MoneySmart expected to list on SGX next year in reverse takeover move

SINGAPORE - Personal finance platform MoneySmart Group is seeking a listing on the Singapore Exchange (SGX) through a reverse takeover deal with hotel operator Asia-Pacific Strategic Investments (APS).

The deal is valued at US$161.7 million (S$229 million) and both companies signed a sales and purchase agreement recently.

A reverse takeover is a process whereby private companies can become publicly traded companies without going through an initial public offering. This is also known as a “backdoor listing”.

The result of the agreement will see MoneySmart owning the majority of the shares in the new entity and taking control of it, said founder and chief executive Vinod Nair on Friday.

MoneySmart is expected to be listed in the second quarter of next year once procedures such as auditing and regulatory approval are completed.

APS will subsequently cease its real estate business and dispose of its assets.

MoneySmart said the capital injection will be used to grow the company’s insurance business, as well as to pursue other potential mergers and acquisitions.

The company launched its new digital insurance platform, Bubblegum, about two weeks ago.

Bubblegum offers car and travel insurance, and is looking at offering term life insurance as its next product. It is aimed at the younger generation of digital natives who prefer to do their own research on online sites instead of having to talk to an insurance agent.

Mr Nair said: “While the market is volatile and uncertain at the moment, we believe this presents a good opportunity for well-capitalised companies to pursue strategic acquisitions.”

MoneySmart has been growing steadily over the past few years and is in a good position to continue its growth despite the challenging macroeconomic outlook, he added. The company will also be considering expanding into other developed markets in Asia, given the high financial literacy and financial product penetration rates in those countries.

The firm was founded in 2009 and operates in Singapore and Hong Kong. It produces financial content such as comparisons between different types of credit cards and loans.

APS is a real estate developer and owns a 113-room luxury boutique hotel in Huzhou in China’s Zhejiang province. It was incorporated in Singapore in 2006 and listed on the SGX in 2007.

In a filing on the SGX on Friday, APS said its business operations in China have experienced significant disruptions caused by the coronavirus pandemic and that this has resulted in losses for the company.

APS reported a full-year net loss of $17.7 million, up from a $5.1 million loss a year ago, for its 2022 financial year.

The company has thus been looking to explore new investments and acquisitions to improve its financial performance, it said.

It added: “The proposed acquisition would allow the company to enter the financial services industry in Singapore and in the region, and will also enable the company to transform its business.”

APS shares closed at 0.2 cent on Friday after trading resumed following a trading halt on Tuesday.