SINGAPORE - Mainboard-listed New Silkroutes Group will acquire an 80 per cent stake in a New York-based broker-dealer and investment bank group, CG Capital Markets Holdings (CGCMH), for US$14.4 million (S$20.3 million), as it expands its own investment business and diversify its business lines.
The US group owns CG Capital Markets (CGCM), which specialises in fixed-income market making and provides capital raising and advisory services to companies.
New Silkroutes will issue new shares to fund the acquisition. The issue price per share will be three Singapore cents above the company's average closing price in the five trading days prior to the completion date of the acquisition, converted into US dollars, it said in its announcement on Friday (Feb 3.
It will issue additional new shares worth up to US$9.6 million if CGCMH its subsidiaries meet certain after-tax profit targets over three years from 2017 to 2019.
CGCMH's subsidiaries had combined earnings of US$1.5 million in the 12 months ended June 30, 2016.
Post-acquisition, the US companies will operate under the brand name of New Silkroutes' wholly-owned investment arm, New Silkroutes Capital, which will be one of the first Singapore-based investment companies with operating entities registered with both the US Securities and Exchange Commission and the Financial Industry Regulatory Authority, said the comoany.
Said Dr Goh Jin Hian, New Silkroutes group CEO: "The acquisition will also enable New Silkroutes Capital to operate seamlessly across different time zones in key gateway cities worldwide and help New Silkroutes Group diversify its income stream.
New Silkroutes currently gets the bulk of its revenue from oil trading. Besides energy, it also has businesses in healthcare and infocomm technology.