Mainboard-listed Jaya Holdings' urgent hunt for a new business ahead of a looming de-listing has yielded results in the nick of time.
Jaya has inked a deal to acquire Heduru Moni, a personal and consumer finance firm from Papua New Guinea (PNG), in a $232.2 million reverse takeover.
The acquisition will allow Jaya shareholders to "venture into a new business area with a proven profitable track record and that has potential for growth", said the company in a statement yesterday.
Under the agreement, Jaya will issue up to 725.6 million new shares at 32 cents each, on a pre-consolidation basis, to the owners of Heduru Moni. The firm plans to undertake a two-for-one share consolidation.
Jaya said shareholders will be entitled to a cash distribution of up to 38 cents per ordinary share before the reverse takeover is completed - via dividend or capital reduction - subject to shareholder approval.
The deal, subject to conditions including a valuation report on Moni Plus - the brand under which Heduru Moni operates - and regulatory approvals, is expected to be completed by Jan 31 next year.
If successful, Heduru Moni will be the first PNG firm listed on the Singapore Exchange (SGX).
The deal comes after Jaya disposed of its offshore fleet and shipyards in June last year to become a cash firm. It had missed two deadlines to get a new business to meet listing requirements and has until June 3 to do so, or face de-listing.
Set up in 1998, Heduru Moni has an office in PNG capital Port Moresby and has been licensed as a financial institution by the Bank of PNG since 2006. Net profit rose to $19.4 million for the 2015 financial year, from $13.9 million in 2014. The firm is owned by five people - Messrs Bernard Chan, Jason Tan Siew Ann, Lee Chan Beng, David John Kelso and Gajanan Pandurang Barve.
Mr Kelso, managing director of Heduru Moni, told a briefing its Moni Plus brand has 25,000 customers, mostly from the public service sector, for education-related loans.
It is able to keep a low non-performing loan ratio at 7 per cent as loan repayments are made through direct salary deductions.
Citing growth prospects in PNG, population 7.5 million, as a "young developing country", Mr Kelso said Moni Plus plans to expand market share by focusing on core segments in personal and consumer loans, asset financing and online foreign exchange delivery.
Mr Kelso said Moni Plus is also looking to open a second branch in the country's second largest city, Lae, while exploring expansion opportunities into emerging markets, especially in South-east Asia.
He added: "A listing on the SGX mainboard will further enhance our profile as a leader in the financial services in Papua New Guinea. With high international standards of governance, emerging market experience and strong management, we are poised for further growth."
Maybank Kim Eng Retail Research said in a note that Moni Plus is a market leader in personal and consumer loans business in PNG, and that its competitive advantage "lies in its ability to turn loan approvals within 24 hours".
Jaya shares rose 6.5 cents or 14.3 per cent to 52 cents yesterday, after the announcement was made.