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Singapore’s Big Loser for the Week

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As of Thursday’s close, printing outfit Xpress Holdings (SGX: I04) has shed 9.5% to S$0.019 since last Friday. This compares against a 1.3% gain for the Straits Times Index (SGX: ^STI) in the same period and thus makes Xpress Holdings one of the bigger losers in Singapore’s share market for the week.

The firm, formed in 1986 and listed in 1999, offers a whole suite of print management services that include conceptualisation, design, copywriting, translating, typesetting, and colour proofing. The company also does printing, post-press packaging, and global distribution and delivery.

Xpress Holdings’ share price decline occurred after it announced on Thursday afternoon that a number of its creditors have commenced legal proceedings against the company and its subsidiary, Xpress Print Pte Ltd. The total sum involved is to the tune of S$4 million, according to local newswire The Straits Times. For some perspective, as of 30 April 2014, Xpress Holdings had S$2.54 million in total borrowings and S$4.72 million of cash on hand.

The company has appointed Stone Forest Corporate Advisory Pte Ltd as a financial consultant. Stone Forest would be helping Xpress Holdings in the company’s discussions with its creditors to come up with a settlement plan.

To repay the creditors and to pay for daily operations, the company had agreed a private placement deal on Tuesday. It would see two subscribers – Strong Core Global Limited and Ma Jing – buying up a total of 480 million new shares of Xpress Holdings at S$0.021 each. Each investor would be buying 240 million shares. Xpress Holdings would raise around S$9.48 million in net proceeds from the placement; 55% of the capital raised would go toward repaying the creditors while the rest will be used for general working capital purposes. Teranova Group Limited, which introduced the two subscribers to the company, will receive S$504,000 as an arrangement fee.

Again for some perspective, Xpress Holdings had 2.448 billion shares outstanding as of 30 April 2014. Assuming no chance in the company’s share count since then, the private placement actually represents a significant dilution of close to 20% of existing shareholders’ stakes in the company.

Xpress Holdings is trading at 31 times its historical earnings as of Thursday’s close.

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The information provided is for general information purposes only and is not intended to be personalised investment or financial advice. Motley Fool Singapore contributor Sudhan P doesn’t own shares in any companies mentioned.