Vividthree Holdings Announces Major Shareholder Changes and New Placement: Is Control Shifting?

Key Highlights

• Termination of Share Disposal Agreement: The proposed sale of Vividthree shares by controlling shareholder mm2 Asia Ltd. to Hildrics Asia Growth Fund VCC has been terminated.
• New Share Placement: Vividthree to issue 137,400,000 new shares (29.61% of current capital) to Hildrics Asia Growth Fund VCC at S\$0.01615 per share, raising S\$2.22 million.
• Potential Change in Control: On completion, Hildrics will become the largest shareholder with a 29% stake, possibly shifting control.
• Major Discount: Placement price is at a 15% discount to the recent traded price, signaling potential valuation concerns or urgency for funds.
• Shareholder Approval Required: Placement subject to EGM approval; Hildrics and its associates will abstain from voting.
• Financial Impact: Net tangible assets per share expected to rise from S\$0.0059 to S\$0.0082; loss per share to decrease due to higher share base.
• Use of Proceeds: Funds to strengthen Vividthree’s financial position, improve working capital, and pursue new projects.
• Loan Set-Off: Part of placement proceeds will be used to settle a S\$417,000 loan (plus interest) from Hildrics; the rest will be paid in cash.
• Further Announcements: EGM circular, progress updates, and details of placement to be released in due course.

Important Details for Shareholders

The Board of Vividthree Holdings Ltd. has announced a significant development: the termination of a previous agreement for mm2 Asia Ltd. (current controlling shareholder) to sell its stake to Hildrics Asia Growth Fund VCC. This move cancels a prior plan for a change in ownership via a direct share sale.

In a new twist, Vividthree is now proposing to issue 137,400,000 new shares to Hildrics Asia Growth Fund VCC—already a substantial shareholder. This placement will be priced at S\$0.01615 per share, notably 15% below the prior day’s VWAP, suggesting either urgency for capital or a discount to attract investment.

If approved and completed, this deal will see Hildrics’ stake jump from 7.98% to 29% of Vividthree’s enlarged capital, overtaking mm2 Asia Ltd. (whose holding will drop to 23.06%). This is a potential transfer of controlling interest, which could bring strategic changes, new direction, or even impact future corporate actions and management.

Shareholder Actions and Risks

• EGM Approval Needed: The placement will only proceed with the approval of shareholders at an upcoming Extraordinary General Meeting (EGM). Hildrics and its associates cannot vote on this resolution.
• Price Sensitivity: The discounted placement price and large issuance may pressure the share price in the short term, while the prospect of new leadership or direction could affect longer-term value.
• No New Directors: No new board members are proposed in connection with this placement.
• Impact on Existing Convertibles: Adjustments may be needed for outstanding S\$700,000 in convertible bonds due to the enlarged share base.
• Transparency on Proceeds: Vividthree commits to regular updates on how funds are used, especially for working capital and project spending.

Background on Hildrics Asia Growth Fund VCC

Hildrics Asia Growth Fund VCC is a private equity fund managed by Hildrics Capital Pte. Ltd., with extensive experience in financing Southeast Asian SMEs. In addition to its stake in Vividthree, Hildrics holds minor shares in UnUsUaL Limited (a mm2 subsidiary) and has financial dealings with mm2 and its affiliates, including convertible bonds and loans.

Financial Impact

• Net Tangible Assets (NTA): NTA per share expected to rise from S\$0.0059 to S\$0.0082 post-placement.
• Loss Per Share: Loss per share will decrease from S\$0.0233 to S\$0.0180 due to a larger share base.
• Share Capital: Total issued shares will rise from 464 million to 601 million. Share capital increases from S\$18.46M to S\$20.68M.

Key Risks and Trading Caution

Shareholders and investors are urged to exercise caution. There is no guarantee the placement will proceed, and the approval process and subsequent changes could lead to volatility. The transfer of control, discounted placement price, and potential dilution are all price-sensitive factors that could move the stock.

Vividthree will provide further details and updates, including the EGM notice and outcome, which are likely to be closely watched by the market.

Conclusion

This announcement represents a potentially transformational period for Vividthree Holdings, with a possible shift in control, significant capital raising, and new shareholder dynamics. Retail investors should monitor developments closely, review company announcements, and consider the implications of dilution, new capital, and strategic changes before making investment decisions.

Disclaimer

This article is for informational purposes only and does not constitute financial advice or a recommendation to buy or sell securities. Investors should conduct their own due diligence and consult with professional advisers before making investment decisions. The information herein is based on company announcements and may be subject to change.

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