TEE International has entered into a conditional subscription agreement with Meta5 to issue new shares in the company worth S$7.5 million.

Meta5 will also subscribe S$7.5 million of unlisted and non-transferable share options in the company. Each option carries the right to subscribe for a new ordinary share in the company, the mechanical and electrical services group said in a bourse filing on Thursday (Aug 18).

Tee International is also proposing a rights issue to raise S$3.5 million, bringing the total amount the company plans to raise to S$18.5 million.

This follows its announcement this month that earlier plans to raise up to S$14 million through new share subscription and issue had fallen through after its 2 investors decided not to proceed with the proposed transactions.

Proceeds from the subscription will be used to repay eligible creditors; they will also be used as working capital, and to fund the growth of the company’s business.

Upon completion, the new subscription shares are expected to represent around 52 per cent of the enlarged share capital of the company.

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Meta5’s principal activity is that of a holding company. Its shareholders include Zheng Le, an entrepreneur in the entertainment, media and esports industry, and Tan Fuh Gih, who has previously invested in the offshore marine, energy and real estate sectors.

Tee International is also considering a debt-restructuring exercise, and proposing to issue new shares to its key management team as well as RSM Corporate Advisory. RSM was engaged in 2021 to review its businesses and improve its financial position and performance.

Of its enlarged share capital, Tee International is planning to issue not more than 3.5 per cent to its key management team, and not more than 7 per cent to RSM.

The company has undertaken to pursue the rights issue within 3 months from the completion of the above proposed transactions.

Tee International said it will provide more details in due course, after the terms of the proposed debt restructuring are finalised. This includes details on the subscription price, issue size, the share issuance to its management and RSM, and the financial effects of the proposed transactions.

Trading in Tee International’s shares has been suspended since June 2021.