Artivision Technologies enters into reverse takeover to acquire MC Payment
Singapore
VIDEO solutions provider Artivision Technologies is entering into a reverse takeover deal to give up a 70 per cent stake in the company in exchange for e-payment and online retail business, Mobile Credit Payment (MC Payment).
The total consideration includes a base consideration of up to S$80 million for the sale shares held by shareholders of MC Payment; an additional consideration of up to S$20 million; and up to S$25 million in respect to the acquisition of iFashion Group - an online fashion platform that MC Payment is taking over.
Artivision has also proposed to undertake a share consolidation to convert every 20 existing shares into one share. The deal will be funded via the allotment of up to 446.4 million new consolidated shares at a post-share consolidation issue price of S$0.28 apiece (or S$0.014 apiece on a pre-share consolidation basis).
Separately, Artivision's controlling shareholder, Ching Chiat Kwong has agreed to acquire the firm's outstanding convertible bonds and options. Artivision will in turn issue 100 million new consolidated shares at an issue price of S$0.10 apiece, raising S$10 million. As at May 2, Mr Ching, who is also boss of Oxley Holdings, has a 22 per cent stake in Artivision. He will own 18.7 per cent of the firm's enlarged share capital upon completion of the proposed acquisition.
In an exchange filing on Wednesday, Artivision also said it has been exploring business opportunities since disposing of its subsidiary Artimedia Group last year. The search for business opportunities became a priority with the firm's decision not to renew its subsidiary, Colibri Assembly Thailand's (CAT) agreement with its only contract manufacturing customer.
With effect from Feb 27, 2018, CAT ceased its operations, and Artivision, without any operating businesses, became a cash company. To remain listed, Artivision has 12 months from Feb 27 to secure a new business. Therefore, the proposed acquisition presents an opportunity to acquire a new business, meet the Catalist ruling, and enhance shareholder value, Artivision said.
The board also believes that MC Payment is "well positioned to capitalise on Singapore's recent push towards cashless payments". Among other things, the deal is subject to shareholders' approval, and an independent valuation report expressing that the target group's value is equal to, or more than S$80 million.
For the financial year ended Dec 31, 2017, the target group posted a net loss before tax of about S$3.9 million, and net tangible liabilities of S$29.4 million. Artivision's shares closed unchanged at 1.4 Singapore cents on Thursday.
