Challenger Technologies

[dydx]

Dymon Asia PE's subscription of 56.552m new Challenger shares at $0.58/share was completed yesterday..
https://links.sgx.com/FileOpen/_20211101...eID=689076

With Dymon Asia PE now holding a 14.92% interest, would Challenger's business grow faster and better with their involvement in the BOD? Would Dymon Asia PE push for to pay out more dividends from profits, since already Challenger has excess cash and capital?

[brattzz]

break it up and sell it in pieces!

[ghchua]

With Dymon Asia PE now holding a 14.92% interest, would Challenger's business grow faster and better with their involvement in the BOD? Would Dymon Asia PE push for to pay out more dividends from profits, since already Challenger has excess cash and capital?

Essentially a strange move by the company to do this placement. Since you said that Challenger has excess cash and capital, why do they need more cash by doing this placement to Dymon Asia? They must have some M&A deals in mind, otherwise, it really make no sense to dilute minorities share holdings in the company with this placement.

[dydx]

As at 30Jun21, Challenger held a total of $95.9m in cash and other financial assets. Including the $32.8m just raised from Dymon Asia PE, the balance would increase to $128.7m, translating to $0.32/share (based on the enlarged share base of 401.76m after Dymon Asia PE's subscription). That's a lot of cash!

There could well be some M&A deals up the sleeve, but local opportunities are few, as Challenger already holds a commanding market position in SG. Dymon Asia PE has a track record in exiting its investments through selling them to bigger foreign players. Therefore, it is conceivable that this may happen for Challenger as well, now that Dymon Asia PE has bought themselves into the company. If this is part of their plans - which may include one or more M&A deals first to make Challenger a bigger business - there may even be big dividends coming as well.

[brattzz]

1) Dymon paid 58cts for the 15% new shares, after the lowball offer of 53cts.
2) Loo/Dymon says 50% CAPEX 50% M&A for use of the capital 32.8m+95.9m = 128.7m!!!

ic Investments and
Mergers & Acquisitions
50%
Product and Business
Development, and Expansion
of Business
50%

3) No mention of bigger dividends or not..

For small investors willing to wait it out, (pagolin bloc included),

if we buy at current price 55cts, already beat Dymon's buy-in price of 58cts!!! let see if another lowball offer comes in at base offer price >61cts soon! Pagolin's valuation of the company’s shares is $1.15.

[ghchua]

it's just Dymon/Loo family positioning the required % share votes to beat the 11.36% pagolin bloc rejections votes, based on the last rejected lowball offer at 53cts...

11.36% rejection votes over 15% dilution = 9.99/< less than 10% left, should be enough to take company private at next/2nd offer coming soon after this dilution stake move...

Shrewd move Loo/Dymon!

Hi brattzz,

Its a different ball game now. Previously, they proposed a voluntary delisting resolution under old SGX listing rules to delist the company. As you might have known, the rules had changed since then. Under the new rule, offeror and concerted parties can no longer vote on delisting resolution, unlike last time. Therefore, unless they offer a decent price, I don't think they will be able to secure more than 75% of independent shareholders to vote for it to delist the company.

With means, they are left with two other main options to delist the company, via SOA and voluntary general offer. SOA is a no-no for low ball offers, as there is a headcount criteria. Which leaves only a voluntary general offer option. But then again, unlike last time, when doing a GO, minorities do not need to come out and vote against anything to block a GO. By just not doing anything, minorities are considered as rejecting the offer. Therefore, it is difficult to get 90% acceptance via a GO normally with a low ball offer, unless the offeror and concerted parties holds more than 80% of the shares to begin with. Which is likely to be the case if all the substantial shareholders of Challenger team up and made an offer via a bid vehicle since the free float of the company is now less than 20% with the conclusion of this placement deal.

[brattzz]

Thanks ghchua for the update, i am outdated liao... will do reading more!

[brattzz]

Tan Keng Soon appointed to look after so many holdings..


(1) Digileap Capital Ltd has direct interest in 59,921,624 ordinary shares in the capital of Challenger Technologies Limited
("Challenger Shares").
(2) Asia Consumer Electronics Ltd is the sole shareholder of Digileap Capital Ltd and is deemed to be interested in the
Challenger Shares.
(3) Diamond GP Holdings II Ltd is the sole shareholder of Asia Consumer Electronics Ltd and is
deemed to be interested in the Challenger Shares.
(4) Dymon Asia Private Equity (S.E. Asia) II Ltd is the sole shareholder of
Diamond GP Holdings II Ltd and is deemed to be interested in the Challenger Shares.
(5) DAPE Ltd is the sole shareholder of Dymon Asia Private Equity (S.E. Asia) II Ltd
and is deemed to be interested in the Challenger Shares.

(6) By virtue of Tan Keng Soon holding more than 20% of the voting shares in DAPE Ltd, Tan Keng Soon is
deemed to be interested in the Challenger Shares.

[Shiyi]

it's just Dymon/Loo family positioning the required % share votes to beat the 11.36% pagolin bloc rejections votes, based on the last rejected lowball offer at 53cts...

11.36% rejection votes over 15% dilution = 9.99/< less than 10% left, should be enough to take company private at next/2nd offer coming soon after this dilution stake move...

Shrewd move Loo/Dymon!

Hi brattzz,

Its a different ball game now. Previously, they proposed a voluntary delisting resolution under old SGX listing rules to delist the company. As you might have known, the rules had changed since then. Under the new rule, offeror and concerted parties can no longer vote on delisting resolution, unlike last time. Therefore, unless they offer a decent price, I don't think they will be able to secure more than 75% of independent shareholders to vote for it to delist the company.

With means, they are left with two other main options to delist the company, via SOA and voluntary general offer. SOA is a no-no for low ball offers, as there is a headcount criteria. Which leaves only a voluntary general offer option. But then again, unlike last time, when doing a GO, minorities do not need to come out and vote against anything to block a GO. By just not doing anything, minorities are considered as rejecting the offer. Therefore, it is difficult to get 90% acceptance via a GO normally with a low ball offer, unless the offeror and concerted parties holds more than 80% of the shares to begin with. Which is likely to be the case if all the substantial shareholders of Challenger team up and made an offer via a bid vehicle since the free float of the company is now less than 20% with the conclusion of this placement deal.

ghchua:

Could you elaborate on what you meant:
"unlike last time, when doing a GO, minorities do not need to come out and vote against anything to block a GO. By just not doing anything, minorities are considered as rejecting the offer. "

[brattzz]

http://rulebook.sgx.com/sites/default/fi...1_2019.pdf

It's in the sgx rule book - Shiyi