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Hot stock: Artivision shares surge on news of potential reverse takeover

SHARES of Artivision Technologies Limited surged on active trade on Wednesday following news of a proposed acquisition that may lead to a reverse takeover of the group.

At 9.39am, the stock was the most active counter on the Singapore bourse with 37.49 million shares changing hands, jumping by 11.8 per cent to 1.9 Singapore cents.

On Tuesday, Catalist-listed Artivision said that it has signed a conditional and non-binding heads of agreement (HOA) to acquire Mobile Credit Payment (MC Payment) Pte Ltd.

It will acquire MC Payment's entire issued and paid-up share capital and convertible bonds from its shareholders and bondholders for no less than S$80 million.

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The convertible bonds of MC Payment consist of Series B bonds and Series C bonds with an aggregate principal value of S$5.5 million with accrued and outstanding interest.

Besides the base consideration of S$80 million, Artivision will also offer an additional consideration equal to the amount raised by MC Payment under its own fundraising activities of at least S$64 million. Investors under these fundraising activities shall agree to sell their shares or convertible securities in MC Payment to Artivision.

The total consideration will be fully satisfied by Artivision via the issuance of new shares at an issue price of S$0.014 on a pre-consolidation basis.

To reduce the outstanding debt and possible dilution to MC Payment's shareholders and bondholders, Artivision's controlling shareholder Ching Chiat Kwong has agreed to acquire all of Artivision's outstanding bonds and options from their respective holders, and to redeem all of these bonds and cancel these options.

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