Bio-Treat / Boustead: Boustead to reduce its investment in Bio-Treat to $4m (100m shares @ 4cts) from a proposed $42.7m in convertible bonds that would have translated to a 20% stake on a fully diluted basis, as the latter will have less need for investment after its rights issue. The issue of CBs was delayed due to regulatory concerns, hence the decision to proceed with the rights issue first. The share acquisition will be financed from Boustead's internal cash resources…
Separately, Bio-Treat’s rights issue was 55.3% oversubscribed. It expects to issue the 948m rights shares today and list them at 9am tmrw.
Bio-Treat, a Chinese wastewater firm, has been looking to raise funds after uncertainty over its going- concern status arose due to debts incurred under a previous convertible bonds programme and a HK$360m (S$61m) loan from former substantial sh/h Precious Wise.
move somewhat positive for Boustead, as investment risk in Bio-Treat is reduced. Moreover terms of share purchase (at 4cts/sh) are more favorable than the previous arrangement to take up the CBs (convertible at 5cts/sh).
Neutral for Bio-Treat since they still manage to raise the needed capital.
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