Two of Starburst Holding’s controlling shareholders, executive chairman Edward Lim Chin Wah and managing director Yap Tin Foo, have each sold 3.2 million shares at 39 cents each to a group of investors.
The investors, which include ICH Capital and Eternal Glade Investment, bought from Lim and Yap at a discount of 7.9% off Starburst’s one-day volume-weighted average price of 42.34 cents.
ICH Capital is a consultancy firm with core activities in business advisory and direct investments while Eternal Glade is a discretionary fund focusing on equity investment in Asia (excluding Japan) managed by ICHAM.
Prior to the sale, Lim and Yap held 36.98% and 34.95% respectively of the shares.
Year to date, Starburst, which designs and builds shooting ranges, has won some $59.1 million in new contracts.
Lim says the sale marks the first step to diversify and institutionalise Starburst’s shareholder base. “It is also a strong testament to our ability to innovate and help our customers achieve mission readiness in one of the most unpredictable threat landscapes in modern history,” he added.
Edison Chen, founder of Eternal Glade and fund manager of ICHAM, describes Starburst as a “very promising” business with patented offerings and a niche value proposition.
“Tensions in the current geopolitical landscape will likely bode well for the business while the growing value of its secured contracts marks an inflection point,” he said, adding that he is confident that given time, this could turn into a "multi-bagger investment".
In a separate announcement on Aug 12, Starburst reported earnings of $2.1 million for 1HFY20 ended June 30, a turnaround from losses of $2.1 million incurred in the same period last year.
Revenue in the same period was $9.7 million, up 176.3% y-o-y, as it booked revenue from two projects, one in Southeast Asia and one in the Middle East.
The company, owing to the nature of its industry, typically does not name who its customers are.
Starburst is upbeat that it is riding on a positive momentum, due to higher defense spending and the threat of terrorism and extremism.
“We have further participated in tenders in both Southeast Asia and the Middle East in 2020 and we anticipate positive results from these bids,” said Yap, the managing director.
Starburst closed Aug 13 at 42 cents, unchanged for the day.
