Luminor unit to buy 71.6% of equity and debt crowdfunding platform Funded Here

LUMINOR Financial Holdings' 5UA wholly-owned subsidiary, Starland Axis, has agreed to buy a 71.6 per cent stake in equity and debt crowdfunding platform Funded Here for S$2.9 million, Luminor said on Saturday (Feb 12). (see amendment note)

Catalist-listed Luminor said the acquisition will allow it to expand its financial solutions business to include a peer-to-peer equity and lending based crowdfunding marketplace service regionally.

Funded Here, which has a Capital Markets Services Licence from the Monetary Authority of Singapore, aims to connect startups and companies to strategic investors on its platform. It posted a loss before tax of S$337,545 for the financial year ended Dec 31, 2020, and its net tangible assets as at Dec 31, 2020 was S$997,574.

In January, Starland Axis entered into a memorandum of understanding (MOU) with vendors of Funded Here to acquire the shares.

Starland Axis also said it has the intention of acquiring up to 100 per cent of Funded Here for a purchase consideration of S$4.1 million, on the same terms and conditions applicable to the vendors.

Of the purchase consideration of S$4.1 million, 58 per cent will be met through the issue of new Luminor shares at S$0.30 each to the vendors, while the remaining 42 per cent will be met through cash or the the issue of new Luminor shares at S$0.30 each, at the option of the vendors.

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The issue price of S$0.30 per consideration share represents a premium of 236 per cent to the volume weighted average price (VWAP) of Luminor shares on Jan 28, which was the full market day where the shares were traded on the date of the MOU.

It also represents a premium of 244.8 per cent to the shares' VWAP on Feb 11, the full market day where the shares were traded on the date of the sale and purchase agreement.

The company noted that the vendors will "use their best endeavours" to procure other shareholders of Funded Here to sell their remaining shares to Starland Axis.

Assuming the company acquires 100 per cent of Funded Here and 13.5 million consideration shares were issued, the new shares will represent 8.6 per cent of enlarged issued and paid-up capital of Luminor if the acquisition was completed.

After the proposed acquisition, the net tangible assets of Luminor is expected to decrease to 76.07 fen from 79.77 fen for FY2020, assuming the acquisition has been completed on Dec 31, 2020. Meanwhile, its loss per share will widen to 3.42 fen from 2.47 fen for FY2020, assuming the acquisition has been completed on Jan 1, 2020.

Shares of Luminor closed down S$0.005 or 5.4 per cent at S$0.087 on Friday.

READ MORE: FundedHere is first equity-based crowdfunding platform to get full nod from MAS

Amendment note: The article has been edited to correctly reflect the purchase considerations.