Leading diversified debt-restructuring company Credit Intelligence Ltd (ASX: CI1) has accelerated its Asian Expansion with two Acquisitions in Singapore. In an announcement made on 9 May 2019, the company announced that it has entered into share purchase agreements to acquire a majority 60% interest in two Singaporean finance companies, Hup Hoe Credit Pte. Ltd. (HHC) and ICS Funding Pte. Ltd. (ICS), in line with its ongoing regional expansion. Through these acquisitions, the company will strengthen its presence in the credit funding sector in Singapore.
CI1’s shares were up by over 15% during the intraday trade as on 10 May 2019.
Both the business that the company is going to acquire are involved in credit funding and located in Singapore. HHC provides personal loans while ICS provides credit financing to corporates. Both these are established and profitable businesses and have many existing synergies with Credit Intelligence.
The HHC Share Purchase Agreement price comprises SGD$1,235,294 in cash and 80,990,951 fully paid ordinary shares in the company. The ICS Share Purchase Agreement price comprises SGD$1,764,706 in cash and 115,701,349 fully paid ordinary shares in the Company.
A significant portion of the purchase price of the HHC and ICS acquisitions will be paid to the respective vendors in company shares which will allow the company to retain capital to achieve its stated objectives, including to further establish its Australian operations. As per each share purchase agreement, the number of consideration shares in Credit Intelligence to be issued is based on an exchange rate of SGD$1 to AUD$1.0407.
In today’s announcement, the company has stated that it is committed to expanding its operations in Australia in credit funding, which includes debt restructuring and insolvency practice. Currently, the Company is actively looking at acquisitions and/or joint ventures to achieve this objective.
The company is planning to rely upon its strong and profitable Hong Kong operations to financially support its Australian operations during the initial start-up phase and provide future capital to continue the group’s growth into the Australian market.
The company is planning to enter the Australian insolvency market by progressively establishing local offices throughout Australia either by acquiring existing insolvency businesses, employing experienced Australian insolvency practitioners or a combination of both.
To start its expansion in Australia, the company had entered a strategic alliance with leading Australian business insolvency and advisory firm Cor Cordis in Q4 CY18.
Now, let’s have a glance at the company’s stock performance and the return it has posted over the past few months. The stock traded at a price of $0.015, up by 15.385% during the day’s trade with a market capitalisation of ~$10.67 Million as on 10 May 2019. The stock has provided a year till date return of -31.58% & also posted returns of -27.78%, -23.53% & 8.33% over the past six months, three & one-month period respectively. It had a 52-week high price of $0.024 and touched 52 weeks low of $0.007, with an average volume of ~305,057.