UPDATE: Addvalue enters deals to raise up to S$13.25M from EDIS, other new investors, directors

Singapore one-dollar bill, showing satellite dishSingapore one-dollar bill, showing satellite dish

This item was originally published on Sunday, 5 December 2021 at 18:06 SGT; it has since been updated to include Addvalue Technologies’ announcement trading in its shares will resume at 0900 SGT Monday.

Addvalue Technologies has entered deals to issue new shares to Economic Development Innovations (Singapore), various new investors and Cheng Kwee Kiang as well as directors, employees and business associates, raising as much as S$13.25 million, the company said in filings to SGX Sunday.

Under the private placement deals, Addvalue has secured S$5.50 million in funding, with the potential to raise another S$7.75 million from the investors, the mobile satellite communications company said.

Up to 449.18 million new shares will be issued at S$0.0127 under the general share mandate, which was approved by shareholders in September, while another up to 594.07 million new shares may be issued at S$0.0127 each, subject to approval at an extraordinary general meeting (EGM) of Addvalue’s shareholders, the filing said.

The subscription price is a discount of around 3.79 percent to the weighted average share price of S$0.0132 on 26 November, which was the last full trading day before the subscription deals were entered into, the filings said.

As part of the deal, Tan Khai Pang will be appointed as CEO, and Dr. Colin Chan Kum Lok will remain executive chairman “for the time being,” with a view to transition him to a non-executive position as part of a succession plan, Addvalue said.

The funds are earmarked for repaying borrowings, paying payables and for working capital, including materials and testing costs, marketing and administrative expenses, and for business expansion, the filing said.

Economic Development Innovations (Singapore)

Economic Development Innovations (Singapore), or EDIS, is the lead investor, Addvalue said.

EDIS is a privately owned investment and development firm focused on businesses in the digital economy, including technology, education and job creation.

“The group’s business, in particular, the successful development of the technology used in its Inter-Satellite Data Relay System (IDRS) business, fits the investment objectives of the subscriber in helping to support and grow businesses that develop specialized solutions to address the needs of the digital economy,” Addvalue said in the filing. “The subscriber recognises the unique positioning of the group in the satellite and space sector as well as the technology gap that the group is able to fill with its IDRS technology.”

EDIS is set to acquire 78.7 million shares in the first tranche and will have the right to subscribe for another 315 million in the second tranche, the filing said.

The first tranche is for a total of S$999,490, the filing said.

If both tranches of shares are fully issued, EDIS will become a substantial shareholder with an 11.96 percent stake, the filing said; the quantum of investment for both tranches would be around S$4 million, the filing said.

EDIS has also agreed to provide an interest-free loan to help the company meet its immediate cashflow requirements, with the loan to be set off against the consideration due, Addvalue said.

EDIS has nominated Chua Chwee Koh as a non-executive non-independent director to Addvalue’s board, the filing said. Chua Chwee Koh was at Certis CISCO for 17 years, after retiring from the Singapore Armed Forces with the rank of Brigadier General, the filing said.

Other investors

Other investors in the fund-raising will acquire 185.24 million new units, with 185.24 million new free warrants, at S$0.0127 each, for a consideration of S$2.35 million, the filing said.

That investor group includes Alan Wang Yu Huei, Lee Loi Sing, Lim Chye Huat @ Bobby Lim Chye Huat, Teo Khiam Chong, Lee Chee Seng, Mdm. Tam Siew Foong and Jin Xin Wealth Management, the filing said. All said the subscription was for personal investment purposes, the filing said.

If both the new shares and warrant shares are issued, Alan Wang Yu Huei will hold 6.38 percent of the enlarged share capital, while Jin Xin Wealth Management will hold 1.53 percent, the filing said.

Alan Wang Yu Huei, an existing shareholder, is considered a key creditor of the group, while Lee Loi Sing is an existing shareholder, the filing said.

Jin Xin Wealth Management is an investment holding company with Yap Soon Heng @ Julian Yap as its major shareholder, the filing said.

Chee Kwee Kiang

Chee Kwee Kiang, a key creditor of Addvalue, has been granted the right to subscribe for up to 110 million new shares, the filing said, adding that he would have 4.66 percent interest in the company if all the optional shares are issued.

Addvalue said Chee Kwee Kiang is a business associate and private investor.

“The subscriber has been supportive of the group and, at the time when the group needed critical funding for its operations in mid-2020, he had extended a loan of S$2 million, of which S$1.42 million remains outstanding,” Addvalue said, noting the repayment timeline has been extended on “more than one occasion.”

As part of the optional right to subscribe for the shares, Chee Kwee Kiang has committed to not requiring the loan repayment pending the exercise of the rights, Addvalue said.

If the optional rights and both tranches of shares are fully issued, Chee Kwee Kiang will have a 3.34 percent interest in the company, the filing said.

Directors, staff and others

In addition, five directors — Dr. Chan Kum Lok Colin, Tan Khai Pang, Wong Ming Ghee, Richard John Denny and Paul C. Burke — will be subscribing for shares in the placement, the filing said.

Members of staff, including Lee Soo Hwee, Tan Kiang Peng, Ekanayake Mudiyanselage Lakshman Ekanayake and Chow Choi Fun, will participate, the filing said.

Ooi Kok Rie, a creditor, will subscribe for 39.37 million shares, while Satex Ltd., or Eyal Joseph Trachtman as the nominee of Satex, will subscribe for 3 million shares, the filing said.

In total this group of directors, staff, Ooi Kok Rie and Satex, will subscribe for 169.07 million shares for a consideration of S$2.14 million, the filing said. Including existing shares held, this group will hold a 15.6 percent interest in Addvalue’s enlarged share capital after the first tranche of shares is issued, the filing said.

Tron deal terminated

Addvalue said its previous deal for PT Tron Asia Pasifik to subscribe for 2.34 billion shares at S$0.0127 each had faltered after Tron requested more time to fulfill conditions of the arrangement.

That led Addvalue to revisit some potential investors, and EDIS “responded with keen interest.” Addvalue said it told Tron any extension would need to be negotiated as a new deal, terminating the existing agreement.

Shares suspended

On Friday, Addvalue had submitted a request to SGX to convert its trading halt into a voluntary suspension to finalize documentation and announcements for its fund-raising.

Addvalue on Monday requested its shares restart trade at market open.