SINGAPORE -- The board of directors of Inno-Pacific Holdings Ltd. announced May 21 that the Singapore Exchange Securities Trading Limited (SGX-ST) approved in principle its application to sell 62.5 million new ordinary shares of stock for S 1 cent each (about half a cent U.S.) The announcement was released to the SGX-ST by Inno-Pacific secretary Lee Koh Sing.
Inno-Pacific wants to sell the stock to generate operating capital and help its subsidiaries pay creditors.
According to an Ernst & Young audit published on the SGX-ST Web site on May 15, Inno-Pacific's subsidiaries face liquidation due to their inability to pay creditors.
Shakey's, Inc., the Garden Grove, Calif.-based franchisor of Shakey's Pizza, is one Inno-Pacific subsidiary. Published reports about the company and two lawsuits brought against it by two franchisees say Shakey's is not only behind on payments to its creditors, but could face bankruptcy should it lose in court and have to pay damages.
In the suits Shakey's is charged with fraud, breach of contract and negligent misrepresenation. The franchisees are seeking as much as $6 million in damages.
Should all the shares sell, Inno-Pacific's board said it intends to use the net proceeds (approximately S $3.7 million [U.S. $2 million]) to: cover 12 months' overhead for Inno-Pacific (approximately S $1.7 million [U.S. $935,000]); pay other creditors (approximately S $1 million [U.S. $550,000]); develop its subsidiaries' telecommunication business (approximately S $300,000 [U.S. $165,000]); provide working capital for Shakey's, Inc. (approximately S $700,000 [U.S. $385,000]).
With final approval, the stock may be offered by June.