Lincotrade to debut on Catalist after $25m RTO by Fabchem China

Interior fitting out service provider Lincotrade and Associates has started trading on the SGX Catalist on Aug 8, following a $25 million reverse takeover by explosives maker Fabchem China.

In April 2021, Fabchem announced the takeover, issuing over 113.6 million shares at 22 cents per share to Lincotrade. This is more than double the 46.8 million shares that the company had before the takeover.

Earlier in March 2021, Fabchem disposed of its subsidiary Yinguang Technology. In its sale and purchase agreement with Lincotrade, Fabchem says will cease to have any operating business and is likely to be deemed as a cash company

Under SGX listing rules, SGX will proceed to delist the company if it is unable to meet the requirements for a new listing within 12 months.

What this means is following the RTO, Fabchem China will effectively transfer its listing from the Mainboard to the Catalist, although it will trade under the name of Lincotrade.

Fabchem said it was of the view that the proposed acquisition and transfer to the Catalist were “in the best interests of the company and its shareholders,” explaining that it presents an opportunity for Fabchem to acquire a new operating business.

This is so as to meet the SGX’s requirements of a new listing on the Catalist and allow the company to maintain its listing status.

As part of the acquisition, Fabchem’s entire board of directors resigned, although controlling shareholder Henry Wee and former non-excutive director Sun Bowen still hold stakes in the company. Sun now chairs another SGX-listed company, Imperium Crown, which recently gave up rights to operate a theme park in China.

Instead, Imperium Crown plans to diversify into another business by paying $51,000 for a 51% stake in Winco Construct & Decor.

In a press release on Aug 8, Lincotrade’s managing director Tan Jit Meng says that “Being a publicly listed company, we consider this to be a major milestone in our effort towards future expansion and growth. We also welcome the brand recognition that our listing on SGX will bring Lincotrade among our customers, employees and stakeholders.”

As of 11.49 am, shares of Lincotrade opened at 19.6 cents, and so far has stayed flat.