KUALA LUMPUR, Malaysia (July 1): Vivocom Intl Holdings Bhd and Strattner Alternative Credit Fund LP have signed a heads of agreement (HOA) for the latter to invest up to US$350 million (about RM1.45 billion) in the former’s shares. Strattner Alternative Credit Fund is a subsidiary of Strattner Group Corp, a company that specializes in alternative investments and is publicly traded in the United States.
Vivocom, which is involved in construction, aluminum fabrication, and engineering services, said in a filing with the bourse that the HOA entails Strattner purchasing up to US$350 million, or not more than 9% of the company’s issued share capital, from time to time over an 18-month period from the date of signing the definitive agreement.
If the issuing of such shares could result in the delisting of the company, it said that the maximum common share issuance must first be approved by the company’s shareholders.
The HOA is not subject to shareholder approval, according to the company, but the proposed issuing of subscription shares in Vivocom is subject to clearance from Bursa Securities, Vivocom’s board of directors and shareholders, as well as any other applicable authorities.
Vivocom and Strattner said in a statement that they see this as the start of a long-term strategic relationship to help Vivocom grow through merger and acquisition (M&A) activities, as well as support its construction, property development, and mineral trading projects.
“We are both proud and humbled by Strattner Group’s vote of confidence in Vivocom and their commitment to long-term investment in the firm.”
“The timing is ideal as we want to expand through M&A and acquire companies that have game-changing and innovative strategies in their businesses,” said Vivocom CEO Datuk Seri Chia Kok Teong.
He also stated that the investment earnings will be used as operating capital for the company’s sand and mineral trading operations.
“Strattners is thrilled and delighted to be making a long-term investment in Vivocom since we believe the firm has significant development potential under Datuk Seri Chia’s imaginative and committed leadership,” Strattner CEO Dr Timo Strattner stated.
The total proposed investment is much greater than Vivocom’s current market capitalization of RM466.82 million.
Vivocom reported a net profit of RM655,000 and revenue of RM21.89 million for the third quarter ended March 31, 2021 (3QFY21), which was attributed to contributions from its construction division.
There was no comparable quarter because the company’s fiscal year ended on June 30 instead of December 31.
The counter had lost 4.5 sen, or 7.89 percent, to 52.5 sen at the time of writing, with 69.94 million shares traded./n
