ASX listed gaming and hospitality company, Aquis Entertainment Limited (ASX: AQS) is involved in developing and operating integrated resort projects. In December 2018, the company entered into a binding Implementation Deed with Blue Whale Entertainment Pty Ltd and Aquis Canberra Holdings Pty Ltd (ACH) under which Blue Whale will acquire the outstanding convertible loan and 137.0 million Company shares held by ACH. Aquis Canberra holds its interests in Aquis Entertainment through Aquis Canberra Holdings (Aus) Pty Ltd.
Today (i.e. 21 March 2019), the company held a General Meeting at which Aquis shareholders voted unanimously in favour of this proposed transaction. In order to further proceed with this transaction, Blue Whale now requires ACT government and regulatory approvals.
The proposed transaction if implemented will result in Blue Whale replacing ACH as the controlling shareholder of Aquis Entertainment with a shareholding of up to a maximum of 86.99% of Aquis’ share capital. Under the transaction, ACH will sell 137.0 million AQS Shares to Blue Whale for consideration of $4 million and it will transfer its existing Convertible Loan to Aquis to Blue Whale for consideration of $24 million.
As part of the proposed transaction, Blue Whale will forgive a minimum of $2 Mn of the outstanding amount owed by Aquis Entertainment under the Convertible Loan and it will convert the remaining outstanding amount under the Convertible Loan to AQS Shares. Consequently, Aquis will issue up to 184.9 million AQS Shares at $0.20 per AQS Share to Blue Whale and the Convertible Loan will be extinguished and terminated.
Moreover, Blue Whale will also grant a Put Option to ACH which, if the Put Option is exercised, will entitle Blue Whale to acquire the remaining 26.86 million AQS Shares held by ACH.
Under the Proposed Transaction, the convertible loan is being converted at A$0.20 per AQS Share. This represents a significant premium to the price at which AQS Shares have traded at any time in the previous 12 months.
At the time of the initial announcement of this transaction, Aquis Entertainment Chief Executive Officer Jessica Mellor had told that this transaction is providing considerable value to the company and minority shareholders.
For the full year ended 31 December 2018 (FY 2018), the company reported a loss from ordinary activities after tax of $3.396 million which was 75.4% less than the loss of $10.415 million in the previous corresponding period. Further, the company reported earnings before Interest Tax Depreciation and Amortisation (EBITDA) for the year was a $625,885 in FY 2018 as compared to EBITDA loss of $4,702,327 in FY 2017, representing an improvement 113%.
Aquis Entertainment’s last traded at a price of $0.050, with a market capitalisation of ~$9.26 million as on 21 March 2019. In the last six months, the share price of the company increased by around 150%. It has 52 weeks high of $0.055 with an average volume of ~41,636.
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