Incredible Holdings – which has business in electronics distribution, luxury goods trading and loans financing – is set to acquire Hong Kong-based Billion Credit Financial at HK$5.8 million ($1 million).
The proposed acquisition is in line with the group’s goal of diversifying into the loan financing business of providing personal and business loans secured by providing personal and business loans secured by assets such as privately owned commercial, industrial or residential properties in Hong Kong based.
The loans will be based on a loan to value ratio at prevailing market rates.
See: Incredible Holdings says valuation for acquisition not necessary
Billion Credit Financial provides loans, mainly to individuals who provide assets such as properties as collateral.
In its recent FY2020 ended Dec 31, the company – which has been in operation since 2012 – raked in a net profit of HK$155,000 after taxes.
An independent valuation report by Peak Vision Appraisals valued Billion Credit Financial at HK$4.73 billion, on Sep 27.
To secure the proposed acquisition, Incredible will issue a promissory note of $1.0 million at 8% per annum to vendor by Sep 30 2022. The group intends to fund this by raising funds in the capital markets.
“This proposed earnings accretive acquisition represents an excellent opportunity for our Group to fast track into this business with an existing team of experienced professionals, a ready clientele base to serve, an existing loan portfolio with recurring interest income and a money lending license in Hong Kong nearing renewal approval,” says Christian Kwok-Leun Yau Heilesen, Incredible’s executive director.
He adds that the group will continue to keep a lookout for earnings accretive acquisitions to diversify its revenue streams and enhance long-term shareholder value.
Shares in Incredible closed down 0.1 cents or 25% at 0.3 cents on Sep 28.
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