Rex Technology Investments (RTI), a wholly-owned subsidiary of Catalist-listed Rex International Holding, will invest up to US$4 million ($5.38 million) into commercial drone company Xer Technologies.
The investment comprises US$1 million for a 40% stake in Xer, along with a commitment to inject up to US$3 million in the company, subject to the achievement of certain technical and sales milestones by Xer within the next 18 months.
RTI will also have the right to appoint two out of five directors to the board of directors of Xer, and has further agreed to support Xer with management personnel from Rex International group, on arm’s length terms to be agreed between the shareholders.
According to Rex International’s filing to SGX on July 6, Xer was incorporated in Singapore on June 8 and has yet to commence operations. Currently, 70% of Xer’s shareholding is held by Cresta Group, while 25% is held by Limea.
Cresta Group is wholly-owned by Dr Karl Lindgren, while Limea is owned through a 50:50 split between Cresta Group and Karl's brother Hans Lidgren.
Karl is listed as a founder of Rex International on the company website and currently serves as a non-independent and executive director on the board. Through Limea, the brothers hold a 34.71% stake in Rex International.
Upon completion of the acquisition of the 40% stake in Xer by RTI, Cresta and Limea will hold 42% and 15% shareholding interest in Xer respectively.
Xer recently acquired UAV Development Sweden, a spin-off from Swedish security company Nicax Holding that has been offering commercial drone flying search and rescue and surveillance services to customers since 2011.
UAV Development’s in-house developed long-range multirotor drones can fly for up to four hours and have heavy net payload capability of up to 20 kg. The drones are in final testing and slated to be commercially available in the 4Q2021. Targeted clients are in areas such as infrastructure inspection, search and rescue operations, public safety and animal herding.
“The investment allows Rex to diversify from its core business of oil exploration and production. Xer’s unique heavy-duty drones will promote sustainable practices for corporations and government institutions on a global scale by replacing larger and heavier modes of transport such as helicopters, trucks and sea vessels for a wide range of applications, minimising environmental impact and reducing CO2 emissions,” says Dan Broström, executive chairman of Rex International.
Shares in Rex International closed up 1.1 cents or 5.82% higher at 20 cents on July 6.
Photo: Rex International