SINGAPORE - Fresh from unveiling plans to fund an interested person transaction by nearly doubling its share capital, Catalist-listed Rich Capital Holdings has now told the bourse operator that it does not deem the deal a "very substantial acquisition".
The group was replying on Friday night (Jan 18) to questions from the Singapore Exchange (SGX) over its plan to buy construction companies Rich-Link Construction and Rich-Link Builders for $43.98 million.
The vendor is Wang Zhen Wen, controlling shareholder and chairman of Rich Capital. And the deal, announced on Jan 8, would see Rich Capital issue almost $35.2 million worth of new shares, or about 99.83 per cent of its existing share capital and 49.96 per cent of the enlarged share capital.
But "as none of the relative figures exceed 100 per cent ... the proposed acquisition was therefore classified as a major transaction", the Rich Capital board has said. A major transaction needs the approval of shareholders at an extraordinary general meeting, while a very substantial acquisition also requires a full sponsor, an independent valuer and detailed financial information.
The SGX, citing how the second tranche of payment could supposedly be paid in cash if Rich Capital has enough working capital to meet its operational needs and debts for 12 months, also asked who in the company will be assessing whether the working capital actually suffices.
Directors who are independent from the sellers will be responsible for that, "as supported by a cash flow projection to be prepared by management to the non-interested directors", the board replied.
Rich Capital also saw its sixth director's resignation in a year, with the latest being that of independent non-executive director Chow Wen Kwan.
In a regulatory filing on Saturday (Jan 19), the resignation of Mr Chow as Rich Capital's independent non-executive director was announced. He was appointed slightly less than a year ago, on Jan 22.
He was a member of the nominating, remuneration and audit committees of Rich Capital, formerly known as Infinio Group.
The reason for Mr Chow's resignation was "to focus on other current commitments". The lawyer sits on the board of another five listed companies, not including Rich Capital.
This is Rich Capital's sixth director's resignation in a year, including three executive directors who quit.
Rich Capital closed lower by 0.1 cent, or 20 per cent, at 0.4 cent on Friday.