CATALIST-LISTED Viking Offshore and Marine : 1Y1 0% is proposing to change its name amid plans to diversify its business into supply chain management and lifestyle retail.

It is also proposing a rights cum warrants issue, as well as a share placement, to raise funds to strengthen its financial position and expand its capital base, the company said in a bourse filing on Monday (Mar 28).

The company is planning to diversify its business to increase business opportunities, although it will continue its existing businesses in offshore and marine services and asset chartering services so long as its continuity is in its best interest.

This comes as the company faced "multifaceted challenges" due to its restructuring efforts, the Covid-19 pandemic situation, and the challenging business environment and a continued laggard in the offshore and marine industry, it said.

For supply chain management, Viking plans to engage with technologies in artificial intelligence and digitalisation, and is currently discussing with suppliers and distributors to customise such technologies for the group's expanded offerings in its existing industries and other applicable industries. To undertake these offerings, it has also incorporated a wholly-owned subsidiary, Diverse Supply Chain, in Malaysia.

For lifestyle retail, Viking is looking into the family entertainment space and a lifestyle convenience store business, as it sees potential demand once governmental measures are increasingly relaxed and consumers adapt to post Covid-19 norms.

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To reflect its new business, Viking is proposing to change its name to "9R Limited", intended to be an abbreviation of the company's new inspirations which potentially include, "rebuild, reborn, restore, recreate, revamp, reform, revive, remedy and recast", it said.

Viking is also proposing a renounceable non-underwritten rights cum warrants issue to raise net proceeds of up to S$3.3 million. Assuming all warrants are exercised, the company will raise gross proceeds of S$11.3 million.

Net proceeds of the issue will be used by Viking to repay its existing loans and also to fund its general working capital requirements.

It plans to issue up to 140.6 million new rights shares at S$0.025 each, with up to 281.1 million free detachable and transferable warrants with an exercise price of S$0.04 each.

The rights share issue price represents a discount of 74.5 per cent to the counter's closing price on Mar 24, which was the last full market day on which the shares were traded prior to announcement, and a discount of 70 per cent to the theoretical ex-rights price based on the last-traded price.

Viking noted that the rights and warrants issue will provide shareholders with an opportunity to maintain their equity participation in the company, while improving the company's financial position.

Meanwhile, the exercise price of the warrant shares represent a discount of 59.2 per cent to the last-traded price, and a discount of 52 per cent to the theoretical ex-rights price.

Under the proposed issue, eligible shareholders will be allotted 1 rights share for every 4 existing shares held as at the record date, and 2 warrants for every rights share subscribed.

On top of the rights and warrants issue, Viking is proposing a placement of up to 300 million new shares at S$0.05 each.

It plans to raise net proceeds of up to S$14.4 million, which will be used to fund Viking's proposed diversification as well as general working capital requirements.

The placement price represents a discount of 49 per cent to the volume-weighted average price of S$0.098 for trades done on Mar 24.

In addition, Viking is also proposing the disposal of its entire shareholding interest in its wholly-owned subsidiaries Viking Airtech and Viking HVAC for S$50,000.

The move will allow Viking to exit from a loss-making business segment, and is also expected to free up the cash flows as the subsidiaries will continue to be loss making, the company said.

Viking noted that the subsidiaries would have posted a cumulative net loss before income tax, non-controlling interests and extraordinary items of S$1.4 million for FY2021, excluding the effects of one-off gains of S$3.3 million, due to the intercompany adjustments made.

The buyer is Acapella Energy, which is held solely by Viking's executive director and chief executive Ng Yeau Chong.

The subsidiaries are involved in the designing, package engineering, sales, servicing, installation and commissioning of all kinds of heating, ventilation and air-conditioning systems for the marine and offshore industry. Ng is the sole director of Airtech and HVAC.

The above proposals are subject to the approval of Viking's shareholders at an extraordinary general meeting to be convened by the company.

Shares of Viking Offshore and Marine closed at S$0.088 on Monday, down S$0.01 or 10.2 per cent.

READ MORE:

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