By Lee Su Shyan

RAFFLES Education is selling as many as 160 million new shares in a bid to raise some $99.6 million.

In an announcement to the Singapore Exchange yesterday, the education player said that it plans to place out new shares to institutional investors.

The shares rose 3.5 cents yesterday to close at 68.5 cents with 28.2 million shares traded.

Based on yesterday's price, selling 160 million shares will bring in about $109 million.

However, the issue price of the new shares has yet to be fixed. Raffles Education said yesterday that the issue price will be determined by the placement agents - Credit Suisse and Nomura Singapore.

The new shares will not be priced at a discount of more than 10 per cent to the price the shares were trading at just before the placement agreement was signed.

Based on an indicative price of 63 cents, around $99.6 million in net proceeds will be raised, after expenses of about $1.2 million are deducted.

About $60 million of the proceeds will be used to repay part of the outstanding purchase price for Oriental University City Development in Langfang city, Hebei province in China. Some will be used for working capital purposes.

Raffles Education becomes the latest company to take advantage of the recent market rally to place out shares to raise funds.

Since the start of the year, its shares have risen 21 per cent. Since the March lows, its shares have more than doubled from the 31.5 cents seen then.

For its third quarter ended March 31, Raffles Education went into the red because of the provision for losses on its investment in its associate. A special check on Oriental Century's books found that its accounting records had been falsified.

This article was first published in The Straits Times.