Intraco Agrees to Buy 51% of Digital Asset Platform MHC Singapore

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Singapore-listed Intraco (SGX: I06), a trading company, is going to acquire a 51 percent stake in digital asset platform MHC Singapore for a total consideration of around SG$47.2 million, according to a bourse filing on Monday.

The agreement between the two companies for the acquisition came after they initially entered into a binding head of agreement last December, but the original terms were revised later that month.

MHC offers custody and over-the-counter digital asset trading services, and its operations are mostly spaned across the Australian market. After the acquisition, the platform will be incorporated all of its digital asset business under the Singapore entity.

Intraco is planning to expand its fund management offerings and also implement new trading strategies moving from the traditional market with this acquisition.

Many Conditions Involved

Despite the agreement between the two parties, there are some important conditions that MHC has to obtain for the deal to be materialized. One of the key conditions is that MHC Singapore should generate at least SG$18.5 million in consolidated annual after-tax profits within 24 months of the February 7 acquisition agreement. Interestingly, this figure was lowered again when compared to the original agreement’s SG$24 million and the revised version’s SG$20 million.

To finance the deal, Intraco will issue warrants in payment to 52.5 million, each of which will carry the rights to subscribe for 1 new share in the company. It will further issue 42 million new shares at 50 cents apiece, thus taking the total consideration to SG$47.2 million.

Now, Mark Carnegie and Sergei Sergienko equally hold the ownership of MHC. They will be able to exercise the warrants at any time within a five-year window after seven years from the date of issue. Both of them will not receive any seats on Intraco’s board.

The acquisition deal is now pending the approval of Intraco shareholders.

Singapore-listed Intraco (SGX: I06), a trading company, is going to acquire a 51 percent stake in digital asset platform MHC Singapore for a total consideration of around SG$47.2 million, according to a bourse filing on Monday.

The agreement between the two companies for the acquisition came after they initially entered into a binding head of agreement last December, but the original terms were revised later that month.

MHC offers custody and over-the-counter digital asset trading services, and its operations are mostly spaned across the Australian market. After the acquisition, the platform will be incorporated all of its digital asset business under the Singapore entity.

Intraco is planning to expand its fund management offerings and also implement new trading strategies moving from the traditional market with this acquisition.

Many Conditions Involved

Despite the agreement between the two parties, there are some important conditions that MHC has to obtain for the deal to be materialized. One of the key conditions is that MHC Singapore should generate at least SG$18.5 million in consolidated annual after-tax profits within 24 months of the February 7 acquisition agreement. Interestingly, this figure was lowered again when compared to the original agreement’s SG$24 million and the revised version’s SG$20 million.

To finance the deal, Intraco will issue warrants in payment to 52.5 million, each of which will carry the rights to subscribe for 1 new share in the company. It will further issue 42 million new shares at 50 cents apiece, thus taking the total consideration to SG$47.2 million.

Now, Mark Carnegie and Sergei Sergienko equally hold the ownership of MHC. They will be able to exercise the warrants at any time within a five-year window after seven years from the date of issue. Both of them will not receive any seats on Intraco’s board.

The acquisition deal is now pending the approval of Intraco shareholders.

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