KUALA LUMPUR (July 1): Vivocom Intl Holdings Bhd has entered into a heads of agreement (HOA) with Strattner Alternative Credit Fund LP for the latter to invest up to US$350 million (about RM1.45 billion) for subscription to the former’s shares.
Strattner Alternative Credit Fund is part of US-listed Strattner Group Corp, which is involved in alternative investments.
In a filing with the bourse, Vivocom, which is involved in construction, aluminium fabrication and engineering services, said the HOA entails that Strattner will be purchasing up to US$350 million, or in aggregate not more than 9% of the issued share capital of the company, from time to time over a period of 18 months from the date of signing the definitive agreement.
If such issuance of shares could cause a delisting, it said the maximum common share issuance shall first be approved by its shareholders.
The group said the execution of the HOA is not subject to the approval of its shareholders, although the proposed issuance of subscription shares in Vivocom are subject to approvals from Bursa Securities, Vivocom’s board and shareholders, as well as any other relevant authorities.
In a statement, Vivocom and Strattner said they view this exercise as a starting point of a long-term strategic partnership to advance Vivocom’s growth via merger and acquisition (M&A) activities, as well as to fund its projects in construction, property development and mineral trading.
“We are proud yet humbled by the vote of confidence shown by Strattner Group in Vivocom by their commitment to investing in the company for the long term.
“The timing is perfect as we seek to grow via the M&A route and acquire companies with game-changing and disruptive strategies in their businesses,” said Vivocom chief executive officer (CEO) Datuk Seri Chia Kok Teong.
He added that the proceeds raised from the investment will also be used as working capital for its sand and mineral trading business.
“Strattners is proud and delighted to be making a long-term investment in Vivocom as we believe the company has tremendous growth potential under the visionary and passionate leadership of Datuk Seri Chia,” said Strattner chief executive officer (CEO) Dr Timo Strattner.
It is noted that the total proposed investment far exceeds Vivocom’s market capitalisation of RM466.82 million.
For the third quarter ended March 31, 2021 (3QFY21), Vivocom posted a net profit of RM655,000, along with RM21.89 million in revenue, which was attributed to contributions from its construction segment.
There was no comparable quarter as the group changed its financial year end from Dec 31 to June 30.
At the time of writing, the counter had fallen 4.5 sen or 7.89% to 52.5 sen, with some 69.94 million shares done.