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Ayondo completes disposal of unit Ayondo Markets Limited

CATALIST-LISTED Ayondo has completed the disposal of its entire stake in Ayondo Markets Limited (AML), the fintech firm announced on Thursday.

It added that all conditions precedent to the proposed disposal have been fulfilled and/or waived. Therefore, the disposal was completed on June 5, and AML will cease to be an indirect subsidiary of the company.

On May 8, Ayondo announced that it planned to sell AML for £5.7 million (S$10.2 million) to Netherlands-registered BUX Holdings, a white-label partner of the trading platform developer. Ayondo is seeking to reduce its liabilities through the sale.

The loss-making firm has also faced intense scrutiny over its financial sustainability, and the fulfilment of certain regulatory requirements regarding the AML sale.

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In April this year, the Singapore Exchange (SGX) Regco instructed Ayondo to put on hold its planned sale of AML, pending clarity over the group's financial situation, as well as AML's compliance with UK capital requirements.

Ayondo noted that it has engaged with the Financial Conduct Authority of the United Kingdom (FCA) regarding this compliance, and that SGX Regco is informed of these engagements. SGX Regco has since indicated it is satisfied that such compliance has been met, following disclosures provided by the company in a circular dated May 19. 

In May this year, Ayondo’s independent auditor Ernst & Young (EY) also issued a disclaimer of opinion on the firm’s financial statements for the financial year 2018. Among other things, EY explained that it has not been able to obtain sufficient and appropriate audit evidence to conclude whether or not it was correct for Ayondo to use the assumption of a going concern in preparing the statements.

EY noted that Ayondo's current liabilities and total liabilities exceeded its current assets and total assets by 8.258 million Swiss francs (S$11.337 million) and 8.279 million francs respectively as at Dec 31, 2018. In addition, Ayondo had posted a net loss of 50.24 million francs, and had a negative operating cash flow of 5.95 million francs for FY2018. 

Ayondo stated at the time that it should be able to successfully divest a 99.91 per cent stake in AML, given that it has already secured irrevocable undertakings from shareholders who hold an aggregate of 55.49 per cent of the total number of issued shares of the company to vote in favour of the proposed disposal.

At an extraordinary general meeting conducted on June 3, Ayondo shareholders voted to divest the firm’s stake in AML. According to a regulatory filing, some 135.9 million votes were cast in favour of the disposal, representing nearly 100 per cent of the total number of shares cast in the vote.

In response to queries by The Business Times on Thursday, SGX noted that "in compliance with SGX RegCo's directions, Ayondo has obtained shareholder approval and satisfied other conditions precedent for the completion of the sale of AML". 

"Ayondo shares will remain suspended until the company is able to address the going concern and business viability issues," SGX said. 

Shares in Ayondo have been suspended since Feb 1, and last traded at 4.8 Singapore cents, down 1.2 cents or 20 per cent.