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MEMSTAR Technology has requested to convert its trading halt announced on Monday to a voluntary suspension with immediate effect pending negotiation on revising key terms of a proposed reverse takeover of Longmen Group.
In a statement to the Singapore Exchange on Thursday, Memstar said discussions were preliminary at this stage and advised shareholders that there was no certainty that the parties would be able to reach an agreement.
The membrane manufacturer had proposed to acquire all of Longmen Group, a natural gas developer, for US$420 million in an all-share deal last December. It has since signed three supplemental agreements between February and July this year on the proposed deal.
Memstar said following the third supplemental sale and purchase agreement, Longmen Group was required to procure the fourth tranche of fundraising for working capital requirement.
However, due to fundraising challenges, Longmen Group has informed the firm that it intends to temporarily suspend the proposed acquisition, said Memstar.