Satellite-based communication company Addvalue Technologies announced on Dec 5 that it is raising some $13.25 million from a group of investors led by Economic Development Innovations Singapore (EDIS), that is chipping in up to $5 million.
In doing so, Addvalue is scrapping an earlier fund-raising deal announced on Nov 20.
EDIS is a private investment firm chaired by Philip Yeo, most notable as the outspoken former chairman of the Singapore Economic Development Board.
According to EDIS' website, its other portfolio companies include onSponge, which provides math education and Hessian Matrix, which describes itself as an "AI systematic global hedge fund".
Other Addvalue investors include certain creditors, staff and company directors.
The company will issue new shares at 1.27 cents each – a slight discount off the last traded price of 1.32 cents on Nov 26 before the shares were voluntarily suspended pending this announcement.
See also: VCPlus to raise just $600,000 from placement instead of $6.66 million after investors' u-turn
There will be a tranche of 449.2 million shares that will be issued allowed under the general share issue mandate.
Next, the company plans to issue another 594 million shares under a specific share issue mandated to be sought at an EGM to be called.
The net proceeds of some $12.6 million will be used to pare debt, pay suppliers and business partners, and be deployed as working capital, as well as for business expansion.
See also: UMS raises $51.6 mil after placement was 2.55 times covered
On a pro forma basis, the company’s net gearing would have been reduced from 97% to 20.7% as of Sept 30.
Assuming completion of the EGM tranche, EDIS will hold 11.96% of Addvalue.
EDIS is nominating one Chua Chwee Koh to be appointed as a non-independent and non-executive director of Addvalue.
“With support from EDIS and other shareholders and upon my appointment, I look forward to working closely with my fellow directors, the new CEO and a re-energised Addvalue team, to breakout and make Addvalue the global leader in the inter-satellite communication space,” says Chua.
Dr Colin Chan Kum Lok (picture), Addvalue’s chairman and CEO says he is honoured to have EDIS as the lead investor and appreciates the support from other investors.
“The funding ensures that adequate cash is made available to meet the needs of the group in terms of its working capital and its intended business expansion and growth,” he adds.
Under terms of the by now defunct fund-raising deal announced on Nov 20, Addvalue would have placed out more than 2.34 billion shares at 1.27 cents each to PT Tron Asia Pasifik.
For more stories about where money flows, click here for Capital Section
According to Addvalue in its Dec 5 announcement, following the announcement on Nov 20, Tron asked for more time to fulfil certain key conditions.
“As the company would like to conclude its fund raising exercise expeditiously, it revisited some of the potential investors which it has had been in active discussion previously concerning its funding needs,” adds Addvalue.
These investors included EDSI.
“The company subsequently responded to Tron that any funding to be so raised with it following the extension sought would need to be renegotiated,” adds Addvalue.
“Tron had accepted the company’s position and confirmed that it had no objection to the company admitting EDIS and the other investors for the funding.”
