Executive Summary

Aspial Corporation Limited has proposed, together with JK Global Investment Pte. Ltd. (KWMCo), to acquire all the issued ordinary shares of AF Global Limited (AFGL) not already held by the consortium, via a scheme of arrangement. The deal values the remaining shares at S\$0.11 per share, and the Independent Financial Adviser (IFA), Evolve Capital Advisory, has delivered its opinion on the transaction for the benefit of independent directors and shareholders.

The IFA concludes the terms are on normal commercial terms and not prejudicial to Aspial and its minority shareholders, and that the acquisition is in the interests of all shareholders.

Key Points from the IFA Report

• The proposed acquisition is by a 50/50 consortium between Aspial and KWMCo, via a special purpose vehicle, AFG Investment Pte. Ltd.
• The offer is for all shares not already held by Aspial or KWM (the “Excluded Shares”). The total consideration for the scheme shares is approximately S\$31.76 million.
• The offer price is S\$0.11 per share, all cash.
• The IFA identified several key factors in its assessment:
  • All Scheme Shareholders receive the same terms.
  • The rationale for privatisation includes greater management flexibility, no need for equity fundraising, and cost savings from delisting.
  • AFGL shares are highly illiquid, making this offer a realistic exit opportunity for minority shareholders.
  • Financials: The offer represents a discount to NAV (14.26 cents) and revalued NAV (13.74 cents), but a significant premium to recent market prices and trading averages.
  • Valuation multiples offered (P/NAV and EV/EBITDA) are above comparable SGX-listed peers.
  • There are no alternative or competing offers, and with Aspial and KWM holding ~73% together, a rival bid is very unlikely.
• The IFA’s view: The transaction is on normal commercial terms and is not prejudicial to minority shareholders; the offer price is fair in the current context.

Details Likely to Be Price-Sensitive for Investors

• Offer Price and Premiums: The S\$0.11 per share offer represents a premium of 14.6% over the last trading day price before the announcement, and significantly higher premiums over 1-, 3-, 6-, and 12-month volume-weighted average prices (ranging from 30% to 46%).
• Discount to Book Value: The offer is at a 22.9% discount to the latest reported NAV and a 19.9% discount to revalued NAV. However, the IFA notes that asset sales or liquidation to realise NAV may not be practical or achievable at book values.
• Share Liquidity: Trading volume in AFGL shares is extremely low, making it difficult for minority shareholders to exit at current market prices. The offer provides a viable exit opportunity.
• Privatisation Rationale: The group has not raised equity on SGX since 2010 and sees no need to remain listed, especially given continued listing costs and regulatory compliance burdens.
• Valuation Comparison: The P/NAV (0.77x) and P/RNAV (0.80x) implied by the offer are above the mean and median for comparable SGX-listed property and hotel groups, which trade between 0.17x and 0.67x P/NAV.
• Recent Precedent Transactions: The offer’s premium to market is below the average for recent SGX privatisations and delistings, though within the range for such deals.
• No Competing Offers: No other parties have emerged to make a competing bid, and the controlling shareholders’ large stake makes this unlikely.
• Financial Performance and Outlook:
  • AFGL’s business has shown improvement in hospitality but remains exposed to macroeconomic and regional tourism risks.
  • The group reported a net loss attributable to shareholders in FY2024, but returned to profitability in 1H2025.
  • Net assets have declined slightly, and ongoing asset optimisation and cost control are a key focus for management.
• Scheme and Delisting Impact: On completion, AFGL will be delisted, and all Scheme Shareholders will lose exposure to any potential future upside or corporate actions.
• Cost Savings: Delisting is expected to save significant compliance and listing-related costs for the group, which can be redirected to business operations.

Comprehensive Financial and Valuation Analysis

• Historical Financials (FY2022–1H2025):
  • Revenue grew from S\$16.2m in FY2022 to S\$31.4m in FY2024, primarily due to the recovery in hospitality (especially Holiday Inn Resort Phuket).
  • Net profit attributable to shareholders was S\$2.6m in FY2023 but a loss of S\$2.6m in FY2024, rebounding to a profit of S\$1.4m in 1H2025.
  • Net assets as at 30 June 2025: S\$208.1m, with NAV per share of 14.26 cents.
  • Major assets include Thai, Vietnamese, and Laotian hotels, joint ventures, and investment properties. A recent asset disposal (Rawai Disposal) boosted cash flows.
  • Cash and equivalents stood at S\$26.7m (30 June 2025), with low leverage.
• Valuation Multiples vs Peers:
  • P/NAV of 0.77x (offer) vs peer average 0.44x; P/RNAV of 0.80x (offer) vs peer average 0.44x.
  • EV/EBITDA of 21.23x (offer) vs peer range 7.96x–19.97x.
  • PER is not meaningful due to recent losses.
• Premiums to Historical Prices:
  • Offer price is above almost all historical trading prices (except a brief period), with premiums up to 46% over 6-month averages.
  • Trading liquidity is extremely thin, with average daily volume under 0.02% of issued shares.
• Recent Privatisation Comparisons:
  • Offer premium to last traded price (14.6%) is below the mean (33.4%) and median (31.7%) for precedent SGX transactions.
  • P/NAV is within the precedent range (0.7x–5.9x) but below the mean (1.8x).
• Other Considerations:
  • There are no major contingent liabilities, undisclosed impairments, or pending litigations that would materially affect NAV.
  • There are no plans for material asset sales or change in business direction post-offer.
  • All shareholders receive equal treatment under the Scheme.

Key Takeaways for Investors

• If the scheme is approved: Minority shareholders will be bought out at S\$0.11/share and AFGL will be delisted.
• Share price is likely to converge to the offer price as the deal progresses due to the lack of competing bids and the high probability of success.
• Potential Upside Risk: If a competing offer unexpectedly emerges, share price may rise further. However, this is considered very unlikely given the control structure.
• Potential Downside Risk: If the scheme fails (low probability), share price may fall back towards historical averages, which are significantly below the offer price.
• Long-term holders should weigh the certainty of cash exit vs. potential future upside if the group remains listed (very unlikely).