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MAINBOARD-LISTED Thakral Corporation and its wholly owned subsidiary, Thakral Capital Holdings (TCH), on Thursday entered into a share sale agreement to acquire 49 per cent of Thakral Capital Australia (TCAP)'s share capital from four vendors.
TCAP is Thakral's real estate investment subsidiary. Currently, Thakral owns 51 per cent of TCAP's share capital.
In consideration for the proposed acquisition, TCH will allot and issue an aggregate of 250,000 new ordinary shares in its capital at an issue price of S$80.80 per share to the vendors: J&H Singh Pty Ltd, Aljen Pty Ltd, Australian Forestry Investments Pty Ltd and GMC Investments (Aust) Pty Limited.
As at Thursday, Thakral owns one share of TCH. Before the completion of the share sale agreement, Thakral intends to increase its shareholding to 749,999 TCH shares. Upon completion of the share sale agreement and taking into account the TCH capital increase, Thakral's shareholding interest in TCH will be diluted by up to 25 per cent, based on TCH's enlarged share capital.
The proposed acquisition results in the merger of TCAP into TCH, which has the benefit of consolidating and providing greater visibility to shareholders of the Thakral's investment division's business and TCAP's business.
By removing the minority interest of the vendors in TCAP, and merging TCAP into TCH, the risk of conflicts and allocation of revenue is removed.
The merger also strengthens the balance sheet of Thakral's investment division as a whole and is expected to the enhance the value of the merged entity in the future.
Thakral is also proposing the adoption of the Thakral Capital Holdings Employee Share Option Scheme (TCH ESOS).
The proposed acquisition, proposed dilution and proposed adoption are all contingent upon shareholder approval.
On Thursday, Thakral's counter closed up 9.09 per cent at S$0.024.