mm2 Asia scraps stake sale; PE fund to take 29% of Vividthree stake in direct share deal instead
As a result of the new share placement, controlling shareholder mm2 Asia’s stake in Vividthree will be diluted to 23%
[SINGAPORE] Vividthree Holdings will see private equity fund Hildrics Asia Growth Fund VCC take a 29 per cent stake through a S$2.2 million subscription of new shares, replacing a scrapped deal for the fund to buy equity from controlling shareholder mm2 Asia.
Both the termination of the old deal and the creation of the new share subscription agreement took place on Sep 8.
Under the new placement, Vividthree will issue 137.4 million new shares to Hildrics at an issue price of S$0.01615 a share. This will increase the fund’s stake in the company from its current 7.98 per cent to 29 per cent of the enlarged share capital.
Meanwhile, mainboard-listed mm2 Asia’s stake will be reduced to 23 per cent, from the current 29.9 per cent, after the proposed placement.
The issue price represents a 15 per cent discount to the volume-weighted average price of S$0.019 a share of Vividthree’s shares on Sep 5, the last market day before the agreement was signed.
In a bourse filing on Wednesday (Sep 10), Vividthree said that the estimated net proceeds of S$1.74 million will be used to strengthen its financial position and for general working capital, including new and existing projects. The company’s directors stated that they believe the placement is the “most suitable fundraising option” available at this time.
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The buyer Hildrics Asia Growth Fund VCC is a private equity fund that provides growth capital to mid-tier South-east Asian enterprises with established track records and growth potential.
It is managed by Hildrics Capital, a Singapore-based fund management company specialising in originating proprietary deals across all industries in Singapore and South-east Asia.
The new placement replaces the deal made in May, when mm2 Asia had agreed to sell a 21.02 per cent stake in Vividthree to Hildrics for S$1.7 million.
Had that disposal proceeded, mm2’s holding in Vividthree would have been reduced to approximately 8.9 per cent, at which point Vividthree would have ceased to be an associated company of the group.
Proceeds from that sale were intended to be used to repay mm2’s outstanding liabilities.
Vividthree shares last closed flat at S$0.02 on Sep 8, before the company called for a trading halt. Meanwhile, mm2 Asia shares closed S$0.001 or 25 per cent lower at S$0.003 on Wednesday, ahead of the announcement.
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