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Hot stock: Shares of Procurri slump as investor drops plan to buy Procurri stake

SHARES of enterprise hardware supplier Procurri Corporation slumped on Tuesday morning, after it said a proposed investor New State Capital Partners has withdrawn its acquisition offer. It had lifted a trading halt of its shares on Tuesday. 

The stock was trading at S$0.29 as at 11.45am, down 6.45 per cent or two Singapore cents. Some 515,000 shares changed hands. 

No specific reasons were provided for the withdrawal of the letter of intent by New State - with the deal first announced on Feb 3. New State, a private investment firm which operates in the US and focuses on investments in business, healthcare and industrial services industries, had then proposed to acquire all the shares of the company, other than treasury shares and shares held by substantial shareholder Irrucorp, via a scheme of arrangement.

Irrucorp, in which Procurri chairman and global CEO Sean Murphy, and executive director and global president Edward Flachbarth are deemed to have interests, owns about 12.03 per cent of the company as at March 16, 2018, according to Procurri's 2017 annual report.

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New State's latest withdrawal follows a termination of further discussions with another interested buyer, who was unnamed.

The bowing out by New State also comes as Proccuri's major shareholder DeClout announced in February it would further pare its stake in mainboard-listed Procurri. It intends to sell 36.3 million of its Procurri shares to a fund held by a private equity firm - Novo Tellus PE Fund 2 (NT Fund 2) - at S$0.33 per share to raise net proceeds of S$12 million.

Regulatory filings on Tuesday gave a further peek into the owners behind the private equity's fund, which was announced as an independent third party.

New Earth Group 2 (NEG 2) is the general partner of NT Fund 2. A Loke Wai San and Keith Hsiang-Wen Toh are deemed to be interested in the shares of Procurri, as they hold more than 20 per cent in NEG 2.

A certain ACT Holdings Pte Ltd also holds a deemed interest in the shares of Procurri, as it owns more than 20 per cent ownership in NT Fund 2. In turn, ACT Holdings is backed partly by owners who share the same Toh surname – namely, Serene Toh Soo Ling, Toh Soo Chin Merlene, and Toh Ban Leng James.

Procurri said the deal between DeClout and the private equity firm would be done via a put and call option agreement. The options are due to be exercised between March 18 and April 17, 2019.

DeClout now owns less than 30 per cent of Procurri, having earlier cut its stake from 46.8 per cent by selling in January another 48 million shares in Procurri at S$0.32 per share to two third parties. DeClout had said these parties are independent.

Based on regulatory filings, a Soh Chooi Lai had bought S$11.8 million worth of Procurri shares via a married deal with DeClout on Jan 4, translating to a 13.5 per cent stake in Procurri. The second party remains unnamed. Only substantial shareholders who hold more than 5 per cent of shares in a company must declare their holdings in a regulatory filing.

In 2010, a Mr Soh Chooi Lai had joined ACT Holdings with other partners to acquire the Glenville residential property off Upper Serangoon Road, online property records show.