Capital Group to subscribe to Rickmers Maritime rights issue
Rickmers Trust Management Pte. Ltd., as trustee- manager of Rickmers Maritime, announces that in a showing of strong support for its 1-for-1 renounceable rights issue, Capital Research and Management Company (as investment adviser to American Funds In surance Series – Global Growth and Income Fund), an affiliate of The Capital Group Com panies, Inc. (collectively the “Capital Group”), has provided an undertaking to subscribe a nd pay, in full, for such number of rights units to maintain its current unitholding percentag e level of approximately 6.47%, after the rights issue, said in the company's press release.
Mr Thomas Preben Hansen, Chief Executive Officer of RM commented, “It is very encouraging to have our announced rights issue endo rsed, this early in the process, by one of the world’s largest and most sophisticate d investment managers; the Capital Group. Our objective with this transaction is to strengthen our balance sheet whilst maintaining our regular distributions to uni tholders.”
Strong support The Sponsor of RM has, through its subsidiaries, provided undertakin gs to subscribe and pay, in full, for such number of rights units to ma intain its current unitholding percentage 1 Rickmers Group, through its subsidiaries Polaris Shipmanagement Company Limited and Rickmers Second Invest GmbH, who respectively own approximately 15. 62% and 17.48% of the issued units of RM. level. Furthermore, the Independent Directors, Mr Lim How Teck and Mrs Lee Suet Fern, have each provided an undertaking that they will su bscribe and pay, in full, for their pro-rata entitlements.
Together, with the new undertaking from the Capital Group, the collective support for the rights issue stands at approximatel y 39.92%. The rights issue On 19 March 2013, RM announced the launch of a reno unceable rights issue to raise gross proceeds of up to approximately S$101.7 million (US $81.5 million). The rights issue will be offered on a 1-for-1 basis at an issue price of S$0.240 per unit. This represents a discount of 33.3% to the closing price of S$0.360 per unit on the Singapore Exchange Securities Trading Limited on 18 March 2013. In connection with the rights issue, RM has secured an extension to its current VTL covenant waiver until December 2014.
The rights issue will allow RM to accelerate repayment of loans, putting it in a stronger financ ial position to take advantage of a recovery in the market. Following the rights issue, RM intends to maintain the quarterly DPU at 0.6 US cents for the financial year ending 31 December 2013 (“FY2013”). Based on the closing price of S$0.360, assuming that the rights issue is fully subscribed and a unitholder takes up his full entitlement at the rights issue price whilst receiv ing his quarterly DPU of 0.60 US cents, he would receive an improved DPU yield of approximatel y 10.0% for FY2013 over the theoretical ex-rights price (the “TERP”).