Catalist-listed Sincap Group announced that it is acquiring 100% stake in Skylink APAC, a homegrown commercial motor vehicle leasing, hire purchase financing and related maintenance service provider, for $42.3 million in a reverse takeover (RTO) transaction.

 

Skylink APAC would then obtain its public listing status upon successful completion of the acquisition, supported by the investment by and under the leadership of corporate veteran Teh Wing Kwan.

 

Sincap was previously in the business of renewable energy semiconductor manufacturing. It traded alumina and thermal coal, as well as mines and sold gypsum in China.

 

The $42.3 million consideration comprises two parts.

 

First, a base consideration of $28.3 million, comprising $27.5 million to be satisfied by the allotment and issue of about 122.2 million new Shares at 22.5 cents per share and a balance sum of $0.8 million to be paid in cash on a date within 18 months from date of completion.

 

Second, a deferred consideration of up to $14.0 million in the form of an earn-out that is dependent on the adjusted accumulated net profit after tax of Skylink APAC for FY2025 and FY2026 (financial years ending Mar 31) of not less than $7.3 million. Up to $12.5 million of the Deferred Consideration will be satisfied by the allotment and issue of about 55.6 million new shares (on a post-share consolidation basis) at the issue price of 22.5 cents. The balance sum of $1.5 million will be payable in cash within 18 months from which the date the deferred shares are issued.

 

Skylink APAC was incorporated on Mar 4, 2025, to hold three subsidiaries &ndash Skylink Vehicle Rental that owns over 1,200 commercial vehicles to be leased out on a B2B basis Skylink Credit that proviced hire-purchase loans and motor vehicle financing solutions and Skylink Engineering that operates in-house workshops to maintain, repair and maximise the lifespan of the commercial fleet, and to meet safety standards, as well as offer such services to other types of motor vehicles in Singapore.

 

The group was established by Wesley Shen Wende, Grace Xue Wanqui and Johnson Shen Yongzhong. Wesley and Johnson are CEO and COO of the company. Skylink APAC is part of the larger Skylink Group, which is involved in automobile trading and sales activities under Skylink Auto which, as agreed by the parties, has not been included in the proposed acquisition as it requires differentiated fund-raising strategies.

 

Teh says: &ldquo I embarked on this undertaking with great care while searching for a viable RTO target that can align the interests of various stakeholders. It is my firm belief that this strategic transformation represents a feasible option for Sincap&rsquo s shareholders as the group charts new corporate and investment strategies.&rdquo

 

Wesley Shen says: &ldquo The entire team at Skylink APAC is excited by the corporate exercise which will open a dramatic new chapter for our fast-growing company. A listed platform will propel Skylink APAC&rsquo s growth strategies in the leasing of commercial vehicles, providing hire purchase credit and financing solutions, and operationally supported by related engineering and maintenance services.&rdquo

 

He adds: &ldquo While Skylink Auto is not part of the proposed acquisition, the overall Skylink Group eco-system (Skylink APAC and Skylink Auto) recorded combined revenue of approximately $95 million for FY2024, and continues to grow rapidly.&rdquo

 

CATALIST-listed Sincap Group has extended the repayment deadline for at least US$6 million due from Artwell, a company solely owned by the brother of Sincap' s chief executive, to April next year.

 

In a Friday bourse filing, Sincap said that repayment from Artwell, which buys coal from the company, from September onwards will be deferred. Artwell will repay US$6 million by April 28, 2021 instead. Artwell' s sole director and shareholder is Chu Min Fang, the brother of Sincap' s executive chairman and CEO, Chu Ming Kin.

 

After repaying the US$6 million, Artwell will continue to pay at least US$1 million per month on the 28th of each month. An interest of 7.5 per cent per annum will continue to accrue on all outstanding amounts.

 

Sincap' s announcement comes after the bourse queried the company in April about its ability to remain a going concern. In its annual report for FY2019 ended December, Sincap had 252.1 million yuan (S$51.4 million) in current trade receivables, of which 225.3 million yuan were due from a related party.

 

In assessing that the company remains a going concern, Sincap in the Friday filing said that repayment from Artwell has been prompt in the past, that Mr Chu Ming Kin has a " good relationship" with the company and that he has personally flown to meet his brother to discuss the repayment schedule.

 

Artwell had asked Sincap for a deferment of six months till April 2021, as it has faced disruptions in its operations caused by the pandemic. Chinese coal output fell " drastically" as workers could not return to power plants.

 

Separately, a group of shareholders have provided letters of undertaking to Sincap to provide continuous financial support for the company is able to meet its obligations. These shareholders are Mr Chu Ming Kin, Chen Jianming, Huang Qingquan, Sze Wai Bun Raymond, Wang Xiaoling and Zhu Shiyan.

 

Mr Chu has extended S$121,887 to the company in the form of an interest-free loan and has provided a verbal confirmation to the company and the board that he will provide a further S$200,000 as interest-free loans to the company by Dec 15, 2020.

 

" The board has considered and have determined that the group will be able to continue operating as a going concern, on the basis that with Mr Chu Ming Kin' s investment of S$321,887, the group will be able to meet its debt obligations for the next 12 months," Sincap said in its filing.

 

Trading in shares of Sincap has been halted since Dec 2.