Mercurius inks extension to grocery acquisition deal

The Edge Singapore
The Edge Singapore7/4/2022 09:46 PM GMT+08  • 2 min read
Mercurius inks extension to grocery acquisition deal
Photo: Mercurius
Font Resizer
Share to WhatsappShare to FacebookShare to LinkedInMore Share
Scroll to top
Follow us on Facebook and join our Telegram channel for the latest updates.

Mercurius Capital Investment, which has investments in hotels, is taking longer to complete the acquisition of a groceries business Songmart Holdings.

The $36 million acquisition, first announced back in July 2021, was meant to help the company find a new earnings stream as the pandemic hits hospitality industries worldwide.

In an announcement on July 4, Mercurius says both parties have entered into a second supplemental letter to extend the long-stop date for the completion from April 11 to Aug 31 so as to give more time for required conditions to be fulfilled.

Mercurius is funding the acquisition by issuing 200 million new shares in three equal tranches at 18 cents each.

The third tranche is to be issued upon the acquisitions meeting earnings targets of RM16.5 million for FY2023. Adjustments are allowed if otherwise.

According to the updated agreement on July 4, in addition to the achievement of certain profit targets for FY2023, the issue of new shares forming the third tranche will be subject to full settlement of banking facilities amounting to RM14.1 million granted by Alliance Bank Malaysia to Songmart.

See also: Yoma Strategic to acquire Telenor Group's stake in Wave Money at revised consideration of US$40 mil

The number of shares in the final tranche will be adjusted to the extent of the amount of unpaid banking facilities, if any, at Mercurius’ sole discretion.

“The proposed acquisition is strategically important to the group and we are excited about our plans to expand the supermarket business in Malaysia and beyond,” says Mercurius’ executive chairman Chang Wei Lu.

“The group is well on track to achieve more than 500 stores in time to come,” he adds.

See also: Singtel's Thai associate progresses with acquisition of TTTBB and units in JASIF

Mercurius also says that with the extension, the vendors have “expressly and irrevocably” assigned all their economic benefits of Songmart’s net profits with effect from July 1 2022 till the completion of the deal, to Mercurius.

In the event the deal is terminated, the economic benefits will not be refunded.

Mercurius shares last traded at 6.5 cents.

Loading next article...
The Edge Singapore
Download The Edge Singapore App
Google playApple store play
Keep updated
Follow our social media
Subscribe to The Edge Singapore
Get credible investing ideas from our in-depth stock analysis, interviews with key executives, corporate movements coverage and their impact on the market.
© 2022 The Edge Publishing Pte Ltd. All rights reserved.