SINGAPORE - The Stratech Group has agreed to place out an eventual 58.4 per cent stake in itself to a private equity investor for US$20 million (S$27.6 million) and to convert about $8.75 million of loans into shares, the surveillance technology company announced on Wednesday (Aug 15) after the market closed.
Under the deal, Stratech will place 406.06 million new shares at 6.6 cents apiece to Boulevard Capital Partners, whose fund focuses on infrastructure investments in Asia and South America.
One condition for the placement is the conversion of Stratech's outstanding borrowings from current controlling shareholders David Chew and Leong Sook Ching into new shares at the same per-share price as the placement. Stratech said that it owes $5.5 million to the two shareholders, with a further $3.25 million committed. Assuming that the entire $8.75 million is converted, the Boulevard placement will represent a 58.4 per cent stake in Stratech's enlarged share capital.
Upon completion of the placement, Boulevard will have the right to appoint up to three directors to Stratech's board. Mr Chew, who is executive chairman of the company, and Ms Leong, who is an executive director and the company's chief corporate officer, will continue to have the right to appoint themselves as executive directors.
The deal is also conditional upon Stratech shareholders approving a whitewash waiver to remove the requirement for Boulevard to make a general offer for the company, and to approve the placement itself.
Stratech shares are currently suspended from trading.