Rex International unit to acquire more shares of commercial drone company

A UNIT of Rex International will pay US$1 million to acquire more shares of Xer Technologies, a Singapore-registered commercial drone company.

The move will bump its existing shareholding interest in Xer from 40 per cent to about 53 per cent, making the company a subsidiary of Rex.

Additionally, as part of the deal, the wholly-owned subsidiary Rex Technology Investments (RTI) will have to enter into a shareholders’ agreement that would oblige it in having to inject a capital amount of up to S$3 million if Xer achieves certain technical and sales milestones.

Announcing these in a bourse filing on Friday (Dec 30), the group said the initial consideration of US$1 million and subsequent capital commitment of up to US$3 million are to be fully satisfied in cash, and were determined on a willing buyer, willing seller basis.

The US$1 million acquisition itself entails an agreement to subscribe for 23,809 new shares in Xer, which has a total issued and paid-up share capital of S$1.4 million, comprising 83,333 ordinary shares.

Xer was incorporated in Singapore on Jun 8, 2021, after having acquired 100 per cent of the stake in UAV Development Sweden (UAVDS) for 50,000 Swedish kronor (S$7,900).

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UAVDS is a spin-off from a Swedish security company, Nicax Holding, that has been offering commercial drone flying search and rescue and surveillance services since 2011.

In 2019, UAVDS started developing its own durable, long-range multirotor drones that could fly for several hours, when it saw a lack of suitable heavy-duty drones with long flight time on the market.

Xer now develops and builds drones to target clients in areas such as infrastructure inspection, search and rescue operations, public safety and additional applications. 

The group highlighted that Xer has just sold its first drone through a tender to the Swedish government and the company is expecting to sell more drones in the first quarter of 2023 with ambitious sales targets for the full year. 

RTI first bought shares in the company in July 2021 to diversify from its core business of oil exploration and production to an investment in a promising company in an up-and-coming industry.

Then, it paid US$1 million to buy 33,333 shares, which gave it a 40 per cent stake in Xer, and there was also a similar condition for the acquiring company to commit to a capital injection of up to US$3 million.

The group said since then, Xer has achieved the previous production and testing milestones, save for the sales milestone.

Shares of Rex International closed flat at S$0.215 on Friday.