Rex to Pay for Two-Third Stake in JV Firm Rexonic with Cash, New Shares
Rex International Holding Limited (Rex International Holding or the Company, and together with its subsidiaries, the Group), a company listed on the Catalist of the Singapore Exchange Securities Trading Limited, announced Monday that it has signed a shareholders’ agreement (Shareholders’ Agreement) to regulate the affairs of Rexonic AG (Rexonic), a new joint venture company that is in the process of being incorporated in Switzerland, with Swiss firm Ogsonic AG (Ogsonic) (Joint Venture). Rex International Holding and Ogsonic will respectively hold 66.7 percent and 33.3 percent stake in Rexonic. Rex International Holding will pay for its 66.7 percent stake in Rexonic with $10 million in cash and SGD 12.4 million (equivalent to approximately $10 million) by way of the issuance of 15,756,035 new ordinary shares (New Shares) in the capital of Rex International Holding (Shares) to Ogsonic, which is pending regulatory approval.
The New Shares will be issued at an issue price of $0.634 (SGD 0.787) per New Share, representing the seven day average closing price of the Shares on the Catalist of the Singapore Exchange Securities Trading Limited (SGX-ST) prior to the date of the signing of the Shareholders’ Agreement Oct. 24. The New Shares are intended to be issued pursuant to the general share issuance mandate obtained at the extraordinary general meeting of the Company held June 24.
Rexonic will own the world’s first environmentally-friendly, high-power ultrasound technology for commercial oil well stimulation that has shown to increase oil production from 30 percent to 380 percent both onshore and offshore. The proprietary, patented technology is highly efficient in cleaning the production well bore from typical oil production inhibitors such as wax, paraffin and salt deposits, thereby significantly increasing the flow of oil into the well bore at low cost. Rexonic’s operating business models will include the servicing and licensing of the technology to oil production companies and oil service companies.
Måns Lidgren, CEO of Rex International Holding, said, “Rexonic’s unique enhancing oil recovery technology will be a good extension to our core competence in oil exploration using our proprietary Rex Technologies. Like the Rex Technologies, Rexonic’s ultrasound technology is game-changing, highly effective and cost efficient. Operating in the oil production phase, Rexonic will contribute a complementary, recurring revenue stream to Rex International Holding’s main activities in oil exploration. The addition of Rexonic strengthens our technology offering and puts Rex International Holding in good stead as the preferred technology partner of choice for both oil exploration and production.
Concurrently, Rex International Holding intends to place out up to 70 million New Shares (Placement Shares) through a private placement exercise at a placement price of $0.609 (SGD 0.755) per Share (Placement Price) (Private Placement) raising up to approximately $42.62 (SGD 52.85) million to finance the Joint Venture and other new business opportunities. The Co-Placement Agents for the Private Placement are PrimePartners Corporate Finance Pte. Ltd. and UOB Kay Hian Private Limited.
The Placement Price of $0.609 (SGD 0.755) per Placement Share represents a discount of 9.6 percent to the volume weighted average price of $0.673 (SGD 0.8356) for each Share, based on trades done on the Shares on the Catalist of the SGX-ST for the full market day prior to the signing of the Placement Agreement Oct. 25 and was arrived at following arm’s length negotiations between the Company and the Co-Placement Agents. The Placement Shares are intended to be issued pursuant to the general share issuance mandate obtained at the extraordinary general meeting of the Company held June 24.
Måns Lidgren said, “We are rapidly growing our portfolio of concessions and the proceeds from our initial public offering (IPO) in July 2013 will be accounted for with our committed drilling program in the Middle East, Trinidad and Norway and interests in new concessions that we have since acquired. The proceeds from the Private Placement will give us the fire power to realize our aspirations to further grow our portfolio of assets, especially in the Asia-Pacific region, and to work with other established industry players.”
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