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VGO Corp plans to issue 1.2 billion new shares in a reverse takeover that will give the property development arm of Malaysian conglomerate Hatten Group a backdoor listing in Singapore.
VGO will issue the shares, which will represent about 92.8 per cent of VGO's post-enlargement issued share capital, to brothers Colin and Edwin Tan in exchange for full ownership of Sky Win Management Consultancy, Hatten's property development arm. Hatten is a conglomerate owned by the Tan brothers with businesses in real estate, hospitality and education.
The consideration values the deal at S$386 million, representing an issue price of 32.5 Singapore cents apiece for the consideration shares.
As a condition for the deal, VGO will also seek existing shareholders' approval to reduce its share capital by S$27.9 million to write off the same amount of accumulated losses, leaving a paid-up share capital of just S$4,000.
Following the reverse takeover, VGO will undertake an additional placement of 123.1 million new shares and 49.3 million shares by the Tan brothers to bring its public float in compliance with listing rules. The Tan brothers' stake following the compliance placement will be 81.1 per cent.
VGO will also seek to change its name to Hatten Land and to move to the junior Catalist board from the Main board.
An extraordinary general meeting has been scheduled for Jan 20. Along with the deal components that require shareholder approval, the company will also be seeking a whitewash to exempt the Tan brothers from having to make a general offer for the company.