Fabchem China has announced a $25 million reverse takeover (RTO) of Lincotrade & Associates, a Singapore-based provider of interior design, renovation, carpentry and joinery services.

The company, on April 22, entered into a sale and purchase agreement (SPA) with Tan Jit Meng, Soh Loong Chow Jackie and Tan Chee Khoon (known collectively as vendors), where it will acquire all the shares in Lincotrade & Associates for a consideration of $25.0 million.

Tan Jit Meng, Soh and Tan Chee Khoon are the directors of Lincotrade & Associates and own 40%, 40% and 20% of shares in Lincotrade respectively.

The purchase consideration will be paid via the allotment and issuance of 113.6 million new ordinary shares in Fabchem China at an issue price of 22 cents apiece.

The issue price represents a discount of 41.3% to the last transacted share price of 37.5 cents and a discount of 41.5% to the volume weighted average price (VWAP) of 37.6 cents on April 13.

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Fabchem will also allot and issue 5.68 million new shares at 22 cents each to Prestige Fame, an unrelated third-party, and up to 454,545 new shares to an unnamed sponsor, in part-payment for the sponsor’s professional fees.

In connection with the RTO, Fabchem China will seek to transfer the listing and quotation of its shares to the Catalist board of the SGX-ST from the Mainboard.

Following the allotment of shares, the vendors will hold a collective stake of 68.22% of the enlarged issue share capital of Fabchem China. The completion will also result in the transfer of controlling interest in the company.

According to the SGX filing put out by Famchem China, Lincotrade & Associates is a private company limited by shares and incorporated on Nov 14, 1991, in Singapore.

It has an issued and fully paid-up capital of $1.5 million comprising 1.5 million ordinary shares.

For the FY2020 ended June, Lincotrade & Associates recorded a loss of $2.0 million. It has also reported earnings of $1.6 million in its unaudited 1HFY2021 financial statement.

According to Fabchem China, it says the proposed acquisition and proposed transfer presents an opportunity for it to acquire a new operating business to meet the SGX-ST’s requirements of a new listing on the Catalist board, allowing it to maintain its listing status.

Upon completion, Lincotrade & Associates will become Fabchem China’s wholly-owned subsidiary.

Shares in Fabchem China closed flat at 37.5 cents on April 22.