Addvalue Technologies to receive S$1.5m in investment via bond issuance

ADDVALUE Technologies said on Tuesday night it has entered into an agreement with an investor under which she plans to invest S$1.5 million via a subscription of 1.5 million of exchangeable bonds of S$1 each.

The bonds will be issued by a wholly owned subsidiary, Addvalue Innovation Pte Ltd (AVI), and in the event of a listing on the Catalist board of the Singapore Exchange by AVI's subsidiary Addvalue Solutions (AVS) or an acquisition of AVS, will be exchangeable into new shares in AVS.

The investor, Audrey Hing Zeng Min, is a Singapore resident who is not related to any member of the board of directors or substantial shareholders of the company, said Addvalue.

The bonds have a coupon of five per cent per annum and a term of 18 months from the issue of the bonds. The entire proceeds from the issuance will be used for the working capital of the group.

Addvalue had previously sought to raise funds by proposing to place out up to 250 million new ordinary shares at S$0.04 per share to raise S$10 million with KGI Securities as the placement agent. It later announced on June 19 that it was working with a couple of investors for alternative funding arrangements, which could include them taking up a "significant stake" in the company. As such, it had terminated the placement agreement with KGI.

In May, Addvalue had announced that it is planning to spin off AVS - which undertakes all the business relating to its inter-satellite data relay system - via a distribution-in-specie of a portion of AVS shares currently held by Addvalue to Addvalue's shareholders to rewards them with free AVS shares. The proposed distribution-in-specie to be carried out ahead of the listing is expected to be at least 10 per cent of the company's existing shareholding in AVS.

This would be followed by a listing of the AVS shares on the Catalist board. Hong Leong Finance was appointed as a full sponsor, issue manager and placement agent.

Following this announcement, the company clarified that the proposed spin-off and listing will only be carried out if AVS is valued at least S$70 million. It also said that it plans to retain AVS as an associated company, if not a subsidiary.