Addvalue seeks to issue over 1 billion new shares at S$0.0127 each to raise S$13.2 million

MOBILE satellite communications company Addvalue Technologies on Sunday (Dec 5) announced that it has secured funding for up to S$13.2 million from investors led by privately owned investment and development firm Economic Development Innovations Singapore (EDIS).

Other investors include certain creditors and staff of Addvalue as well as all the directors of the company.

First, Addvalue will issue up to 449.2 million new shares to the investors at the subscription price of S$0.0127 each.

This represents a discount of about 3.8 per cent to the weighted average share price of the company of S$0.0132 as at Nov 26 - the last full market day prior to the date on which the relevant subscription agreements were entered into and on which trades were recorded.

Addvalue will also seek shareholder approval, at an extraordinary general meeting (EGM) to be convened, to issue another 594.1 million new shares to the investors at the same price.

In total, over 1 billion new shares will be issued through the 2 tranches, which will result in a 46.4 per cent increase in the total number of Addvalue's outstanding shares.

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If both tranches are completed, EDIS will become a substantial shareholder of the company with a shareholding interest of 11.96 per cent.

Alan Wang Yu Huei, a key creditor of the group, will also become a substantial shareholder of the company, holding a shareholding interest of 5.08 per cent at the completion of both tranches.

Meanwhile, the rest of Addvalue shareholders who are not investors in this funding exercise will see their combined shareholding interest drop from 89.79 per cent to 61.34 per cent.

Addvalue said net proceeds of approximately S$12.6 million from the funding will be used for the repayment of borrowings, payment of payables as well as for the group's working capital and business expansion.

"We are indeed honoured to have EDIS as the lead Investor and are appreciative of the support received from the rest of the Investors in putting together the funding arrangements within a span of a week. The funding ensures that adequate cash is made available to meet the needs of the group in terms of its working capital and its intended business expansion and growth," said Colin Chan Kum Lok, chairman and CEO of Addvalue.

In anticipation of its initial investment, EDIS has nominated Certis Cisco senior adviser Chua Chwee Koh for appointment as a non-independent and non-executive director to Addvalue's board.