Best World to invest in A*Star startup with an eye on stem cell-based products

Singapore

BEST World International is investing in A*Star spinoff Celligenics as it seeks to leverage on synergies with its own business in the health and wellness sector.

In a filing with the Singapore Exchange on Monday, 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 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 that will raise its stake to as much as 15 per cent.

Singapore-headquartered 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.

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. Celligenics is expected to benefit from Best World's sales network and management resources to garner market access and reap greater operational efficiency.

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

"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," Best World said.

"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."

Shares in Best World closed at S$2.76 on Monday, up 12 cents.