Asian Micro Holdings EGM Q&A: Key Points and Implications for Investors

Overview

Asian Micro Holdings Limited (“AMHL” or “the Company”) held its Extraordinary General Meeting (EGM) on 17 October 2025, releasing a detailed summary of questions and answers addressing crucial developments. The discussions focused on debt capitalisation, share issuance to employees, and the implications for control and shareholder value. These actions are significant and may have material impact on the Company’s financial position and share price.

Key Developments and Shareholder Matters

1. CEO Victor Lim’s Status as Creditor

• Background: Mr. Lim Kee Liew @ Victor Lim, CEO and Group Managing Director, became a creditor due to accrued but unpaid salaries. Instead of cash payment, these amounts were recognised as liabilities, making Mr. Lim a creditor.
• Financial Impact: The conversion of this debt into equity (Conversion Shares) is intended to preserve the Group’s cash position, freeing up funds for operations and contingencies, rather than debt servicing.
• Additional Support: As a show of confidence, Mr. Lim extended an interest-free loan of RM5,000,000 to the subsidiary Leverage Income Sdn. Bhd. for a property development project in Penang, Malaysia.

2. Debt Capitalisation & Employee Share Issue: Control Implications

• Take-Over Code: The issuance of new shares due to debt capitalisation and employee bonuses was scrutinised for takeover implications under the Singapore Code on Take-overs and Mergers.
• Outcome: Mr. Victor Lim, Mdm. Leong Lai Heng, and their concert parties already hold more than 50% of the Company’s shares. Therefore, the proposed issuance will not trigger a mandatory takeover offer as per Rule 14.1 of the Code.

3. Share Issuance Price: Valuation and Fairness to Shareholders

• Conversion Price: New shares for debt conversion and employee bonus settlement will be issued at S\$0.0010 per share.
• Price Sensitivity: This price was based on the Volume Weighted Average Price (VWAP) of trades on the Catalist Board on 3 July 2025, the date the agreements were signed and announced.
• Shareholder Impact: The shares have been trading above the conversion price, raising fairness concerns. However, the Company explained that the price was set at arm’s length, reflecting negotiations, financial condition, and the desire to support future development while alleviating the debt burden.
• Quantum: The debt capitalisation will result in the issuance of 945,622,000 new shares, while 20,680,000 new shares will be issued to settle employee bonuses.
• Potential Dilution: Existing shareholders should note the substantial increase in issued shares, which may affect the share price and their proportional ownership.

Investor Takeaways

• Material Share Issuance: The issuance of nearly one billion new shares at S\$0.0010—below current market prices—could be price sensitive and may exert downward pressure on the share price due to dilution.
• Control Remains Unchanged: Despite increased equity for Mr. Lim and concert parties, control remains consolidated, with no takeover obligation triggered.
• Financial Flexibility: Debt conversion and new equity allow AMHL to preserve cash, potentially supporting future growth and reducing financial risk.
• Confidence from Management: The CEO’s willingness to convert salary and extend loans signals commitment and confidence in the Group’s prospects.

Conclusion

The developments discussed at the EGM are significant and potentially price sensitive, especially given the large volume of new shares issued at a deep discount to market price. Investors should closely monitor AMHL’s share price, ownership structure, and future announcements for further impact.

Disclaimer

This article is for informational purposes only and does not constitute investment advice or a recommendation to buy, sell, or hold any securities. Investors should conduct their own due diligence and consult a financial advisor before making investment decisions.

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