Working-capital loans provider oCap in reverse takeover of Catalist-listed CPH

SINGAPORE - The owners of working-capital loans provider oCap Management are injecting the business into Singapore-listed CPH in exchange for at least an 80.34 per cent stake.

According to a Singapore Exchange filing on Thursday (Nov 22), CPH will acquire oCap Management from Delphinium Capital, an investment company with a fintech and regulated financial services assets portfolio, for $61.8 million by issuing some five billion new shares at $0.012 per piece. Delphinium will become the single largest shareholder with 80.34 per cent stake in CPH, amounting to a reverse takeover.

The consideration was derived after "after arms' length negotiations" between CPH and Delphiumium, and on a "willing-buyer and willing-seller basis".

The price also takes into consideration Delphinium's representation and warranty to CPH that oCap shall achieve a minimum profit before tax of US$5 million for the financial year ending Dec 31, 2018. oCap's profit before tax at the end of 2017 was US$1.6 million.

The deal is subject to the approval of CPH's shareholders at an extraordinary general meeting.

Lee Teong Sang, independent non-executive chairman of CPH, said that the proposed acquisition would allow them to penetrate the "fast-growing fintech industry with an operating business that is profitable and has high growth potential".

He added that the deal would revive investors' interest in CPH shares and "enhance the group's long-term shareholder value".

CPH's shares have been trading flat around S$0.01 for the past month.

Meanwhile, CPH has appointed PPCF as its financial adviser and full sponsor for the proposed acquisition. Tito Isaac & Co LLP is acting as legal adviser for Delphinium and oCap. Its managing partner, Tito Shane Isaac, is also an independent director of CPH.

CPH also appointed an independent financial adviser to the directors who are considered independent for the purposes of the whitewash resolution.