Electronics group Elec & Eltek International Holdings is to reduce its interest in a Singapore-listed subsidiary in an effort to raise US$56.3 million to lower bank borrowings.
The group said it was to place 11.26 million shares in Elec & Eltek International Co at US$5 a share through Cazenove.
After the placing the group's interest in the Singapore-listed entity would be cut from 52.7 per cent to 42.33 per cent.
The placing price represented a 7.4 per cent discount to the US$5.40 close last Thursday.
The group said that of the US$55 million in net proceeds to be raised from the placing, US$26 million would be used to reduce its bank borrowings.
The remaining US$29 million would be used as additional working capital for the group's operations, in particular the liquid crystal display plant that has just been established in Huangpu, Guangdong.
According to its latest annual report, the group had bank borrowings amounting to HK$232.37 million until the end of June, of which HK$162 million would mature within one year.