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.