Matex International Limited Announces S\$4.16 Million Convertible Notes Issuance to Fund Growth and Strategic Ventures

Key Highlights

• Proposed Issuance of Convertible Notes: On 23 January 2026, Matex International Limited entered into a Subscription Agreement with Ascentas Capital Management Limited and Li Baohua to raise S\$4,158,000 through the issuance of unsecured convertible notes.
• Conversion Terms: The notes are convertible into up to 210,000,000 new ordinary shares at a conversion price of S\$0.0198 per share, representing a 10% discount to the last traded price of S\$0.022 prior to the trading suspension.
• Interest Rate: The notes carry an interest of 6% per annum, which increases to 8% per annum if SGX-ST approval for the listing of the conversion shares is not obtained within six months.
• Use of Proceeds: The estimated net proceeds (after S\$53,000 expenses) of S\$4.1 million will be allocated 50% to working capital and 50% to investment in new business opportunities, specifically in commodities trading and strategic investments in high-growth companies.

Detailed Terms of the Issuance

• Commitment Period: 18 months from the Subscription Agreement date, with maturity and redemption of the notes in cash at the end of the period if not converted.
• Conversion Rights: Noteholders may convert the principal amount (but not accrued interest) into fully paid-up, unencumbered shares anytime before maturity. Accrued interest will be paid in cash upon conversion.
• Adjustment Events: The conversion price and share numbers are subject to adjustment for corporate actions such as share consolidations, subdivisions, capitalisation issues, or rights offers.
• Events of Default: The agreement details several events of default, including breaches of obligations, insolvency events, or if it becomes unlawful for the company to perform its obligations. Upon default, noteholders can demand immediate redemption at the principal amount plus accrued interest.

Strategic Rationale and Potential Impact

• Financial Position: Matex recorded a comprehensive loss of approximately S\$2.35 million for the first half of 2025, substantially reducing its working capital.
• Growth Plans: The group plans to ramp up its main business and expand into commodities trading and strategic investments, following shareholder approval on 13 January 2026.
• Working Capital Needs: The new ventures are expected to increase working capital requirements, which this fundraising directly addresses.
• Shareholder Approval and Mandate: The conversion shares will be issued under the 2025 AGM general mandate, with the maximum potential dilution from this issuance not exceeding mandate limits. No controlling interest will be transferred.

Details of Subscribers

• Ascentas Capital Management Limited: A Hong Kong-based investment company, managed by sole shareholder/director Mr. Lam Yee Yin Dickson.
• Li Baohua: A Chinese businessman.
• Each will subscribe S\$2,079,000, convertible into 105,000,000 shares, representing 14.47% each of the enlarged share capital, but not resulting in a change of control.
• Introduction: Both subscribers were introduced via Nanyang Commercial Management Pte. Ltd., a controlling shareholder, but are not related parties and are not acting in concert.

Potential Share Price Impact and Shareholder Considerations

• Potential Dilution: If fully converted, 210,000,000 new shares will be issued, increasing the total share base to 725,698,153 (on a post-Nanyang Subscription basis). This may result in dilution of existing shareholdings.
• Improved Liquidity and Capital Position: The capital injection is expected to strengthen Matex’s cash position, support its diversification, and potentially enhance long-term shareholder value.
• Pro Forma Financial Effects: Based on pro forma calculations, the company’s paid-up capital would rise from S\$25.85 million to S\$34.17 million; NTA per share will decrease slightly (due to dilution) but total NTA increases from S\$9.05 million to S\$16.88 million; loss per share improves from (0.73) to (0.43) cents, as the capital base expands.
• No Prospectus Required: The issuance is made under an exemption from prospectus requirements, limiting public information but expediting the fundraising.
• No Placement Agent or Commission: The company will not pay any introducer fees or commissions, preserving the net proceeds.

Directors’ Statement

The board believes the company’s current capital resources are adequate for its present needs but sees the issuance as crucial for meeting upcoming working capital and investment requirements in line with expansion plans.

Shareholding Structure Changes

No directors hold shares as of now. The new investors will each become significant shareholders but not controlling shareholders.

Investor Takeaways

• The fundraising supports Matex’s recovery and expansion into new business areas after recent losses, providing a critical cash infusion.
• The conversion price set at a discount may be viewed as attractive by the new investors but may weigh on the traded price until the funds are deployed effectively.
• The entry of new strategic investors and the company’s pivot to new businesses could serve as catalysts for future growth, but also carry execution risks.
• Shareholders should monitor company announcements for updates on business execution and the use of proceeds, as well as any adjustment events that may affect future dilution.

Disclaimer

This article is for informational purposes only and does not constitute investment advice. Investors should conduct their own due diligence or consult a professional adviser before making any investment decision. The author and publisher are not liable for decisions made based on this summary.

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