TIDMADAM
RNS Number : 5305R
Adamas Finance Asia Limited
15 June 2018
ADAMAS FINANCE ASIA LIMITED
(the "Company" or "ADAM")
Disposal of Interest in Global Pharm & Notice of General
Meeting
Adamas Finance Asia Limited, the London quoted pan-Asian
diversified investment vehicle, announces that, further to the
announcement on 27 April 2018, the Company has agreed revised terms
for the disposal of its interest in Global Pharm Holdings Inc.
("Global Pharm") to Fortune Insight Limited ("Fortune") (the
"Disposal").
The Disposal is in line with the Company's objective of a
managed disposal programme of its legacy portfolio where
commercially viable and reinvesting the proceeds in pan-Asian
income producing assets with capital gain potential.
1. Background
The Company acquired its interest in Global Pharm, which
comprised a convertible bond with a principal value of US$22.35
million (the "GP Interest") in a reverse takeover in February
2014.
In December 2014, the Company and Global Pharm agreed the
redemption of the bond for aggregate consideration of US$25 million
with an initial payment of US$2.4 million on 31 December 2014, a
further US$9 million on 31 March 2015 and a final payment of
US$13.6 million on 30 April 2015.
Global Pharm did not comply with the agreed redemption schedule
and made payments of approximately US$6.01 million in
part-redemption of the bond.
Because of the continuing failure of Global Pharm to make
payments, in mid-2017 the Company instructed a leading law firm in
Hong Kong to advise on the actions available to enforce payment.
The work by the lawyers included the commissioning of an
investigative agency. In an announcement on 4 August 2017, the
Company noted that, considering the report from the law firm, the
amount of ultimate recovery from the GP Interest was in doubt.
On 15 September 2017, ADAM announced the disposal of the GP
Interest to Fortune for cash consideration of US$15.6 million. The
GP Interest was transferred to Fortune at that time with the cash
consideration due within 120 days.
Payment was delayed and on 27 April 2018 the Company announced
that it had been notified by Fortune that, as a result of a change
in the identity of the principal investor in a fundraising being
undertaken by Fortune, it was no longer in a position to complete
the acquisition of the GP Interest on the agreed terms.
2. Revised Terms
The revised terms, contained in a deed of amendment to the
original sale and purchase agreement, involve a cash payment to be
made by Fortune to the Company of US$3 million. In addition, the
Company intends to issue 17,746,479 new ordinary shares of no par
value each ("Ordinary Shares") to Fortune at a subscription price
of US$0.71 thereby raising US$12.6 million (the "Subscription
Monies"), meaning a total cash receipt for the Company of US$15.6
million.
The issue of the Ordinary Shares is subject to shareholders
approving resolutions to increase the Company's share capital
available for issue which are be put to shareholders at a general
meeting to be held at 10.00 a.m. BST/ 5.00 p.m. HKT time on 11 July
2018 (the "General Meeting").
Although the terms of the Disposal have changed, the Company
will receive the same amount of cash as under the previous deal
terms.
The GP Interest was valued at US$15.6 million in the half yearly
report for the six months ended 30 June 2017. The Company will
therefore incur an additional balance sheet write-down of
approximately US$12.6 million in the results for the year ended 31
December 2017.
Due the resulting size of Fortune's shareholding upon completion
of the Disposal, the Company, Fortune, WH Ireland Limited and
FinnCap Limited will enter into a concurrent six-month lock in and
six-month orderly marketing arrangement, which are each subject to
customary exceptions and limitations.
3. Share Capital Authority
The current authority given to Directors pursuant to the
resolutions passed at the Company's last annual general meeting to
issue and allot Ordinary Shares is insufficient to allow the
Company to complete the proposed share issue to Fortune and
accordingly resolutions will therefore be proposed at the General
Meeting to increase the share capital of the Company to allow it to
complete the Disposal.
4. Related Party Transaction
Due to Fortune being managed by affiliates of Adamas Asset
Management (HK) Limited, which also manages the Company's largest
shareholder, Elypsis Solutions Limited, the Disposal is classified
as a related party transaction under the AIM Rules.
The Directors, having consulted with WH Ireland Limited, the
Company's nominated adviser, consider that the terms of the
Disposal are fair and reasonable insofar as Shareholders are
concerned.
5. Circular
A circular convening the General Meeting will be posted to
shareholders today and will be available on the Company's
website.
John Croft, Chairman of the Company, stated:
"This marks a significant milestone for ADAM as we refocus our
investment strategy, exiting legacy investments such as Global
Pharm.
"We can now focus on returning the Company to growth as we
continue to pursue our new investment strategy under the guidance
of investment manager, Harmony Capital."
Enquiries:
Adamas Finance Asia Limited
John Croft +44 (0) 1825 830587
WH Ireland Limited - Nominated Adviser
Tim Feather
James Sinclair-Ford +44 (0) 113 394 6600
finnCap Limited - Broker
William Marle
Grant Bergman +44 (0) 20 7220 0500
Buchanan - Financial PR
Charles Ryland
Henry Wilson +44 (0) 20 7466 5000
The information contained within this announcement is deemed by
the Company to constitute inside information under the Market Abuse
Regulation (EU) No. 596/2014.
About Adamas Finance Asia
ADAM is a London quoted investment company focusing on
delivering long-term income and capital growth to shareholders
through a diverse portfolio of pan-Asian investments. It aims to
provide uncorrelated returns through a combination of capital
growth and dividend income from a broad spectrum of national
geographies and asset classes.
The Company's investment manager, Harmony Capital, which has a
dedicated team with real Asian expertise, is focused on the
strategy of creating income and capital growth. Harmony Capital is
sourcing predominately private opportunities and has created a
strong pipeline of income generating assets include potential
investments in fintech, healthcare, property, mining,
pharmaceuticals and telecoms across Asia.
This information is provided by RNS, the news service of the
London Stock Exchange. RNS is approved by the Financial Conduct
Authority to act as a Primary Information Provider in the United
Kingdom. Terms and conditions relating to the use and distribution
of this information may apply. For further information, please
contact rns@lseg.com or visit www.rns.com.
END
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