Chaswood inks term sheet with battery firm for potential US$1b reverse takeover
MALAYSIAN restaurant operator Chaswood Resources Holdings has signed a non-binding term sheet for its proposed acquisition of battery maker 3DOM (Singapore) Pte Ltd (3PL), with an indicative price tag of at least US$1 billion.
If undertaken and completed, the transaction is expected to result in a reverse takeover of Chaswood, the Catalist-listed firm said on Sunday.
Japan-based 3DOM Inc, which wholly owns 3PL, will become Chaswood's largest shareholder upon the deal's completion.
Under the term sheet, Chaswood plans to buy 3PL for 70 per cent of the latter's valuation by an independent valuer, and this indicative price will not be lower than US$1 billion.
To pay the consideration, Chaswood will issue shares at US$0.028 apiece, equivalent to about S$0.038 per share, which is at a 322 per cent premium over its closing price of S$0.009 before the trading suspension on June 18, 2018.
3DOM and Chaswood will adjust the acquisition price if required, to allow a compliance placement to take place concurrently at the same issue price per share. Based on the US$1 billion indicative price tag, Chaswood will issue around 35.71 billion consideration shares, amounting to 99.3 per cent of its enlarged share capital.
3DOM has agreed to bear all professional costs in relation to the proposed acquisition. The Japanese company will enter into a S$2 million convertible loan, which will be convertible into Chaswood shares at US$0.014 per share.
The proposed acquisition will be subject to Chaswood shareholders' approval at an extraordinary general meeting to be convened, and the Singapore Exchange's approval, among other things.
The Chaswood group is undergoing a restructuring exercise and has entered into a scheme of arrangement with its creditors. The last extension of time for it to submit proposals to resume trading was June 15, and the scheme of arrangement also expired on June 30.
"To rebuild shareholder value, the company has been seeking an appropriate business to be injected into the group," Chaswood said. It added that the proposed acquisition of 3PL will place Chaswood in a position to expand into new business areas and grow revenues.
Chaswood noted that Singapore-incorporated 3PL has an irrevocable exclusive global licence to manufacture and sell next-generation lithium ion batteries using 3DOM's technologies, as well as the sub-licensing right of such technology.
3PL has firmed up suppliers and original equipment manufacturer (OEM) plants to fulfil orders from battery firms and global automobile manufacturers for deliveries in mid-2022.
As at Sunday, the directors of 3PL are Hiroshi Iizuka, Shusuke Oguro and Timothy Teo Lai Wah. The company was incorporated in July 2019 with an issued and paid up capital of US$10,000.
3DOM was established in 2014 and aims to commercialise battery technology for mass usage, powering future applications such as battery-energy storage systems, Chaswood said.
The Japanese firm's representative director and president is Masataka Matsumura, who owns a 52.7 per cent stake in 3DOM. Its other directors include chairman Hikari Imai, chief technology officer Kiyoshi Kanamura, executive vice-president Mr Oguro, and Noriyoshi Suzuki, according to the company's website.
Besides Mr Matsumura, 3DOM's other shareholders who own more than 5 per cent each are Future Science Research Inc with a 10.8 per cent stake and Yukizo Kuroda with a 6.2 per cent stake.
Chaswood said that as at Sunday, it has not been provided with any financial information on 3PL. Chaswood will announce such information if and when a definitive agreement is signed.
3DOM and Chaswood plan to ink a definitive agreement within four weeks from Aug 19, the date of the term sheet.
