Catalist-listed Incredible Holdings has signed a sale purchase agreement (SPA) to acquire a 42% stake watch trading firm in Golden Ultra for HK$84 mil ($14.6 million) on Oct 18.
According to Incredible, the acquisition is in line with its strategy to build and develop an e-commerce and e-marketplace luxury products platform.
Hong Kong-based Golden Ultra and its wholly-owned subsidiary CLKY Trading owns the online watch trading platform BestWatch, which sells luxury watch brands to customers in Hong Kong and other countries.
See: Incredible looks to start loan financing business in Hong Kong with HK$5.8 mil acquisition of Billion Credit Financial
Based on a 42% stake and as of June 30, CKLY had a net tangible asset value of HK$4.7 million. The company generated NPAT of HK$1.2 million for the six months ended June 30.
The proposed acquisition consideration of HK$84 million represents a 44.62% premium over Golden Ultra’s valuation of HK$58.1 million, based on a third-party valuation.
Incredible states it intends to fund the proposed acquisition through raising funds in the capital markets. However, the proposed acquisition is still subject to obtaining further approvals from the relevant authorities and shareholders’ approval at an extraordinary general meeting (EGM).
To secure the proposed acquisition of the stake in Golden Ultra, Incredible will issue a promissory note of $84 million due Sept 30. The promissory note can only be redeemed by Incredible at any time within 14 business days of notice to the noteholder and upon full repayment of the principal amount plus any accrued outstanding interest paid.
As at 2.58pm, shares in Incredible are trading 0.1 cents or 20% lower at 4 cents.
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