SINGAPORE, Sept. 4, 2014 /PRNewswire/ — A U.S. company pending quotation on an over-the-counter bulletin board ("OTCBB") intends to acquire a wholly owned instant messaging ("IM") software subsidiary of Singapore eDevelopment Ltd. ("SeD" or the "Company") for US$700 million in shares and bonds, SeD announced today.
SGX Catalist-listed SeD said the proposed transaction will allow HotApps International Pte. Ltd. ("HotApps") to tap the U.S. capital market and facilitate the launch of the HotApp IM and e-commerce mobile application in North and South America. SeD acquired HotApps last month and plans to launch it in 24 countries, including Singapore, before the year-end.
SeD has entered into a term sheet for OTCBB-bound Fragmented Industry Exchange Inc. ("FIE") to acquire HotApps for 1.0 million new shares at US$10 each (US$10 million) and US$690 million worth of zero-coupon perpetual bonds (with a conversion price of US$10 each). The OTCBB is an electronic inter-dealer quotation system facilitated through the Financial Industry Regulatory Authority of the United States.
The proposed transaction, upon completion, will result in SeD owning 99.84% of FIE assuming full conversion of the bonds and the exercise of a call option (assuming FIE does not issue any new shares). FIE will in turn hold HotApps as a wholly owned subsidiary.
SeD has identified Information Technology — led by companies such as HotApps — and construction/international property development as the two engines which will propel corporate recovery and growth.
The Company said the US$700 million consideration was derived on a willing-seller, willing-buyer basis after taking into account SeD’s internal analysis of the economic potential of HotApps which has enhanced features that will differentiate it from existing players.
To ensure proper treatment for public reporting purposes, prior to the completion of the transaction, FIE is expected to commission its own independent valuation of HotApps.
"North America is a market which has not only embraced such technologies but has a pool of investors who are willing to invest in such applications," said Mr. Chan Heng Fai, SeD’s Chief Executive Officer of SeD and its single-largest shareholder.
"This transaction will bring with it two significant benefits. The first is that HotApps will be able to tap the U.S. capital markets to fund its growth. The second is that we will be able to accelerate the launch of HotApp in the U.S. and Latin American markets," said Mr. Chan.
Apart from its acquisition of HotApps, SeD recently entered into a memorandum of understanding with cloud-based communication solutions provider, CloudTel Pte. Ltd., which owns the world’s first 10-inch desktop interactive cross-platform smart terminal running on the Android operating system poised to replace traditional desktop phones.
SeD is completing the issue of 12 rights shares at 0.3 Singapore cent each for every existing share held, and one bonus share for every rights share subscribed for. Trading of the rights and bonus shares is expected to commence on 22 September 2014.
SeD currently owns 60%-stake in a land development and sub-division project in Texas. It announced this week that it has sold US$20.72 million (S$25.88 million) worth of the land lots, or about 35% of the 136-acre development, and received US$800,000 worth of deposits. It also owns three waterfront residential sites in Western Australia where it is developing seven units of bungalows and good class townhouses for sale.
"With the encouraging sales of the Texas project and the proposed injection of HotApps into a U.S. quoted security, both our engines of growth are being set in motion in a dynamic manner which will accelerate our corporate recovery and growth so that we can restore and enhance shareholder value rapidly," Mr. Chan said.
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About Singapore eDevelopment Limited
Incorporated on 9 September 2009 and listed on the Singapore Exchange Catalist on July 2010, Singapore eDevelopment Limited ("SED" or the "Group"), formerly known as CCM Group Limited, is pursuing business activities in property development and investments primarily in the United States and Western Australia, Information Technology, and investments in high-growth quoted and unquoted securities.
For more information, please visit: www.SeD.com.sg