Mainboard-listed Aspial Corp, controlling shareholder of Catalist-listed Maxi-Cash Financial Services Corp, plans to sell a group of businesses into the latter for at least $87.8 million.
The transaction, meant to consolidate the various jewellery brands under one listed entity, can be worth up to $99.8 million if subsequent earnings targets are met.
The target companies include Aspial Lee Hwa Jewellery Singapore; Gold Purple and BU2 Services. Besides holding these entities, Aspial Corp has significant property interests as well.
Maxi-Cash, meanwhile, focuses on pawn-broking and money-lending.
The deal requires the go-ahead from shareholders of both listed companies.
To pay for the deal, Maxi-Cash will issue around 311.7 million new shares at 16.3 cents each worth $50.8 million, which will lift Aspial Corp’s stake in Maxi-Cash from 62.56% to 71.78%.
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The remaining balance of the base consideration will be satisfied via a mix of cash and settlement of debt among related entities.
Upon completion of the deal, which will require the go-ahead from both companies’ shareholders, Maxi-Cash will change its name to Aspial Lifestyle, and also own and operate two well-known jewellery retail brands “Lee Hwa” and “Goldheart”.
Koh Wee Seng, CEO of Aspial Corp says this move will help consolidate resources and extract economies of scale. “It will transform the group’s retail business into a consumer lifestyle powerhouse and unlock a new stage of growth.”
Maxi-Cash’s CEO Ng Kean Seen says the deal will make Maxi-Cash a “preeminent” consumer lifestyle company in Singapore with a portfolio of strong brands. The name change to Aspial Lifestyle reflects the company’s “evolution and next stage of growth.”
Koh’s family control these various entities.
SAC Capital is Maxi-Cash's financial adviser for this deal.
Aspial Corp last traded at 9.8 cents; down 18.33% year to date.
Maxi-Cash shares closed July 7 at 16 cents, down 1.22% for the day and down 4.71% year to date.
