Union Gas unit subscribes for convertible bonds in data handling services provider

UNION Gas Holdings announced on Thursday that its wholly-owned subsidiary U-Global has entered into a bond subscription agreement with secure data handling services provider Adera AI for an aggregate principal amount of S$1 million of convertible bonds.

Union Gas said in its bourse filing that the bond subscription represents an investment in a growing sector with potential for positive upside for the group. This comes as the firm is involved in providing electronic solutions through the use of e-invoicing and other related services.

Adera AI provides secure data handling services to clients in Singapore, Hong Kong and Macau. It offers end-to-end solutions for the transformation of physical documents to secured data using intelligent data capture, recognition scanning, additional validation technologies and archival services.

Under the agreement, Adera AI will redeem bonds at their principal amount, which would give the Union Gas an internal rate of return of 10 per cent per annum on the principal amount, calculated from the closing date of the subscription agreement to the date falling one year from the closing date.

If Adera AI were to list on a stock exchange prior to the maturity date, the bonds shall be converted into shares at a 20 per cent discount to the public offering price .

The consideration for the proposed subscription of S$1 million was arrived at on a willing-buyer willing-seller basis, taking into consideration various factors including the estimated market value of net assets owned by the issuer and the potential returns on the bonds. The book value of the bonds is S$1 million, which will be satisfied in cash.

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The subscription is not expected to have any material impact on the consolidated net tangible assets and earnings per share of the group for the financial year ended Dec 31, 2020.

Shares of Union Gas ended Thursday at S$0.54, up 2.5 Singapore cents or 4.9 per cent.