CORRIE MACCOLL PTE LTD The Board of Directors (the "Board" or the "Directors") of GMG Global Ltd (the "Company") wishes to announce that the Company proposes to undertake a share consolidation (the "Proposed Share Consolidation") of every ten (10) existing issued ordinary shares in the share capital of the Company (the "Shares") registered in the name, or standing to the credit of the Securities Account, of each shareholder of the Company (the "Shareholder") (as the case may be) as at a books closure date to be determined by the Directors (the "Books Closure Date") into one (1) consolidated share (the "Consolidated Share"), fractional entitlements to be disregarded.
2. RATIONALE FOR THE PROPOSED SHARE CONSOLIDATION
The Directors believe that the Proposed Share Consolidation will generally be beneficial to the Company and its Shareholders for the reasons set out below.
(a) Compliance with the Minimum Trading Price requirement. The Monetary Authority of Singapore and the Singapore Exchange Securities Trading Limited (the "SGX-ST") have introduced a minimum trading price of S$0.20 (the "MTP") for Mainboard-listed issuers with effect from 2 March 2015 as a continuing listing requirement to address risks associated with low-priced securities and to improve overall market quality. Issuers will be first assessed for compliance with the MTP requirement 12 months from 2 March 2015 (i.e. as at 1 March 2016). Issuers that fail to fulfil the MTP requirement at the first review date on 1 March 2016 or any of the subsequent quarterly reviews will be placed on the SGX-ST watch-list. The assessment of whether the issuer has met the MTP of S$0.20 will be based on issuers' volume weighted average price ("VWAP") of their shares for the six (6) months preceding the date of review. Issuers placed on the watch-list on or after 1
March 2016 will have a 36-month period to exit from the watch-list. Issuers who fail to exit from the watch-list will be subject to delisting in accordance with the listing rules.
As illustrated in the table below, for the past six (6) months prior to the date of this announcement, the Shares have been trading in a range of between S$0.055 and S$0.081, which is below the MTP. The highest and lowest market prices for each such month and the transacted volume of the Shares traded on the SGX-ST for each
such month, and for the period from 1 March 2015 to 17 March 2015, are as follows:
Highest Price ($) | Lowest Price ($) | Volume of traded Shares ('000) | |
September 2014 | 0.081 | 0.066 | 44,120,000 |
October 2014 | 0.066 | 0.055 | 26,962,000 |
November 2014 | 0.061 | 0.057 | 10,652,000 |
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December 2014 | 0.062 | 0.057 | 40,092,000 |
January 2015 | 0.071 | 0.060 | 51,758,800 |
February 2015 | 0.064 | 0.055 | 49,873,400 |
1 March 2015 to 17 March 2015 | 0.061 | 0.056 | 19,070,700 |
Source: SGX-ST
As such, the Company is seeking to undertake the Proposed Share Consolidation with the purpose of raising the minimum theoretical share price of the Company so as to comply with the MTP requirement.
On the assumption that the Proposed Share Consolidation had been in place for the six (6) months preceding 1 March 2015, the theoretical adjusted 6-month VWAP based on the Consolidated Shares would be S$0.620.
(b) Reduction of magnitude of volatility of the share price. As share trading may involve certain minimum fixed expenses (such as minimum brokerage fees), low traded share prices translate to higher transaction costs, relative to the trading price, for each trading of one (1) board lot of Shares. In addition, the low traded share price may encourage speculation in the Shares, which may result in excessive share price volatility. The Directors therefore believe that the Proposed Share Consolidation may serve to reduce the fluctuation in magnitude of the Company's market capitalisation and reduce the percentage transaction cost for trading in each board lot of Shares.
(c) Increase in the market interest and attractiveness of the Company. The Proposed Share Consolidation will rationalise the share capital of the Company by reducing the number of issued Shares. Following the Proposed Share Consolidation, the Board expects that, all other things being equal, the theoretical trading price and net tangible assets (the "NTA") of each Consolidated Share would be higher than the trading price and NTA of each existing Share, taking into account the decrease in the number of Shares in issue following the Proposed Share Consolidation. The Directors believe that, with the reduction in the number of Shares in issue and the resulting increase in the theoretical trading price of each Consolidated Share, the Proposed Share Consolidation may increase the profile of the Company amongst the institutional investors and the coverage of the Company amongst research houses and fund managers which may, in turn, increase market interest and activity in the Consolidated Shares, and generally make the Consolidated Shares more attractive to investors.
3.1 Under the Proposed Share Consolidation, every ten (10) Shares registered in the name of each Shareholder as at the Books Closure Date will be consolidated into one (1) Consolidated Share. Each Consolidated Share will rank pari passu in all respects with each other. The Consolidated Shares will be traded in board lots of one hundred (100)
Consolidated Shares.
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3.2 Shareholders should note that the number of Consolidated Shares which they will be entitled to pursuant to the Proposed Share Consolidation, based on their holdings of the Shares as at the Books Closure Date, will be rounded down to the nearest whole Consolidated Share and any fractions of a Consolidated Share arising from the Proposed Share Consolidation will be disregarded. All fractional entitlements arising from the implementation of the Proposed Share Consolidation will be dealt with in such manner as the Directors may, in their absolute discretion, deem fit in the interests of the Company. Affected Shareholders will not be paid for any fractions of a Consolidated Share which are disregarded.
3.3 As at the date of this announcement, the Company has an issued ordinary share capital of S$611,329,995 comprising 7,660,198,772 Shares (excluding 15,650,000 treasury shares). Following the completion of the Proposed Share Consolidation, the Company will have an issued share capital of S$611,329,995 divided into approximately 766,019,877 Consolidated Shares (excluding 1,565,000 treasury shares on a post-consolidation basis).
3.4 The Proposed Share Consolidation will have no impact on the issued and paid-up share capital of the Company. The Proposed Share Consolidation will not involve the diminution of any liability in respect of unpaid capital or the payment to any Shareholder of any paid-up capital of the Company, and has no effect on the equity of the Company and its subsidiaries.
3.5 Shareholders are not required to make any payment to the Company in respect of the Proposed Share Consolidation. Shareholders who hold physical share certificates may wish to deposit the same with the Central Depository (Pte) Limited ("CDP") and have their Shares credited to their securities accounts with CDP before the announcement of the Books Closure Date, as CDP will only accept for deposit of new share certificates of Consolidated Shares after the Books Closure Date.
3.6 Subject to Shareholders' approval being obtained for the Proposed Share Consolidation at the annual general meeting ("AGM") to be convened by the Company, Shareholders' holdings of the Consolidated Shares arising from the Proposed Share Consolidation will be ascertained on the Books Closure Date.
3.7 The Proposed Share Consolidation will not cause any changes to the percentage shareholding of each Shareholder in the Company, other than non-material changes due to rounding.
The Proposed Share Consolidation is subject to, inter alia:
(a) the approval of the SGX-ST for the Proposed Share Consolidation and for the dealing in, listing of and quotation for the Consolidated Shares on the SGX-ST; and
(b) the approval of Shareholders by ordinary resolution at an AGM of the Company to be convened.
An application will be made to the SGX-ST for permission for dealing in, listing of and quotation of the Consolidated Shares on the Main Board of the SGX-ST. An appropriate
announcement on the outcome of the application will be made in due course.
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5. DESPATCH OF APPENDIX TO NOTICE OF AGMSubject to the receipt of the approval in principle from the SGX-ST, an appendix to the notice of the AGM, containing, inter alia, further details of the Proposed Share Consolidation will be despatched to Shareholders in due course.
Meanwhile, shareholders and potential investors of the Company are advised to exercise caution when dealing in the Company's securities. When in doubt, shareholders and potential investors are advised to seek independent advice from their bankers, stockbrokers, solicitors or other professional advisers. 6. DIRECTORS' RESPONSIBILITY STATEMENTThe Directors collectively and individually accept full responsibility for the accuracy of the information given in this announcement and confirm after making all reasonable enquiries that, to the best of their knowledge and belief, this announcement constitutes full and true disclosure of all material facts about the Proposed Share Consolidation, the Company and its subsidiaries, and the Directors are not aware of any facts the omission of which would make any statement in this announcement misleading. Where information in the announcement has been extracted from published or otherwise publicly available sources or obtained from a named source, the sole responsibility of the Directors has been to ensure that such information has been accurately and correctly extracted from those sources and/or reproduced in the announcement in its proper form and context.
BY ORDER OF THE BOARD
Lu Ling Ling
Company Secretary
Date: 17 March 2015
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