Axington’s $405m reverse takeover deal with Hong Kong Web technology firm falls through
SINGAPORE (THE BUSINESS TIMES) – Axington’s proposed $405 million acquisition of a 60 per cent stake in a Hong Kong Web technology company has fallen through as “various” discussions failed to materialise in the past month.
In a statement on Saturday (Aug 7), the Catalist-listed firm said no agreement has been made with Delta Investment Holding Group for a further extension of the long stop date or the exclusivity period – ended Aug 7 – for the acquisition of Veivo Web Technology, which was expected to result in a reverse takeover of Axington.
Accordingly, the memorandum of understanding (MOU) inked on July 8 has lapsed and will cease to have further effect.
Under the proposed acquisition, Axington was to pay at least $30 million in cash, as well as issue and allot new shares at no less than 19 cents per share to the vendor.
Veivo Web Technology has a paid-up capital of HK$100 (S$17.41). The company’s wholly foreign-owned unit established in China is attempting to obtain full control over Beijing Ruihua Veivo Internet Technology by entering into control agreements with the shareholders of Beijing Ruihua Veivo Internet Technology.
Beijing Ruihua Veivo Internet Technology is mainly engaged in operating an instant-messaging platform, a paid-application store and a cloud-application platform in China. It also has a telecommunications and information services business operating licence.
The lapse of the MOU is not expected to have any material impact on the consolidated net tangible assets or earnings per share of Axington for the current financial year ending Dec 31, 2021.
Axington is the company linked to the Bellagraph Nova saga last year. It is now a cash company and faces the risk of delisting if it does not acquire a new business within a year, it said in a bourse filing on April 6.
Formerly a professional-services group, Axington has been mired in difficulty after Singaporean businessmen and cousins Nelson Loh and Terence Loh bought out the firm in July last year.
The Loh cousins made news in August last year with a £280 million ($526 million) bid for English football club Newcastle United under the Bellagraph Nova Group.
But their plan quickly unravelled when the media exposed inconsistencies and how they had used doctored images of themselves with former US president Barack Obama. Companies linked to the Loh cousins then came under intense scrutiny.
In December, Novena Global Healthcare Group, co-founded by the Loh cousins, was ordered to be wound up after failing to pay more than $14 million. Both cousins have also been declared bankrupt.
Axington suspended the trading of its shares on Aug 31 last year.
- With additional information from The Straits Times