual general meeting held on 29 October had approved a share issue mandate.