Addvalue to receive $1.5m from investor

Addvalue Technologies has entered into an agreement with an investor who will inject $1.5 million by subscribing for 1.5 million exchangeable bonds of $1 each.

The bonds will be issued by a wholly owned subsidiary, Addvalue Innovation (AVI).

In the event of a listing on the Catalist board by AVI's subsidiary Addvalue Solutions (AVS) or an acquisition of AVS, the bonds can be exchanged for new shares in AVS.

The investor, Ms Audrey Hing Zeng Min, is a Singapore resident who is not related to any member of the board of directors or substantial shareholders of the company, said Addvalue in a statement on Tuesday.

The bonds have a coupon of 5 per cent per annum and a term of 18 months from the issuance.

The entire proceeds from the issuance will be used for the working capital of the group, Addvalue said.

Addvalue had previously sought to raise funds by proposing to place out up to 250 million new shares at four cents each to raise $10 million, with KGI Securities as the placement agent.

Subsequently, Addvalue said on June 19 that it was working with a couple of investors for alternative funding arrangements, which could include them taking up a "significant stake" in the company. As a result, it terminated the placement agreement with KGI.

In May, Addvalue announced that it was planning to spin off AVS - which undertakes all the business relating to its inter-satellite data relay system - via a distribution in specie of a portion of AVS shares currently held by Addvalue to Addvalue's shareholders to reward them with free AVS shares.

The proposed distribution in specie to be carried out ahead of the listing is expected to be at least 10 per cent of the company's existing shareholding in AVS.

This would be followed by a listing of the AVS shares on the Catalist board. Hong Leong Finance was appointed as a full sponsor, issue manager and placement agent.

Following this announcement, the company clarified that the proposed spin-off and listing will be carried out only if AVS is valued at no less than $70 million.

Addvalue also said it plans to retain AVS as an associated company, if not a subsidiary.

A version of this article appeared in the print edition of The Straits Times on July 05, 2018, with the headline 'Addvalue to receive $1.5m from investor'. Print Edition | Subscribe