THE liquidator of Reenova Investment Holding has said the company is &ldquo not in a financial position to make an exit offer&rdquo in accordance with SGX listing rules.

 

In a bourse filing on Saturday (Dec 9), the liquidator, Luke Furler, noted that Reenova &ndash which had been issued a notice of delisting from SGX last month &ndash currently does not have sufficient funds to settle its creditors&rsquo claims in full.

 

The liquidator added it has written to Reenova&rsquo s largest shareholder, who holds 14.7 per cent of the company&rsquo s total issued and paid-up share capital on whether it intends to make an exit offer to the remaining shareholders of the company.

 

The liquidator has not received a response from the largest shareholder as at Saturday.

 

Reenova has been on the financial watch list since December 2019. It requested for a trading suspension in November 2020 as it was unable to demonstrate its ability as a going concern.

 

The company was placed under judicial management in August 2022, and the judicial managers subsequently applied for the winding up of the company, which was approved by the court in August this year.

 

Venture Capital, has filed an application in the High Court to place the company under judicial management.

 

JW Venture Capital also proposed to appoint Luke Furler and Ellyn Tan of independent advisory firm Quantuma (Singapore) as as &ldquo joint and several judicial managers to manage the affairs, business and property of the company&rdquo , according to the filing.

 

Reenova said it currently owes JW Venture Capital a sum of approximately S$804,545.50.

 

The date of the hearing for the judicial management has yet been fixed by the court, while the appointment for interim judicial managers has been fixed for hearing at 10 am on Jul 15, 2022.

 

Trading of Reenova shares has been suspended since Oct 20, 2020.

SUSPENDED stock Reenova Investment Holding on Monday (Jun 20) was slapped with a compliance notice from bourse regulator Singapore Exchange Regulation (SGX RegCo), just days after an announcement that the company&rsquo s senior executive and director left as the company is &ldquo not able to run functionally&rdquo .

 

Following the departures of the duo &ndash lead independent director Lee Ka Shao and group financial controller and company secretary Kwok Kai Ming &ndash SGX RegCo noted that Reenova&rsquo s nominating committee will have only 2 members. 

 

The two resigned shortly after the death of the company&rsquo s executive chairman and executive director Chen Tong. Following his demise, Reenova is now under the leadership of its independent directors. 

 

SGX RegCo said following the departures, Reenova&rsquo s board now only has 2 independent non-executive directors &ndash Lin Chen Hsin and Eddy Lim. 

 

Under the compliance notice, Reenova is required to seek the approval of the exchange for any changes in the composition of the board, including the cessation, appointment or reappointment of any director or executive officer. 

 

In addition, the company&rsquo s independent directors are required to report directly to SGX RegCo, and provide full information regarding the appointment of a liquidator or disposal of assets of the company.

 

The independent directors are also required to provide full assistance for the purpose of updating the market and in relation to an exit offer in the event of any potential delisting of the company.

 

The bourse regulator said Reenova&rsquo s board should ensure that the company&rsquo s assets are properly safeguarded, particularly the rare earth mine in Madagascar and the collection of significant other receivables advanced to its joint-venture partners.

 

Reenova had terminated an amended and restated sale-and-purchase agreement in relation to the proposed acquisition of 3DOM Singapore, a subsidiary of Japanese battery maker 3DOM. 

 

If successful, the acquisition would have resulted in a reverse takeover of Reenova. The company would have had to acquire 3DOM Singapore for 75-80 per cent of its valuation, which shall not be lower than US$1 billion, according to exchange filings.

 

SGX RegCo warned that failure to comply with the requirements imposed will be deemed a contravention of listing rules.

A SENIOR executive and a director of Reenova Investment Holding have left the firm, saying they have done so because the company is &ldquo not able to run functionally&rdquo , according to bourse filings on Wednesday (Jun 15).

 

This follows the death of the company&rsquo s executive chairman and executive director Chen Tong on Saturday at age 57. He had taken up the roles in the company, previously known as ISR Capital, in October 2016, and was primarily involved in the oversight and management of the group&rsquo s investments and corporate developments he also formulated its overall business and corporate policies and strategies, says the company&rsquo s website.

 

&ldquo With the passing of Mr Chen Tong, the executive chairman and the only executive director of the Company, the company remains under the leadership of independent directors,&rdquo said the company in a statement on Monday.

 

The website listed Lee Ka Shao and Lin Chen Hsin as the company&rsquo s only independent non-executive directors.

 

But on Tuesday, Lee, 52, resigned, saying he was unable to discharge his responsibilities as an independent director &ldquo because the company is not able to continue functioning as an entity&rdquo . Lee, who also chaired the audit committee, took up the role in January 2017.

 

Kwok Kai Ming, group financial controller and company secretary, was the next to submit his resignation, citing a similar reason. The 63-year-old was appointed to these roles only 2 months ago.

 

Shortly after Reenova announced Chen&rsquo s death on Monday, the company also published a disclaimer of opinion issued by its independent auditor RT LLP. In the report, auditor Ravinthran Arumugam noted that the group incurred a loss of S$25.7 million in the 2021 financial year, recorded net operating cash outflows of S$1.7 million and net current liabilities of S$6.1 million.

 

As at last Dec 31, the company&rsquo s cash and cash equivalents stood at S$15,160, indicating that &ldquo a material uncertainty exists with a pervasive impact that may cast significant doubt on the Group&rsquo s ability to continue as a going concern&rdquo , Arumugam said.

 

Separately, the company said on Tuesday that it was terminating an amended and restated sale-and-purchase agreement in relation to the proposed acquisition of 3DOM Singapore, a subsidiary of Japanese battery maker 3DOM.

 

This is due to the &ldquo non-fulfilment of some conditions required for the final extension of time&rdquo granted by the Singapore Exchange Regulation (SGX RegCo) to Reenova. The grace period was to have been for the company to make a submission in relation to the proposed acquisition, and to resume trading of its shares no later than July 31.

 

The proposed acquisition, if successful, would have resulted in a reverse takeover of Reenova. The mainboard-listed company would have had to acquire 3DOM Singapore for 75-80 per cent of its valuation, which shall not be lower than US$1 billion, according to earlier exchange filings.

 

That was not the first time 3DOM Singapore has been party to a potential transaction that involves a reverse takeover.

 

3DOM is now hoping to list on the Nasdaq through a special-purpose acquisition company (SPAC), it said on a notice on its website.

 

Trading of Reenova shares has been suspended since Oct 20, 2020.

 

Reenova Investment Holding has taken out a $350,000 loan costing 12% a year to fund its planned reverse takeover of battery company 3DOM (Singapore).

 

The lender, JW Venture Capital, is wholly-owned by one Chiu Kim Wah (Zhao Jianhua) and its director is Frank Tay Zhi Cheng (Zheng Zhicheng).

 

Besides the 12% annual interest, upfront, there&rsquo s a late interest of 36% per annum.

Reenova, under executive chairman Chen Tong, has struggled to commercialise a rare earth concession it holds indirectly in Madagascar.

 

If the RTO is completed, Reenova will be dominantly controlled by 3DOM Singapore&rsquo 3DOM Inc, which claims to possess capabilities to make lithium-ion batteries.

 

The US$1 billion RTO deal was announced last November. 

3DOM (Singapore) had wanted to RTO via another SGX listed company, restaurant operator Chaswood Resources.

 

Reenova has pledged various securities for the loan, including first priority over 300 million Reenova shares now held by Chen, who is acting as a personal guarantor.

 

In addition, there&rsquo s also the interest of 100% of Reenova Global which holds a 75% stake in Reenova Holding (Mauritius), which in turn owns 100% of Reenova Rare Earth (Malagasy) S.A.R.L.U, that holds the rare earth concession.

 

To fund the RTO, Reenova had raised funds from other sources previously. 

 

Last November, it issued a $1.2 million one-year convertible loan to Evolve Capital Management Fund, carrying an interest of 6% per year and a conversion price of 0.07 cent. 

 

When fully converted, Evolve Capital will hold just over 20% of Reenova.

 

Reenova Investment Holding&rsquo s rare earth adventure, which has put the company in the news since 2016, is poised to end.

 

The company, which used to be called ISR Capital, is selling its 75% stake in a tantalum concession in Madagascar to an entity called GRM Group for US$6 million. 

 

No further information is provided on the buyer in the company&rsquo s announcement on Nov 10.

 

The company paid $4.5 million for the stake, sharply reduced from an initial price tag of $40 million. 

 

This follows a series of actions on the part of SGX RegCo questioning the validity of the valuation of the concession. 

 

Two valuers had each accorded a value of more than US$1 billion, sending the share price of ISR Capital then surging by around 4,000% within months. 

 

After the company was compelled to commission another valuation, a more sober number of US$48 million was concluded.

 

Reenova, under new controlling shareholder, executive chairman Chen Tong, explains that the pandemic had led to prolonged border closures of the African island nation. 

As a result, it wasn&rsquo t able to properly go ahead with pilot production, much less commercialising the concession.

 

It was also unable to raise new funding from other investors despite &ldquo best efforts&rdquo .

As such, by selling now, Reenova can monetise its investment value &ldquo for the benefit&rdquo of its shareholders.

 

Upon completion of the divestment, Reenova will become a cash company and will &ldquo have the flexibility to explore and pursue viable business opportunities.&rdquo