Intraco to enter into revised agreement for investment into MHC Singapore

MAINBOARD-LISTED trading company Intraco on Wednesday said that it has entered into an amended binding heads of agreement to invest in digital asset platform MHC Singapore.

Shares of Intraco jumped 10.6 per cent, or 4.5 Singapore cents, on Wednesday before the announcement to close at S$0.470.

MHC Singapore, to be incorporated in Singapore by Australian entrepreneurs Mark Carnegie and Sergei Sergienko with equal shareholdings, will take over the relevant businesses and assets Australian digital asset platform MHC Digital Group.

Under the amendments, Intraco will no longer pay S$10 million in cash, since the new purchase consideration is now lower than the original purchase consideration, it said.

Intraco will now pay in the form of the issuance of 42 million new shares in the company at an issue price of S$0.50 per share. It will also issue 58 million warrants, each carrying the right to subscribe for 1 new share in the company.

The warrants shall not be listed or traded on the SGX and shall be exercisable by each seller at any time within 7 years from the date of issue. This is unless they each own more than 14.5 per cent of the company or unless the outstanding share capital of Intraco exceeds 345 million shares.

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Carnegie and Sergienko also must not request a board seat in Intraco if they each hold shares and/or securities convertible into 15 per cent or more of the total issued share capital.

Intraco, Carnegie and Sergienko have agreed to sign a definitive agreement in the next 2 months following the entry into this amended heads of agreement, and completion of the investment shall be subject to several conditions including the successful restructuring of the relevant businesses and assets in the MHC Digital Group to be held by MHC Singapore and shareholders approval.

One of the conditions under the original heads of agreement, where MHC Digital Co has to achieve a rolling 12-month consolidated group net profit after tax of at least S$24 million during the period of 24 months from the date of the acquisition, has been revised to S$20 million in the amended agreement.

Separately, Wong Fong Fui or FF Wong who is chairman and group chief executive officer of Boustead Singapore, has extended a S$10 million loan to MHC Singapore on Dec 22 for its business purposes. The loan is intended to be disbursed in January next year.

Subject to shareholders' approval, Intraco will also issue 40 million warrants at an exercise price of S$0.50 to Wong for introducing MHC Digital Group and the deal to the company. The warrants can be exercisable at any time within 4 years from the date of issue at S$0.50 per warrant, unless Wong owns more than 14.5 per cent of the company or unless the outstanding share capital of Intraco exceeds 283 million shares.