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Ace Achieve to buy 36% of blockchain business for S$1.9m, borrow S$500,000 to finish audit
ACE Achieve Infocom plans to acquire a 36 per cent stake in a blockchain online trading and payment solutions business for S$1.9 million, according to filings with the Singapore Exchange late Wednesday.
The Beijing-headquartered telecommunications company is also taking a concurrent S$500,000 loan from the seller of that stake to fund the cost and expenses required to complete its audit for financial year 2018 and convene the annual general meeting for FY2018.
Ace Achieve has entered into a memorandum of understanding to buy the stake in GT Dollar Pte Ltd, which offers and operates online trading and payment solutions that adopt blockchain technology, amongst others. Currently, the firm does not require any licence or regulatory approval to operate its business.
The purchase may be funded by issuing new Ace Achieve shares at S$0.0045, or a mix of cash and new shares at the same price. Ace Achieve shares were trading at S$0.008 before trading was halted on Monday pending the announcement.
The seller of the GT Dollar stake is businessman Zhang Bauluo, who directly owns 70 per cent of GT Dollar and is deemed interested in the remaining 30 per cent. Mr Zhang is one of two directors of GT Dollar.
Mr Zhang, through lending vehicle China Tian Ma Travel Group, has also agreed to loan S$500,000 to Ace Achieve. The loan is interest free for the first three months upon drawdown, but will bear a 5 per cent interest thereafter. The loan will mature six months after drawdown.
The loan is secured by a share charge by Ace Achieve chairman and chief executive Deng Zelin and his investment vehicles. Together, the chargors hold about 29.98 per cent of Ace Achieve's shares, which will give Mr Zhang a deemed interest in all of those shares.
The acquisition will require shareholders' approval.
Ace Achieve described the acquisition as a "strategic diversification" into a growth market. Mr Zhang's willingness to procure the loan for the company was also considered very positively by the board, Ace Achieve said.
The loan will allow the company to make payments to complete the company's audit and to convene its shareholders' meeting thereafter, the company said. Ace Achieve is looking to announce its FY2018 results by end-November. The company also expects to complete the audit for FY2018 by end-January 2019 and to hold its shareholders' meeting by end-February 2019.
Two of the company's three independent directors had quit in August, citing delays in the company’s annual audit and a lack of information from management.