Best World in share subscription pact with A*star biomedical spin-off Celligenics

BEST World International is investing in A*Star spin-off Celligenics through a share subscription that will see it taking up at least a 12.5 per cent stake in the biomedical startup.

In a filing with the Singapore Exchange early Monday morning, it said that it had entered into a share subscription agreement (SSA) with Celligenics. In the first phase, Best World or a wholly owned subsidiary will invest around S$5.63 million to subscribe for 115,165 new ordinary shares representing 12.5 per cent of the total number of issued shares in Celligenics on a fully diluted basis. 

Under the second phase, Best World will have the right - but not the obligation - after 18 months from the first completion date to subscribe for new shares such that the group will hold up to a 15 per cent stake. Singapore-headquarted Celligenics is in the early stages of stem-cell research and development, and has research and development collaborations with a local scientific institution and institute of higher learning.

The issued and paid-up share capital of Celligenics as at Jan 14, 2019 is S$805,000 comprising 805,000 shares. Based on Celligenics' latest audited accounts for the financial year ended Dec 31, 2017, its net liabilities as this date is about S$349,000. As at Jan 14, Huang Ban Chin, an executive director and the chief operating officer of Best World, holds a 17 per cent equity interest in Celligenics. The first phase of the subscription will be funded by the group's internal resources.

The deal is contingent on certain conditions, and the SSA will lapse if these conditions are not met on or before Feb 28, 2019.

Best World said: "Under the terms of the SSA, save for the first phase subscription, there is no firm commitment or agreement on the part of the group to provide any subsequent funding to Celligenics. If the business of Celligenics scales up in the future, depending on the business needs of Celligenics, the group may decide to proceed with the second phase investment or provide further funding on terms to be agreed by the group."

Explaining the rationale behind the investment, Best World highlighted that the business is synergistic with its current business in the health and wellness industry. In addition, the two parties intend to collaborate to develop the next generation of cutting-edge stem cell-based products focused on the healthcare and wellness industry categories.