MAINBOARD-LISTED Grand Venture Technology (GVT)Grand Venture: JLB +2.56% on Friday (Dec 17) said it will spend S$20 million to acquire 2 companies through separate sale and purchase agreements. (see Amendment note)

 

The move will augment GVT' s capabilities and capacity in China and Malaysia, facilitate its penetration into new aerospace and medical diagnostics, as well as accelerate growth in semiconductor and life sciences businesses.

 

The precision manufacturing solutions provider will pay the sellers a mix of cash and new GVT shares, which will be issued at S$1.1619 apiece, it said in a bourse filing.

 

The company will buy J-Dragon Tech (Suzhou) Co, a China precision engineering company, for S$12.2 million - comprising S$4.2 million cash and S$8 million through the issue of about 6.9 million new shares. These new shares represent about 2.04 per cent of the enlarged share capital of the company post-transaction.

 

J-Dragon, which manufactures parts, modules and tooling for the aerospace, medical and semiconductor industries, will put GVT in a good position to tap the huge market potential and positive trends in the aerospace and medical industries, initially in China.

 

Meanwhile, GVT will pay S$7.8 million for Johor-based precision sheet metal manufacturer Formach Asia - comprising S$6.8 million in cash and S$1 million through the issuance and allotment of 860,658 new shares. The new shares represent about 0.13 per cent of the company' s enlarged share capital post-deal.

 

The proposed Formach Asia deal will supplement GVT' s manufacturing nodes, capacity expansion, and provide complementary capabilities for customers.

 

GVT chief executive Julian Ng said the Formach acquisition will also allow the company to accelerate its time to market and onboard new customers quicker.

 

The company expects to complete the proposed acquisitions by Q1 2022.

Grand Venture Technology

 

On Sept 3, Grand Venture Technology $ Grand Venture: JLB -3.01% proposed a placement of up to 10 million vendor shares and up to 25 million new shares on Catalist, with the latter receiving approval in principle from SGX on Sept 8.

 

With a placement price of S$1.14 per share, the proceeds will build on the competencies, customer base, and capacity scale of the homegrown manufacturing solutions and services provider.

 

Furthermore, in line with the company' s intention to undertake a transfer of listing to the Mainboard, as announced on Sept 1, the placement also allows the company to increase its share trading liquidity, public float and shareholder count.

 

On the back of the vendor placement of 10 million shares, executive chairman Lee Tiam Nam has reduced his deemed interest in Grand Venture Technology, decreasing his total interest to 29.37 per cent, from 35.04 per cent.

 

Mr Lee' s total interest will also effectively decrease after the issuance of the new shares upon completion of the proposed placement.

 

On Aug 10, Grand Venture Technology reported a 282.7 per cent year-on-year surge in its H1FY21 (ended June 30) net profit to S$8.5 million, while also declaring its maiden dividend.

 

GVT&rsquo s controlling shareholder Metalbank Singapore is also placing up to 10 million shares at the same price per share.

 

CGS-CIMB Securities (Singapore) has been appointed as the placement agent.

 

The announcement follows GVT&rsquo s announcement on Sept 1 on its intention to transfer its listing from the Catalist board to the Mainboard.

 

The placement price represents a discount of approximately 7.8% to the volume weighted average price 

of the shares of $1.236, for trades done on the SGX-ST on Aug 31 and Sept 1.

 

The new shares issued will represent approximately 7.6% of the enlarged issued and paid-up share capital of the company (excluding treasury shares) of 330.78 million shares.

 

In a filing to SGX on Sept 3, GVT states the proceeds raised from the placement of new shares will be deployed to build on the group&rsquo s competencies, customer base, and scale of its capacity. 

In line with the company&rsquo s intention to undertake a transfer of listing to the Mainboard. GVT says the proposed placement will also allow it to increase its share trading liquidity, public float and shareholder count.

 

Out of the estimated net proceeds of $27.5 million, 40%-45% will be utilised for expansion via mergers and acquisitions, joint ventures and partnerships, 40%-45% will be utilised for investing and enhancing operational and engineering capabilities, while 10%-20% will be used for general working capital purposes.

 

Pro forma financials based on 1HFY2021 ended June results indicate an increase in net tangible assets per share from 21.79 cents to 28.46 cents following the placement, while earnings per share decreases from 3.07 cents to 2.49 cents.

 

Metalbank currently holds 94.95 million shares representing approximately 31.05% of the existing share capital of the Company. The 10 million shares being placed by Metalbank represent approximately 3.3% of the existing share capital of GVT and will represent approximately 3% of the enlarged share capital.

 

As announced on Sept 1, GVT has been informed that the individual shareholders of Metalbank have expressed an intention to hold their shares directly and accordingly, Metalbank will be transferring its shares to the individual shareholders in proportion to their respective shareholdings in Metalbank, in consideration of a reduction in the number of shares held by the individual shareholders in Metalbank. 

 

Following the completion of the distribution, Metalbank will cease to be a shareholder of GVT.

  The transfer would expose the company to a larger investor base to give it greater access to equity and debt capital.

Fabricated metal products manufacturer Grand Venture Technologies is intending to transfer its listing to the mainboard of the Singapore Exchange (SGX), from its current listing on the Catalist board.

 

As part of the proposed transfer, Grand Venture is also exploring undertaking a placement of new ordinary shares in its share capital to increase its trading liquidity, public float and shareholder count.

 

In a bourse filing on Wednesday (Sept 1), the company said the transfer would promote its corporate and business development profile and " enhance the image and profile of the company both locally and internationally" .

 

The transfer would also expose the company to a larger investor base to give it greater access to equity and debt capital, and provide it with " greater visibility and recognition in the capital markets and amongst public investors" , it added.

 

The proposed transfer is subject to Grand Venture' s receipt of an in-principle approval from SGX, the company meeting all the relevant listing requirements and shareholders' approval.

 

Additionally, the company also said it would be transferring shares held by controlling shareholder Metalbank Singapore to its individual shareholders, after it was " informed that the individual shareholders of Metalbank have expressed an intention to hold their shares in (Grand Venture) directly" .

 

Metalbank, which currently holds 95 million ordinary shares representing 31.1 per cent of the share capital, will likely cease to be a shareholder after the transfer, Grand Venture said. The transfer to the individual shareholders will be made " in proportion to their respective shareholdings in Metalbank" .