Adventus Holdings’ Strategic Placement to Raise S\$1.54 Million for Hotel Development and Debt Repayment

Adventus Holdings Limited, a Singapore-listed company, has announced a strategic move to raise up to S\$1.54 million through a proposed placement of 855 million new ordinary shares. This bold step is aimed at strengthening the company’s financial position and fueling its future growth, particularly in the hospitality sector.

Key Details of the Proposed Placement

The company has entered into a placement agreement with SAC Capital Private Limited, which will act as the placement agent on a best-efforts basis. The placement price has been set at S\$0.0018 per share, representing a 10% discount to the volume-weighted average price of S\$0.002 per share as of 27 December 2024. The placement shares constitute approximately 34.87% of the company’s existing issued share capital and 25.86% of its enlarged share capital post-placement.

Importantly, the placement will be conducted through an exempt offering under Section 272B of Singapore’s Securities and Futures Act, meaning no prospectus will be issued for this offering.

Use of Proceeds: Debt Repayment, Working Capital, and Property Enhancements

The net proceeds, estimated at S\$1.489 million after deducting approximately S\$50,000 in fees and expenses, will be allocated as follows:

• Repayment of bank obligations: 40% to 60% of net proceeds
• General working capital: 20% to 30%, including staff salaries and administrative expenses
• Property enhancement costs: 20% to 30%, specifically for their Danang hotel project managed by Intercontinental Hotels Group (Vietnam) Company Limited

The company believes that the infusion of funds will reduce its dependency on bank borrowings and shareholder loans, while also enabling it to capitalize on future opportunities in the hospitality sector.

Shareholders Take Note: Potential Impacts and Key Conditions

Shareholders should be aware of the following critical aspects, which could influence share prices:

• The placement will not result in a transfer of controlling interest in the company.
• The issuance of new shares will dilute the existing net tangible assets (NTA) per share, decreasing from S\$0.55 to S\$0.45.
• The loss per share (LPS) will also be reduced from S\$0.16 to S\$0.12 post-placement.
• The placement is conditional upon SGX-ST’s approval for the listing and quotation of the new shares, among other prerequisites.

Additionally, the placement agent has confirmed that the shares will not be issued to company directors, substantial shareholders, or other related parties.

Rationale Behind the Move

The placement is strategically timed, leveraging the recent signing of a hotel management agreement with Intercontinental Hotels Group (Vietnam) for the company’s Danang hotel. This marks a significant milestone in Adventus Holdings’ efforts to expand its presence in the hospitality industry. The additional funds will bolster the company’s ability to meet its financial obligations and invest in property enhancements, paving the way for future growth.

Financial Implications and Disclosures

The pro forma financial effects of the placement, based on the company’s audited financial results for the year ending 31 December 2023, illustrate its potential impacts:

• Share Capital: Increases from 2.45 billion to 3.31 billion shares.
• NTA: Increases from S\$13.47 million to S\$14.96 million.
• LPS: Marginally increases from S\$3.91 million to S\$3.96 million.

The board has confirmed that the company’s working capital is sufficient for its current requirements, both before and after the placement.

What’s Next?

The company will apply to the SGX-ST for the listing and quotation of the new shares on the Catalist board. Further announcements will be made on material developments regarding the placement.

Disclaimer

This article is for informational purposes only and does not constitute financial advice or an offer to buy or sell any securities. Shareholders and investors are advised to exercise caution and consult their financial advisors when dealing with the company’s shares or securities.