Wednesday 3 March 2010
FibreChem unveils US$50m lifeline
On Feb 22, FibreChem entered into an investment agreement with Prima Andalan Sentosa for the latter to invest up to US$50 million via subscription of new shares. Prima is owned by Patrick Soetanto, a member of the Soetanto family of Indonesia that is involved in textile and fibre businesses.
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FibreChem unveils US$50m lifeline
Proposal for share trading resumption submitted to SGX
By LYNETTE KHOO
02 March 2010
FibreChem Technology has made it in time to submit a proposal to the Singapore Exchange (SGX) for resumption of trading of its shares.
On Feb 22, FibreChem entered into an investment agreement with Prima Andalan Sentosa for the latter to invest up to US$50 million via subscription of new shares. Prima is owned by Patrick Soetanto, a member of the Soetanto family of Indonesia that is involved in textile and fibre businesses.
FibreChem said it plans to use the proceeds for general corporate purposes and to expand production capacity and/or the restructuring or settlement of all claims or liabilities.
The Soetanto family is said to have collaborated with the Salim Group and the Lippo Group in a wide variety of interests in the Indonesian textile industry. Mr Soetanto represents the interests of the Soetanto family and the Salim Group in PT South Pacific Viscose.
‘Other strategic investors may be invited to participate in the investment,’ FibreChem said in a regulatory filing last week.
The issue price of the new shares will be determined by FibreChem and the investor not later than three months from the date of the agreement.
Prima may nominate no fewer than three directors to the board and two representatives to be chief executive officer and chief financial officer.
The investment agreement is subject to, among other things, due diligence by Prima and the results being satisfactory; regulatory approval for the listing of the new shares; lifting of share trading suspension, and approval from shareholders.
If the conditions are not fulfilled by Aug 22, the investment agreement will terminate. Completion of the agreement is proposed to take place five business day after all of the conditions have been met or waived.
The trading resumption proposal was submitted by the group on Feb 22 to SGX, within the Feb 25 deadline - one year from its trading suspension.
FibreChem was then hit by accounting irregularities. Its external auditors could not finalise an audit of its trade receivables and cash balances for the year ended Dec 31, 2008.
Its trading suspension subsequently triggered a default on a US$35 million loan facility.
nTan Corporate Advisory was appointed as independent investigator and financial adviser to help the group stay afloat.
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