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China Hongxing Sports plans RTO, could enter gold-mining business
CHINA Hongxing Sports might be headed for a reverse takeover (RTO) that will make goldmining its core business.
The firm announced on Monday that it has entered into an agreement with Mining and Minerals Industries Holding Pte Ltd (MMIHPL) to acquire all the issued and paid-up share capital of MMJV Pte Ltd. MMJV, incorporated on March 22, is a holding company of two joint-venture companies.
One joint-venture company owns a gold-mine project comprising 3,619 hectares, located in the provinces of Isabela and Nueva Vizcaya, Philippines. The joint-venture agreement was between KC Development Phils and MMIHPL. The other joint-venture company owns a gold-mine project comprising 761 hectares, located in the province of Misamis Oriental, Philippines. The joint-venture agreement was between Wolfland Resources and MMIHPL.
The cost of acquisition will be the lower of S$100 million and the valuation set up by the Independent Qualified Person's Valuation Report, less the discount rate agreed between the parties. It will be financed by the allotment and issuance of new ordinary shares to the vendor at an issue price of 0.357 Singapore cent per consideration share.
The group will also be consolidating every 100 shares into one share on or before the completed acquisition; the consideration shares and issue price are computed without having taken into account the completion of the proposed share consolidation, it said.
China Hongxing announced on May 25, 2018 that it was deemed a cash company. The RTO will allow the group to apply for an extension of time to remove its cash company status and remain listed.
Alfred Cheong, independent director and chairman of the audit committee of the company, said: "We hope that this proposed transaction will bring a better closure for everyone. The proposed transaction will be able to bring new value to all shareholders of China Hongxing as the company embarks on a new and exciting journey with the newly injected business."