Strategic Placement: Hildrics to Take 29% Stake in Vividthree
Vividthree Holdings is undergoing a significant ownership restructuring, as private equity fund Hildrics Asia Growth Fund VCC is set to acquire a 29 per cent stake through a S$2.2 million subscription of newly issued shares.
This new equity placement effectively replaces an earlier, scrapped deal in which the fund had intended to purchase existing equity directly from Vividthree’s controlling shareholder, mm2 Asia.
The official termination of the previous agreement and the simultaneous creation of this new share subscription agreement both took place on September 8, indicating a swift, deliberate strategic pivot.
Under the terms of the new placement, Vividthree will issue 137.4 million new ordinary shares to Hildrics at a specific issue price of S$0.01615 per share.
This transaction is designed to substantially increase the private equity fund’s holding in the company from its current 7.98 per cent to a significant 29 per cent of the enlarged share capital following the issue.
Conversely, mainboard-listed mm2 Asia’s stake in Vividthree will consequently be reduced from its current 29.9 per cent to approximately 23 per cent after the proposed placement is finalized.
The agreed-upon issue price represents a notable 15 per cent discount to the volume-weighted average price (VWAP) of S$0.019 per share of Vividthree’s shares traded on September 5, which was the last full market day prior to the signing of the agreement.
Capital Injection and Financial Rationale for Vividthree
In a public bourse filing, Vividthree Holdings stated that the estimated net proceeds from the share placement, totaling approximately S$1.74 million, will be strategically allocated to strengthen the company’s overall financial position and bolster its general working capital reserves.
This injection of capital is deemed essential for supporting both new and existing projects within the company’s portfolio.
The directors of Vividthree emphatically stated their belief that this specific share placement is the “most suitable fundraising option” available to the company at this critical juncture.
This assessment suggests that the capital raise offers favorable terms and is the most efficient method to secure the necessary funding compared to other financing alternatives, especially considering the market conditions and the need for immediate liquidity.
The buyer, Hildrics Asia Growth Fund VCC, is described as a specialized private equity fund focused on providing critical growth capital to mid-tier enterprises across Southeast Asia that possess established operational track records and demonstrable potential for significant future growth.
Hildrics Capital, a Singapore-based fund management company that manages the fund, is known for its expertise in originating proprietary deals across various industries within Singapore and the broader Southeast Asian region, lending considerable credibility to the transaction and the strategic value it brings to Vividthree.
Restructured Deal Replaces Previous mm2 Share Disposal Plan
The newly executed share subscription agreement by Vividthree fundamentally replaces the earlier, now-terminated deal that had been agreed upon back in May, which would have involved a direct equity disposal by the majority shareholder, mm2 Asia.
In the original deal structure from May, mm2 Asia had agreed to sell a 21.02 per cent stake in Vividthree to Hildrics for a lower consideration of S$1.7 million.
Had that disposal proceeded as initially planned, mm2 Asia’s overall holding in Vividthree would have been dramatically reduced to approximately 8.9 per cent.
At that level, Vividthree would have ceased to be formally classified as an associated company of the mm2 Asia group, triggering a different set of accounting and regulatory implications.
The proceeds derived from that prospective sale were specifically intended by mm2 Asia to be utilized for the crucial repayment of its own outstanding liabilities, highlighting a different financial driver for the initial transaction.
By opting for a direct placement of new shares, Vividthree has successfully secured a larger capital injection— S$2.2 million compared to the original S$1.7 million— which goes directly into the company’s balance sheet for working capital, rather than flowing to the selling shareholder.
This restructure is significantly more beneficial for Vividthree’s financial health and its ability to execute its growth strategies.
The company’s shares had closed flat at S$0.02 on September 5, just before the announcement of the new, finalized placement deal, suggesting investors were awaiting clarity on the company’s capital strategy.
