CCM Group to raise S$41m to boost property development arm

Through issue of warrants and exchangeable notes.

According to a release, SGX Catalist-listed CCM Group Limited announced today that it will raise up to S$41 million – S$36.0 million via the issue of up to 3.42 billion warrants and a further S$5.0 million from the issue of exchangeable notes – as part of a strategic diversification beyond construction to property development.

The Class-A main contractor is proposing a two-stage issue of warrants which, assuming full conversion into shares, will increase the issued share capital base of CCM by more than 20-fold to 3.60 billion shares from 171.22 million shares currently.

In the first stage, CCM is proposing to issue 1.71 billion bonus warrants on the basis of ten such warrants for every CCM share held.

Each Bonus Warrant – which, upon issue will be listed and traded on SGX Catalist – entitles the holder to subscribe for one new ordinary CCM share at 1.0 Singapore cent (or S$0.01) each, exercisable for up to three years from the date of issue.

Full conversion of the Bonus Warrants issued will raise S$17.1 million and enlarge CCM’s share capital base by 1.71 billion shares, or 11 times, to 1.88 billion shares.

In the second-stage, CCM is proposing to issue one Piggyback Warrant for every one Bonus Warrant exercised.

The holder of the Piggyback Warrant will be entitled to subscribe for one new ordinary CCM share at 1.1 Singapore cents (or S$0.011) each, exercisable within the Warrants Exercise Period, provided that the underlying Bonus Warrant is first exercised by such holder of the underlying Bonus Warrant.

Unlike the Bonus Warrants, the Piggyback Warrants will not be listed and traded on SGX Catalist.

Full conversion of the Piggyback Warrants issued will raise another S$18.8 million and enlarge CCM’s share capital base by a further 1.71 billion.

Assuming full conversion of both issues of warrants, CCM will raise a combined S$36.0 million, and its fully diluted share capital base will be enlarged to 3.60 billion shares, a 21-fold increase from the existing share capital base.