Hitchins sells stake to Mid-East property firm

Sep 21, 2006
The Straits Times

A MIDDLE EAST real estate developer is poised to snap up a 60 per cent stake in Sesdaq-listed Hitchins Group in a share placement deal worth $12 million.

Hitchins announced yesterday that 120 million new shares will be sold to Dubai-based M.E. Development at five cents apiece, a transaction worth $6 million.

This is at a sharp 65.5 per cent discount to the last traded price of 14.5 cents for Hitchins, which makes and sells waterproofing and concrete protection material for the construction sector.

M.E. Development, which has ongoing projects with a completion value in excess of US$500 million (S$800 million), will be granted an option to subscribe for a further 120 million new shares at five cents apiece.

There will also be a placement of 20 million new shares at five cents apiece to investors who will be sought by a placement agent. Hitchins is in for a name change - to either M.E.D Singapore or another title agreed to by both parties.

It will also carry out a rights issue - one new share will be issued at five cents each for every two Hitchins shares held by investors. Up to 126.6 million new shares will be issued.

If the entire exercise is successfully carried out, it will raise in excess of $19 million for Hitchins and result in M.E. Development owning 60 per cent of the company.

M. E. Development will help Hitchins, which has suffered losses in the past three years, seek opportunities in the booming property development industry in the Middle East.