OxPay Financial has signed a non-binding summary of key terms with PT Diners Payment Indonesia (PT DPI) in relation to OxPay’s proposed investment in the latter.
PT DPI is the Indonesian agency for the country’s Discover and Diners Club and merchant acquiring payment processing business. PT DPI is also in the process of acquiring the requisite payment processing licence, credit and charge card issuing and acquiring licence and other relevant licences to conduct its business from the Indonesian government and relevant government agencies.
Under the term sheet, OxPay will invest US$1.1 million ($1.5 million) for a 45% stake in the enlarged share capital of PT DPI. The investment will be paid partly in cash and partly in shares in OxPay.
“The proposed investment is subject to, amongst others, the execution of mutually acceptable definitive agreements and due diligence review results being satisfactory to the investor in its absolute discretion,” says OxPay on Nov 9.
Under the term sheet, the investor will be granted three months or a mutually agreed longer period to perform the due diligence and to negotiate the definitive agreements for the proposed investment. During the exclusivity period, PT DPI and its existing shareholders will not solicit or initiate or enter into any negotiations or discussions with any other party for any investment in PT DPI. They are also not allowed to enter into any negotiations with regard to the acquisition of any interest in PT DPI unless OxPay concludes – within the exclusivity period – that it no longer desires to pursue negotiations for the proposed investment.
Except for certain provisions relating to exclusivity and confidentiality, the term sheet is not intended to be legally binding. It also has no legal obligations, commitments or liabilities.
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In connection with the proposed investment, PT DPI will grant an option to Ox Capital to subscribe for a 5% stake in PT DPI’s enlarged share capital following the issue of new shares as well as the completion of the proposed investment at US$120,000. Ox Capital is owned equally by Ching Chiat Kwong, OxPay’s non-executive non-independent chairman and Shawn Ching Wei Hung, the non-executive non-independent deputy chairman of OxPay.
The call option shall be exercisable from the date of its grant up to two years thereafter or when PT DPI has successfully obtained its payment licence from Bank Indonesia, whichever is later.
OxPay has appointed one of PT DPI’s founders Yick Li Tsin as the chief operating officer (COO) of OxPay SG, which is a wholly-owned subsidiary of OxPay. Yick is also appointed as an executive officer of the group.
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Yick currently holds a 43.5% interest in PT DPI.
As at 3.09pm, shares in OxPay are trading flat at 6 cents.
