Judge approves restructuring plan for struggling barramundi farmer
A judge has approved a restructuring plan for debt-burdened Singapore fish farmer Barramundi Group.
The approval by the Honourable Justice Aidan Xu yesterday enables Barramundi Group to move forward with the plan, which entails a private placement of more than 135 million new shares at S$0.0289 per share to raise S$3.4m. The subscription price implies a 77% discount of the trading price on Euronext Growth Oslo at closing on May 27.
An additional S$800,000 will be raised via convertible shareholders’ loans by each of Andrew Kwan Kok Tiong and Brunei-registered Warif Holdings Limited for S$400,000 each. Warif Holdings is the company's second-largest shareholder, with a 10.82% stake. Kwan is one of Barramundi Group's three directors.
Principal creditor United Overseas Bank Limited (UOB) will convert around half of the S$10m-plus debt owed to it by Barramundi Group into 17,540,274 new shares in the company. In addition, UOB will receive S$1 million in cash from Barramundi Group as full and final settlement of its debt to the bank.
Dilution of ownership
As a result of the private placement and the conversion of debt to shares, implying the issuing of at least in total 162,714,421 new shares in the company, existing non-participating shareholders will be diluted by 77%.
When agreement on the restructuring was reached with UOB in May, Barramundi Group’s board said the scheme was the best option to protect the joint interests of the company, its creditors, and the shareholders.
“By structuring the equity raise as a private placement with a subsequent offering, the company will be able to raise capital in an efficient manner with significantly lower completion risks compared to a rights issue. Thus, the deviation from the shareholders' pre-emptive rights inherent in a private placement is considered necessary.”
