SINGAPORE - Mainboard-listed Addvalue Technologies will issue a $3.45 million two-year convertible loan note at par with interest of 8 per cent per annum to an existing shareholder, Paul C Burke.
Mr Burke holds 3.38 per cent of the shares in Addvalue, as at July 2, the company said in a filing late on Tuesday night (July 2).
The loan note can be converted into 150 million new shares in Addvalue at a conversion price of 2.3 Singapore cents per share. The conversion price represents a premium of around 4.55 per cent to the volume weighted average price of 2.2 cents per share for trades done on the Singapore Exchange on June 28.
Mr Burke will become a substantial shareholder - with a 10.55 per cent stake - and the single largest shareholder of the company, upon the allotment and issue of the 150 million new shares.
However, Addvalue noted that Mr Burke is a passive investor who has no board representation in, nor any involvement with, the management of the company.
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Of the $3.4 million estimated net proceeds from the issue, Addvalue intends to use $2 million to fund its Capability Development Program for Space and $1.4 million for working capital.
Addvalue said that Mr Burke is an accredited investor and is subscribing for the loan note for "investment purposes". He expressed his interest to invest in the company for his personal private investment, and will not hold the conversion shares in trust or as nominee for other persons.
Mr Burke is an American citizen, businessman and entrepreneur with more than 25 years of experience in the aviation industry, Addvalue said. He is the chairman of Konnectronix, a company focusing on product design and manufacturing for the e-mobility market.
Other than his existing shareholding, Mr Burke does not have any connections with Addvalue, the directors and substantial shareholders.
He will have the option to convert all or any part of the $3.45 million principal amount that remains outstanding at any time, up to and including the maturity date which is two years from the closing date of the issue.
The closing date will be three market days after the date on which all the conditions precedent are satisfied or otherwise waived, provided the closing date is not later than one month from the date of the subscription agreement.
No placement agent has been appointed for the issue of the loan note and/or the allotment and issue of the conversion shares.
Addvalue offers digital, wireless and broadband communications technology products.
Its shares last traded on Tuesday at 2.1 cents.