Singamas $63 million rights issue oversubscribed

Singamas Container Holdings has announced that its HK$492 million ($63 million) rights issue was oversubscribed. Acceptances and applications were equal to more than 214.5% of the offering size of 1.4 billion rights shares.

In a statement the company said it received 204 valid acceptances for 1.35 billion shares, representing 96.3% of the offering size. The remaining 52 million shares were allotted to investors who made excess applications.

The deal launched in early March with a subscription price of HK$0.35 per share, a 53.9% discount to the last trading price at the time and a 28.6% discount to the theoretical ex-rights price of HK$0.49. Shareholders were entitled to two shares for every share they held. The rights shares represent 200% of the company's pre-rights issue share capital and two-thirds of the capital of its enlarged share base after the issue.

The main shareholder, Pacific International Lines, and parties acting in concert with it, have maintained a stake of 46%. Since the deal was fully subscribed, the underwriters (DBS) were not required to pick up any of the rights shares, leaving the remaining 54% to the remaining shareholders. At the start of the deal, major shareholders included DNB Nor Asset Management, Shah Capital Management and UBS, with 7%, 5.4% and 4.9% respectively.

The share price dropped by 38% immediately after the announcement of the rights issue, but held above the rights price throughout the subscription period and on Monday closed at HK$0.48.

The purpose of the issue is to repay bank loans, save on interest payments and generally strengthen the company's financial position.

The company, which is a shipping container manufacturer and logistics services provider, has manufacturing facilities in 11 cities in China and one in Indonesia. It has eight container depots in China, two in Hong Kong, and another one in Thailand.