It announced its proposed issue (the "RCPS Issue") of 66.668m new redeemable convertible cumulative shares (the "RCPS") at a subscription price of $0.60 for each RCPS. This represents 28.5% of the Company?s existing issued share capital and 22.2% of the enlarged share capital if fully converted.

The Company expects to raise net proceeds of approximately $38.0m. ($40m gross proceeds) for the expansion of its production capacity and distribution network in China , as well as for working capital purposes.

The RCPS are convertible at a conversion ratio of 1 RCPS to 1 Ordinary Share anytime before the Maturity Date in 2011, subject to adjustments in the event of, amongst other things, the Company not attaining the target net profit before tax of RMB120m for financial year 2009. RCPS holders can redeem at 100% of the subscription price of $0.60 beginning four years from the Issue Date and before the Maturity Date.

At the maturity date, all RCPS outstanding shall be automatically redeemed by the Company at a redemption price of 130% of the Subscription Price. 

 A gross preference dividend of 5% of the subscription price, i.e. $0.03 per RCPS, will be payable to RCPS holders annually.

Investment merits of the RCPS Issue:-

• Attractive dividend yield of 5% per annum.
• Generous redemption premium of 30% above the subscription price of $0.60 upon maturity date ? protects against share price downside risk.
• Total return of 55% if RCPS is held to maturity, giving a yield of 9.8% p.a.
• Flexibility to convert RCPS into ordinary shares at anytime during the five-year period ? allows RCPS holders to take advantage of rising share price.
• Option to redeem 100% of the subscription price of $0.60 from the beginning of the 4th year.
• The conversion ratio of 1 RCPS to 1 ordinary share will be adjusted if the company underperforms its earnings target of RMB120m PBT for FY2009.
• A listing application will be submitted to the SGX for the listing of the RCPS, the RCPS will be tradable on the SGX once approval obtained.
• Investors may use their CPF to purchase the RCPS under the CPF Investment Scheme once approval obtained from the CPF Board.