[SINGAPORE] Mainboard-listed media company mm2 Asia on Wednesday (May 28) entered into a sale and purchase agreement with private equity fund Hildrics Asia Growth Fund VCC to dispose of 21.02 per cent of its stake in subsidiary Vividthree Holdings for S$1.7 million.
mm2 Asia currently holds about 29.9 per cent of the total issued and paid-up share capital of Vividthree.
Following the proposed disposal, the company will hold about 8.9 per cent of Vividthree’s total issued and paid-up share capital, and Vividthree will cease to be an associated company of the group.
Vividthree was established in 2006 and is listed on the Catalist board of the Singapore Exchange (SGX). It is principally involved in the business of digital content production specialising in virtual reality, visual effects and computer-generated imagery.
The buyer Hildrics Asia Growth Fund VCC is a private equity fund that provides growth capital to mid-tier South-east Asian enterprises with established track records and growth potential.
It is managed by Hildrics Capital, a Singapore-based fund management company specialising in originating proprietary deals across all industries in Singapore and South-east Asia.
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The firm focuses on long-term capital appreciation through equity and equity-related investments and has a long-term interest aligned with the management of its portfolio companies, said mm2 Asia in a bourse filing.
mm2 Asia noted that the proposed disposal “is in the best interests” of the group, as it gives the company an opportunity to realise the value of the sale shares, enhance the group’s liquidity and improve its overall financial position and flexibility.
The proceeds from the proposed disposal will be used to repay the group’s outstanding liabilities.
Based on the latest announced unaudited consolidated financial statements of mm2 Asia for the financial period ended Sep 30, 2024, the book value of the sale shares is an estimated S$2.05 million.
Meanwhile, the net tangible asset value of the sale shares, excluding non-controlling interests, is an estimated S$1.9 million. The net loss attributable to the sale shares is about S$176,812.
mm2 Asia said it did not conduct an independent valuation on the sale shares.
Based on the volume-weighted average price of Vividthree’s S$0.0197 per share for trades transacted on the Catalist of the SGX on May 28, which was the last full market day preceding the date of the sales and purchase agreement, the open market value of the sale shares is approximately S$1.9 million.
The consideration for the proposed disposal is S$0.01734 per sale share, which amounts to an estimated S$1.7 million. Hildrics Asia Growth Fund VCC will pay this in cash.
Based on the book value of the sale shares, there is a deficit of approximately S$357,068.06 of the consideration, mm2 Asia noted.
Based on mm2 Asia’s financial statements for the period ended Sep 30, the loss on disposal of the sale shares amounts to approximately S$2.8 million.
The proposed disposal is expected to be completed on May 30, 2025, upon fulfilment of all conditions.
Assuming the proposed disposal was completed on Mar 31, 2024, the group’s net tangible assets per share would be 0.016 cent, compared with 0.017 cent before the disposal.
Meanwhile, assuming the proposal disposal was completed on Apr 1, 2024, its loss per share would be 0.003 cent, against a loss of 0.002 cent before the disposal.
Shares of mm2 Asia last closed at S$0.009 on Tuesday.
