Osim International, well-known for its massage chairs, is on track to become a substantial shareholder of Trek 2000, inventor and patent owner of the ThumbDrive™ and Flucard®.
Trek 2000 said it entered into a conditional agreement yesterday (24 June) to place out 24,000,000 new shares and sell 1,000,000 treasury shares to OSIM for S$10.91 million.
What is generally not known is that OSIM is already an existing shareholder of Trek. Trek revealed yesterday that OSIM already held 3,374,600 shares.
OSIM had expressed interest in increasing its investment in Trek. Upon completion of the proposed share deal, OSIM’s equity interest will increase from 1.14% to 8.75%.
OSIM will be the No. 4 largest shareholder after Trek chairman Henn Tan, Toshiba Corporation and Creative Technology.
Trek, in addition, has entered into an agreement with RHB Securities Singapore whereby the latter will procure subscribers for up to 2,000,000 new Trek shares.
In total, Trek will sell 26,000,000 new Trek shares, which represent 8.75% of the company’s existing issued share capital (excluding treasury shares).
The sale price for each new share or treasury share is S$0.4365. Trek's share price closed at 47 cents on the open market yesterday before a trading halt in the afternoon.
Trek's share price has a solid 1-year return of 140%, which raised the company' market cap to S$140 million.
The proposed transactions will reap net proceeds of $11.58 million to support the growth and expansion of Trek and its subsidiaries.
Equal amounts (ie 50% each) will go towards R&D (particularly for medical diagnostic technology) and general working capital.
Details can be found in the Trek news release here.