On June 17, The Edge Singapore (TES) asked Anthony Koh, CEO of MC Payment — which has been in the news in the past fortnight and is holding an EGM on June 30 to vote in new directors — four crucial questions pertaining to the future of the company he founded. MC Payment has four important payment licences in Singapore, Malaysia, Thailand and Indonesia, enabling the company to partake in the regional payment ecosystem. The company was listed on Catalist in February this year by way of a reverse takeover (RTO). The listed “shell” was Artivision, and on Feb 18 this year, Artivision became MC Payment. The journey to a listed company took three years. In late 2017, Artivision signed a heads of agreement with MC Payment’s vendor shareholders who were willing to sell their shares to Artivision, following an EGM where a majority of shareholders voted for the RTO.
TES: Is your plan to dilute major shareholder Ching Chiat Kwong through a placement?
Koh: No. Definitely not. I am fully aware that in his requisition for an EGM, he has placed a condition that there should be no attempt to cause a dilution of his shares prior to the EGM. I recognise that. This has placed a constraint on our normal treasury operations which is to constantly test the market for our credit and funding opportunities.
I guess I will have to put things on the “boiler” until after the EGM. In our normal course of business, I will have to wait till after the EGM. If there is going to be a placement it will be for working capital and growth because the company needs capital expenditure (capex). For companies, it is usual to accept dilution of shareholding as part and parcel of growth.
So far, the company has done a placement of $4 milion soon after RTO. We have spent $2.2 million on professional fees, and redeemed bondholders for $1.8 million.
TES: What are your working capital and capex requirements?
Koh: Here, again, I am talking post-EGM. Our financial team have recently completed their cash flow projections under various expected scenarios for the full year ahead post-EGM. We have studied the funding needs that would keep us financially comfortable without getting overly geared. We shop for the most suitable and affordable funding alternative. Broadly, we hope to raise $10 million to $15 million to well cover our working capital and capex needs.
TES: How did Ching end up as the major shareholder?
Koh: Before the RTO, Artivision was a dormant company with no operations. What interested me was the listing shell. Artivision was facing problems redeeming bonds of about $10 million for which Mr Ching could be liable. Mr Ching entered into a Settlement Agreement. Under the Settlement Agreement, Artivision’s liability to repay the December 2016 Bonds and April 2017 Bond to Mr Ching would be extinguished.
As at June 30, 2019, the aggregate of the outstanding principal and accrued interest owing by Artivision under the December 2016 Bonds and April 2017 Bond was approximately $8.75 million. The same grew to approximately $10.00 million by December 2020.
Mr Ching would be able to acquire 3,225,806,451 [MC Payment] shares at an issue price of $0.0031 per share (on a pre-consolidation basis) (or 64,516,129 shares at an issue price of $0.155 per share on a post-consolidation basis). For context, under the RTO, the bulk of the shares to be issued was at an issue price of $0.525 per share (i.e. 64,516,129 shares would have been worth $33.87 million).
TES: What are your hopes for the future?
Koh: I hope to put this behind us and put aside our individual differences to focus on the growth of the company and enhance shareholder value.
Photo: MC Payment
