Rex International Extraordinary General Meeting: Spin-Off, Share Placement, and Strategic Updates

Key Highlights from Rex International’s EGM (28 January 2026)

• Approval of Spin-Off: Shareholders overwhelmingly approved the spin-off of Rex’s commercial drone business via a reverse takeover and listing of Xer Tech AB on the Sweden Spotlight Stock Market.
• Drone Business Valuation: The drone unit was valued at US\$15 million for the RTO, exceeding Rex’s US\$12 million investment over the past four years. Rex will retain a 50.4% stake in the listed entity.
• No Payout to Shareholders: Rex shareholders will not receive a direct payout from the spin-off, but Rex will no longer need to fund the drone business. Shareholders can increase exposure by buying Xer Tech AB shares on the Swedish market.
• Strategic Refocus: Rex confirmed it will now focus primarily on its core oil & gas business, with no further diversification planned after the spin-off.
• Recent Share Placement: The Company issued 40 million shares and 40 million free warrants at a slight discount, raising capital to shore up cash reserves ahead of upcoming bond obligations.
• Financial Position: The placement was necessary due to market volatility and a blackout period for financial results. The dilution impact is limited (~3.7% of market cap), and the warrants are accretive if exercised.
• Transparency: Investors in the placement are independent, and the process complied with SGX regulations.

Detailed Breakdown of Discussions and Resolutions

Commercial Drone Business Spin-Off

The EGM centered on the proposed spin-off of Rex’s drone unit, which has matured over the past three years. The business, now commercially ready, features hybrid drones with extended flight times (2–3 hours), 5-kg payloads, and applications in surveillance, mining, powerline inspection, defence, and methane detection. The customer base and operational capabilities are steadily expanding.

The reverse takeover (RTO) values the business at US\$15 million, reflecting growth above Rex’s US\$12 million invested. Rex will retain a controlling stake (50.4%) in Xer Tech AB post-listing. Xer Tech AB will be listed on the Sweden Spotlight Stock Market, allowing investors to gain exposure internationally. No direct payout is planned for Rex shareholders, but the separation means Rex will cease funding the drone business, freeing up capital for its core operations.

The shell entity used for the RTO is not empty; it holds net tangible assets of SEK26.39 million (US\$2.8 million), including SEK16.5 million (US\$1.8 million) in cash and quoted investments. The purchase price thus reflects these assets, not just a nominal shell structure.

Profitability and Industry Focus

While the drone business is not yet profitable, its revenue is increasing, with traction in mining, powerline inspection, oil & gas, biometric & demining work, surveillance, and defence. The hybrid system and flexible payload add to its competitive edge.

The RTO involves:

• A pre-money valuation of US\$10 million for Rex Technology Investments Pte. Ltd.’s share in Xer Tech AB.
• A private placement raising US\$4.3 million.
• Conversion of US\$4.7 million of Rex’s loans into equity.

Post-RTO, Rex’s stake is valued at US\$16.8 million (based on share price at SEK5.0), subject to market fluctuations.

Strategic Direction

Rex reaffirmed its focus on oil & gas assets in Benin, Oman, Norway, and Germany. No further diversification or spin-offs are planned, signaling a strategic pivot back to its core business.

Share Placement and Funding Update

The Company recently announced the issuance of 40 million shares and 40 million free warrants at an 8.9% discount to the VWAP (but only ~3% discount to the previous day’s close due to a sharp price rise). The placement was prompted by market volatility, upcoming blackout period, and the need to strengthen cash reserves ahead of bond obligations in March 2026.

Rex secured a deferment and waiver on interest payments from bondholders. The cash injection is vital for financial flexibility, and the Board acted within the shareholder-approved mandate. The dilution effect is limited (~3.7% of market cap), and the warrants are issued at a premium, potentially accretive if exercised.

The placement investors are fully independent, with no related parties involved, and all SGX requirements were met. The placement was not related to the drone spin-off resolution.

Shareholder Vote and Conclusion

The ordinary resolution to approve the spin-off was passed with 99.96% of votes in favor, reflecting strong shareholder support.

The meeting concluded with no other business, confirming Rex’s commitment to transparency and shareholder engagement.

Potential Price Sensitive Points for Investors

• Successful Spin-Off: The drone business’s spin-off and listing could unlock value and remove funding burdens from Rex, potentially improving the Company’s financial outlook.
• Strategic Refocus: Rex’s commitment to its oil & gas core may appeal to investors seeking clarity and focus, and could affect the Company’s valuation.
• Capital Raising: The recent share placement improves liquidity, addresses bond obligations, and signals proactive cash management.
• Valuation Uplift: Rex’s stake in Xer Tech AB is valued higher post-listing, offering potential upside.

Disclaimer

This article is for informational purposes only and does not constitute investment advice. Investors are advised to conduct their own research and consult with financial advisors before making any investment decisions. The information is based on official meeting minutes and may be subject to further updates or clarifications by Rex International Holding Limited.

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