SHC Capital Asia plans reverse takeover of Tong Da Medical Device

SINGAPORE - Catalist-listed SHC Capital Asia Ltd plans a reverse takeover of Chinese firm Tong Da Medical Device for a consideration of $120 million, the firm announced on Tuesday.

This comes after the firm sold its core insurance business last August, rendering it a cash company.

SHC Capital will fulfil the consideration through the issuance of shares at S$0.07 apiece to Tong Da's owners.

They include Labuan-incorporated trusts held for the benefit of Tong Da's group CEO Cui Keshan, its group head of research and development Meng Guangshou and his wife, and other individuals.

Tong Da has five wholly-owned units. The China-based group manufactures medical equipment and disposable medical supplies.

The consideration reflects a price-to-earnings ratio of 10 times Tong Da's net profit before tax for the year ended Dec 31, 2014. In the 2014 financial year, the group reported earnings of 47.3 million yuan (S$10.3 million) on 119 million yuan in revenue.

As part of the takeover bid SHC Capital will also conduct a share placement to raise $20 million and to meet the minimum shareholding spread requirements by the Singapore Exchange.

SHC Capital faces the prospects of being removed from the Catalist board if it is unable to meet the requirements for a new listing within 12 months.