Singapore-listed Intraco (SGX: I06), a trading company, is going to acquire a 51 percent stake in the digital asset platform, MHC Singapore for a total consideration of around SG$47.2 million, according to a bourse filing on Monday.
The agreement between the two companies for the acquisition came after they initially entered into a binding head of agreement last December, but the original terms were revised later that month.
MHC offers custody and over-the-counter digital asset trading services, and its operations are mostly spaned across the Australian market. After the acquisition, the platform will incorporate all of its digital asset business under the Singapore entity.
Intraco is planning to expand its fund management offerings and implement new trading strategies, moving from the traditional market with this acquisition.
Many Conditions Involved
Despite the agreement between the two parties, there are some important conditions that MHC has to obtain for the deal to materialize. One of the key conditions is that MHC Singapore should generate at least SG$18.5 million in consolidated annual after-tax profits within 24 months of the February 7 acquisition agreement. Interestingly, this figure was lowered again when compared to the original agreement’s SG$24 million and the revised version’s amount of SG$20 million.
To finance the deal, Intraco will issue 52.5 million warrants, each of which will carry the rights to subscribe for 1 new share in the company. It will further issue 42 million new shares at 50 cents apiece, thus taking the total consideration to SG$47.2 million.
Now, Mark Carnegie and Sergei Sergienko equally hold the ownership of MHC. They will be able to exercise the warrants at any time within a five-year window after seven years from the date of issue. Neither of them will receive a seat on Intraco’s board.
The acquisition deal is now pending the approval of Intraco's shareholders.
