Malaga-based Advanced Engine Components Ltd has announced plans to raise $2.3 million through a non-renounceable rights issue to provide the company with additional working capital.
The shares, to be issued on a one for nine basis, will be held at an issue price of 16 cents, with and additional option distributed for every two shares subscribed under the rights issue.
The issue will be underwritten to $2.25 million by major shareholder 698 Capital International Ltd, a group to which AEC aims to reduce its loan committments.
AEC directors Thomas Liu and William Lee previously served as managing director and chief financial officer respectively of 698.
Both now are employed by CDIB Capital Ltd, a subsidiary of China Development Industrial Bank in Taiwan.
The full text of an AEC announcement is pasted below
Advanced Engine Components Limited ("ACE" or "the Company") is pleased to announce a proposed prorata non-renounceable rights issue (Rights Issue) to raise approximately $2.29 million before costs. The Rights Issue will offer one new share for every nine shares held at an issue price of $0.16 per new share to all shareholders registered in Australia and New Zealand.
In addition, one free attaching option will be issued for every two shares subscribed under the Rights Issue. The options will be exercisable at 12.8 cents each on or before 30 November 2009. The options will be unlisted.
Full details will be provided in the Rights Issue prospectus and personalised Entitlement and Acceptance Form to be despatched to all eligible shareholders registered at the record date which will be on or about 26 October 2007.
The Rights Issue will be underwritten to $2.25 million by the Company's major shareholder, 698 Capital International Ltd (or related body corporate).
The funds raised will be used by the Company to provide working capital support for its ongoing sales commitments as well as reducing loan commitments to 698 Capital Asia Pacific Ltd.
The Rights Issue provides an opportunity for participation by all eligible shareholders. The underwriting commitment ensures the success of the Rights Issue and illustrates the continuous support of the major shareholder.
