Intraco modifies deal to acquire MHC Digital assets

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Intraco Ltd. said Monday it entered into an agreement to acquire 51 percent of MHC SG from Mark Carnegie and Sergei Sergienko, with amendments to the previous heads of agreement on the deal. 

Under the new terms, the consideration has been reduced to 42 million new Intraco shares and 52.5 million consideration warrants, each of which carry the right to subscribe for one new share, compared with the previous agreement for 42 million new shares and 58 million warrants, Intraco said in a  filing to SGX. 

Consideration shares at premium

The consideration shares, representing 27.13 percent of the enlarged share capital post-completion, will be issued at S$0.50 each, marking a 108.3 percent premium over the last traded price on 10 December 2021, before the deal was announced, the filing said. 

The warrants carry a nominal exercise price of S$0.0001 each, with the maximum net proceeds to be S$5,250, the filing said. 

Carnegie and Sergienko have agreed that neither of them will hold more than 14.5 percent of Intraco within two years from the date of issue, the filing said.

In addition, the transaction is conditional on MHC SG achieving a rolling 12-month consolidated net profit after tax of at least S$18.5 million for the 24 months starting from the acquisition agreement’s commencement, compared with the previous agreement for S$20 million, the filing said.

The sellers are currently incorporating MHC SG, the filing said. 

Once it is incorporated, the sellers will transfer in all of Australia-based MHC Digital Finance, which is the manager of two Australian wholesale managed investment programs: The MHC Digital Asset Fund and the MHC Digital Market Neutral Fund, as well as an authorised representative of M.H. Carnegie & Co., which holds an Australian financial services license, the filing said.

Assets to be transferred to MHC SG

The sellers each hold 50 percent of MHC Digital Finance, the filing said. 

In addition, up to 35 percent of Australia-based Blockchain Assets will be transferred into MHC SG, the filing said. Blockchain Assets is the manager and trustee of the Blockchain Early Opportunities Fund and an authorised representative of M.H. Carnegie & Co.

The entire share capital of Australia-based Chrono Time X, which owns the TimeX hybrid cryptocurrency exchange in Australia, will be transferred into MHC SG, the filing said.

Digital asset growth

Intraco said the digital asset industry is fast-growing and it believes the proposed deal and diversification will allow it to participate in the sector’s growth prospects. 

“The sellers have developed MHC Digital Group into a leading Australian digital asset platform, combining traditional financial funds management expertise and digital asset expertise and providing end-to-end services including fund management and trading services,” Intraco said. 

“With the conducive and regulated environment in Singapore, the company will provide the target group with the appropriate platform for the expansion of its business regionally and internationally,” Intraco added.

The introducer of the company and the sellers, Suntec Harmony, which is wholly owned by Wong Fong Fui, will receive 40 million warrants which carry the right to subscribe for one new share with an exercise price of S$0.50 each, the filing said. 

Wong is the chairman and group CEO of Boustead Singapore, the filing said.

Intraco, which was founded in 1968 by the Singapore government as a trading arm to secure raw materials, mainly trades in plastic resins, provides passive fire-protection services, provides mobile-radio infrastructure management services and provides crane rental services, according to its website.