Transactions & News

04 - Cross border M&A in Construction Industry

Mergers & Acquisitions:

Cresco is currently working with a European company in the construction sector specializing in engineering and design of building systems. The company is looking to expand its presence in Southeast Asia through a takeover project of a mechanical engineering company. Cresco will be overseeing the project from its inception to deal completion.

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Structuring an Open-Ended Fund:

Cresco structured and set up an open-ended fund, a Cayman Islands Segregated Portfolio Company, to be managed by an Investment Manager, a registered fund management company regulated by the Monetary Authority of Singapore.

The Fund had some unique features including variable lock-up periods for investors with lock-up premium payable to such investors depending on the length of the lock-up period. Additionally, the Fund was structured in a way that allows it to issue bonds to leverage up so that it achieves a better gearing in its investments.

While ensuring compliance with the continuously evolving regulatory environment, we arranged for the successful launch of Fund A, which includes:
(1) Preparation of an Offering Memorandum for share placement in Fund A; and
(2) Registration of Fund A with the Cayman Islands Monetary Authority.

Issuance of bonds by the Initial Fund:
We structured and put in place an ability for the Fund to issue bonds. The bonds will have a 4-year tenor with an interest per annum, payable annually.

Structuring Single Family Offices (SFOs):

Cresco has extensive experience in structuring Single Family Offices (SFOs), pulling all family businesses and investments, bankable and non-bankable assets, shareholders and varied interests into the SFO structure.

Cresco carefully structured each SFO, customizing and tailoring it for each individual family.

With our understanding across various types of investments, financial products and businesses, this allows us to customize and tailor-make bespoke structure(s) for each SFO to suit each SFO’s unique requirements.

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Debt Restructuring:

One Richardson and Richardson Centre together form a development project that is developed by Devwest Group. The Project is situated at 3 Richardson Street, South Perth, WA 6151, and comprises of 2 buildings, one residential and the other commercial.

The Project has been stalled due to various reasons, including market conditions and issues with the financing structure.

Cresco was appointed to restructure the entire project (including arranging the refinancing of the existing lenders and put together a construction loan to complete the project). Faced with multiple existing stakeholders and a difficult refinancing environment, Cresco worked to get all stakeholders in line with the restructuring plan and procure the right financing partners to provide suitable refinancing and a construction loan.

We successfully restructured the Project and closed the AUD 66.56 million refinancing and construction financing of this Project, achieving an extremely high loan to value ratio. The total value of the refinancing deal comprises a 1st mortgage loan of AUD 60.56 million (that Cresco had worked on with Development Finance Partners) by Centuria Bass, and a 2nd mortgage loan of AUD 6 million by a mezzanine private financier.

   

 

Business Restructuring:

Cresco Investments was appointed as the AA Group’s consultant to provide professional advice to the board and management, in particular the renewal and restructuring of the Company’s business.

We have arranged and led a group of key investors and shareholders into AA Group Holdings Ltd through the buyout of some existing shareholders who had wanted to exit.

Further, Cresco Investments assisted in the fundraising for AA Group Holdings Ltd through the issuance of Rights Shares with Warrants.

AA Group has gone through a few M&A transactions, mainly to divest its unprofitable businesses (manufacturer and supplier of audio equipment parts) and acquire profitable businesses (leasing and construction business). We played a pivotal role throughout the entire transaction cycle.

Following the acquisition of various companies, AA Group Holdings transitioned from a manufacturer and supplier of audio equipment parts into a company that works in the leasing and construction business.

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Removal of Directors:

Sincap Group Limited received a letter from certain shareholders that had previously acquired a significant stake in the Company. Through this letter, they stated their intention to convene an Extraordinary General Meeting (EGM) for the removal of Sincap’s Directors.

Cresco Investments advised the management, current board and controlling shareholders in handling the entire situation. The management, current board and controlling shareholders of the Company successfully beat off the challenge of this group of shareholders.

Amongst the methods employed, Cresco Investments brought in a new investor which subsequently acquired enough shares to establish a substantial stake in the Company. This new investor helped to strengthen the support to the current Board and Management.

Proxy Fight:

In the midst of the shareholder dispute, Cresco Investments was appointed as an independent consultant to Datapulse Technology (“Datapulse”).

In preparation for the EGM, Cresco Investments assisted the management and current board to review past transactions and corporate relationships relating to Datapulse, its subsidiaries and related parties, including any historical corporate transactions by the proposed new directors.

In addition, Cresco Investments assisted the current board to strategize and engage constructively with shareholders (which includes the proposed business diversification for creation of longer-term shareholder value) and at the same time improve the communications and position with the regulators.

This resulted in the retention of the current board and also shareholder’s approval to move ahead with the business diversification at the EGM where the shareholders of Datapulse approve the resolutions:
(i) To approve and retain all four current board directors,
(ii) To approve business diversification into investments and consumer business,
(iii) To approve a special dividend of 1 cent per share following the sale of the Tai Seng property and,
(iv) Against the appointment of the proposed new board of directors.

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Investment:

Cresco Investments arranged a Placement of Shares exercised and raised a total of S$3.5million for Communication Design International (“CDI”), which is an international marketing and communications company listed on the Catalist board of the Singapore Exchange offering project management services.

Cresco took a position in this placement exercise by subscribing for majority of the S$3.5 million placement at S$0.042 per share, holding a significant substantial stake in CDI post placement.

Care.

Fundraising:

Cresco Investments assisted in the fundraising for Sincap Group Limited.

Sincap Group Limited completed various placement of shares exercises and issuance of rights shares. A total of more than S$20 million was raised during these placement exercises. The entire transaction was arranged by Cresco Investments.

 

 

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Mandatory General Offer:

Jacks International Limited is an investment holding company listed on the mainboard of the Singapore Exchange which owns the Nature’s Farm business (a health and health supplement business). Following the acquisition of shares from the majority shareholder, Creative Elite Holdings Limited held approximately 66.08% of all the total issued shares of Jacks International Limited.

As a result of the Acquisition and in accordance with Rule 14 of the Code and Section 139 of the SFA, Creative Elite Holdings Limited made a General Offer to acquire the remaining shares, being all the shares (other than treasury shares) not already owned, controlled or agreed to be acquired.

This entire transaction (the sale and purchase and the General Offer) was arranged by Cresco Investments.

General Offer – Take Over:

Communication Design International (“CDI”) is an international marketing and communications company listed on the Catalist board of the Singapore Exchange offering project management services. LPW Investments Pte. Ltd. (“LPW”) is an investment holding company.

CDI completed a Placement of Shares exercise and raised a total of S$3.5 million. Cresco Investments arranged the entire transaction and through Cresco Investments, LPW acquired the 117,563,675 issued and paid-up ordinary shares in CDI for a cash consideration of S$9,992,912, being S$0.085 per share through a voluntary conditional cash offer.

 

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Reverse Take-Over:

Regal International Group is a Malaysian real estate developer. It is listed on the mainboard of the Singapore Exchange, via a reverse takeover (RTO) of metallic precision manufacturer Hisaka Holdings.

The acquisition by Hisaka Holdings of the entire issued and paid-up share capital of Regal International for a consideration of S$127.3 million is satisfied fully by a combination of cash payment and the issue and allotment of shares.

Cresco Investments was the arranger for this RTO, and this transaction was successfully completed.

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Public Fund Raising – Rights Issue:

Cresco Investments have extensive experience in assisting companies in fund raising activities.

Rights Cum Warrants Issue:
We assisted in the fund raising for AA Group Holdings Ltd through the issuance of Rights cum Warrants issue. A total of S$9.6 million was raised through the Rights issuance and another S$11.5 million through the Warrants when exercised.

Rights Issue:
We assisted in the fund raising for Sincap Group Limited through the issuance of Rights shares. A total of S$3.8 million was raised through this exercise.

Diagram:

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Placement of New Ordinary Shares:

Cresco Investments have successfully arranged placements of new ordinary shares and fund raising for various companies.

Communication Design International Limited:
Communication Design International Limited (now known as Imperium Crown Limited) completed a Placement of Shares exercise and raised a total of S$3.5 million. Cresco Investments arranged the entire transaction and even took a position in this exercise

Sincap Group Limited:
Sincap Group Limited completed a placement of 350 million new ordinary shares. A total of S$6.3 million was raised during this placement exercise. The entire transaction was arranged by Cresco Investments.

     

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