Grand Venture Technology inks pact for proposed S$23.6m placement, Companies & Markets

Wed, Jan 13, 2021 – 9:28 AM

GRAND Venture Technology on Tuesday said it has entered into a conditional placement agreement to raise some S$23.6 million. The Catalist-listed manufacturing service provider is proposing to issue 71.5 million new shares in the company at S$0.33 apiece.

The agreement was entered into with placee NT SPV 12, a wholly-owned subsidiary of private equity fund, Novo Tellus PE Fund 2.

The placement shares, when allotted and issued, will represent about 23.4 per cent of the firm’s enlarged share capital, resulting in a transfer of controlling interest.

Novo Tellus PE Fund 2 makes private equity investments in the technology and industrials sector of South-east Asia, with a focus on mid-market companies, Grand Venture said.

The issue price of S$0.33 represents about an 18 per cent discount to the volume-weighted average price of S$0.40 per share based on trades done on Jan 11, being the last full market day before the placement agreement was signed.

Net proceeds from the placement after deducting estimated fees and expenses is about S$23.5 million.

The company intends to use 81 per cent, or the bulk of this for expansion via mergers and acquisitions. About S$3 million or 13 per cent of the proceeds will be used for investing and enhancing operational and engineering capabilities, while the remainder will be used for general working capital.

Completion of the proposed placement is conditional upon the approval of shareholders at an extraordinary general meeting to be convened, and the listing and quotation notice from the Singapore Exchange, among other things.

In connection with the placement, the placee shall be entitled to nominate one director for appointment to Grand Venture’s board, the company said.

Separately, Grand Venture’s controlling shareholder Metalbank Singapore, has also entered into a conditional sale and purchase agreement (SPA) to sell some 19 million shares to the placee at S$0.33 per share for about S$6.3 million.

Metalbank Singapore holds a 57 per cent stake in Grand Venture and the sale shares represent about 8.1 per cent of the firm’s existing share capital.

Completion of this SPA is conditional upon completion of the placement agreement with the fund.

Taken together, the placement shares and the sale shares will represent about 29.6 per cent of the firm’s enlarged share capital.

The placement is deemed to be an interested person transaction, and consideration for the placement shares represents about 80.1 per cent of the group’s latest audited net tangible assets value of S$29.5 million as at Dec 31, 2019, Grand Venture said.

Following this announcement, the company on Tuesday night requested the lifting of a trading halt it called for earlier in the day before the market open.

As at 9.10am on Wednesday, Grand Venture shares were trading at S$0.46, up S$0.07 or 18 per cent.

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