SINGAPORE (Jan 24): mDR is paying $1.2 million for a 14.25% stake in another listed entity USP at a discount of 85.5% to the target’s net asset value.
mDR, which is the new name of former market darling mobile handset servicing chain, Accord Customer Care Solutions, is paying 8 cents for 15 million new USP shares – one cent above USP’s volume weighted average price of 7 cents on Jan 22.
Upon completion of the deal, USP’s share base will increase from just below 90.3 million shares to nearly 105.3 million shares. This level will make mDR the second largest shareholder of USP.
USP’s largest shareholder now is an individual named Weng Huixin, who, according to the company’s annual report, held more than 22% of the shares as at June 22 2018.
Assuming she has not traded USP shares since that time, with the enlarged share base, Weng’s stake will drop to just below 19%.
USP’s main business is in the distribution of products such as engines for boats, as well as oil and lubricants. Its net asset value as at 30 Sept 2018 was 55.1 cents.
Over the past 12 months, USP shares have dropped by more than half from 19 cents to the current level.
On Dec 5 2018, USP announced that CEO Li Hua has resigned and an interim CEO Kan Bright Pan, most recently Chief Technical Officer of a key operating unit, Supratechnic, has been appointed in his stead.
As for mDR, which remains in the mobile handset services business, it is now controlled by former Lehman Brothers analyst Edward Lee.
As at March 30 2018, Lee, who holds the executive chairman appointment, owned 20.78% of the company.
Over the past 12 months, mDR shares have traded between the rock-bottom level of 0.1 cent and 0.2 cent. Its book value, as at 30 Sept 2018, was 0.32 cent.
Besides this planned investment in USP, mDR holds nearly $28.5 million worth of investment securities, as at Sept 30 2018. More than 39% of this portfolio was invested in telecommunications stocks, 34.5% in infrastructure and 10.5% in real estate.
