Ayondo in $158m reverse takeover deal with Starland

Fintech and social trading firm Ayondo is eyeing a listing on the Singapore Exchange via a reverse takeover of property developer Starland.

Under the deal, Starland will acquire Ayondo for $157.5 million and pay for it through the issue of new shares priced at 18.7 cents.

Starland will work with UOB Kay Hian, the deal's financial adviser, to determine how many shares are needed to ensure that the stock price exceeds 20 cents.

Under Singapore Exchange rules, companies need to maintain a minimum share price of 20 cents or be put in a watchlist which could eventually see them delist.

Starland will distribute all its existing cash - some 75.24 million yuan ($15.36 million) - to shareholders, except for $4 million that will be used for expenses in the reverse takeover and other loan repayments.

Ayondo's main line of business is online trading of shares and commodities through a financial derivative known as contracts for difference (CFD). CFDs let traders take a punt on the direction of an underlying financial asset.

Ayondo also allows users to follow other successful traders and mimic their style of trading.

The firm, which was previously listed on the Berne Stock Exchange, recorded a loss of 75 million yuan last year on the back of 83 million yuan in revenue. The book value of Ayondo as at Dec 31 was 147.2 million yuan while net tangible liabilities stood at 52.6 million yuan.

Starland has developed several properties in China, including Singapore Garden, a residential project in Chongqing.

Its results for the six months to March 31 saw the group dip into the red with a loss of 14.3 million yuan.

Starland said: "The proposed acquisition would present the group with an opportunity to expand its business, in line with its diversification strategy into the fintech business, which will allow it to achieve a more consistent and sustainable financial growth."

A key person in the deal is Mr Kwan Chee Seng, a non-executive director of Starland.

He is also a shareholder and convertible bond holder of Ayondo, and a director of Luminor Capital, the fund manager for Luminor Pacific Fund 1 and Luminor Pacific Fund 2, which are convertible bond holders of Ayondo.

A version of this article appeared in the print edition of The Straits Times on June 21, 2016, with the headline 'Ayondo in $158m reverse takeover deal with Starland'. Print Edition | Subscribe