It says it hasn&rsquo t been able to complete its FY2023 audit or prepare its annual report by Jul 29, the extended deadline

 

MERCURIUS Capital Investment said on Thursday (Jul 4) that it is unable to convene its annual general meeting (AGM) for its financial year ended Dec 31, 2023 by the extended deadline of Jul 29.

 

This is because of payments outstanding to its auditors and accountants, &ldquo which have resulted in a disruption of their critical services&rdquo necessary for the preparation of its FY2023 annual report, it said in an update to shareholders.

 

The investment holding company is therefore unable to complete the audit for FY2023 &ldquo in a timely manner&rdquo , in order to publish its annual report and convene the AGM by Jul 29.

 

Mercurius principally engages in the investment and development of properties in Singapore and Malaysia, though it diversified into the grocery business in 2021.

 

The company said that it is &ldquo actively pursuing&rdquo funding to ensure liquidity for its operations and financial obligations, and that this funding would enable it to settle outstanding fees, including those necessary to proceed with the audit, for FY2023.

 

It added that it has applied, through its continuing sponsor, to the Singapore Exchange Securities Trading (SGX-ST) for a waiver of the requirement to maintain an escrow account, as specified under Catalist rules.

 

Catalist rule 1017(1)(a) requires a cash company like Mercurius to place 90 per cent of its cash and short-dated securities in an account opened with and operated by an escrow agent, who must be from a licensed and approved financial institution.

 

Mercurius said: &ldquo SGX-ST&rsquo s approval of this waiver will facilitate the company in repaying creditors upon successful receipt of funding, resolve the outstanding financial matters to ensure the timely completion of the FY2023 annual report and convene the AGM as soon as practicable.&rdquo

 

On a separate note, the company said it will not issue a sustainability report &ndash another requirement under Catalist rules &ndash for FY2023.

 

&ldquo The main purpose of sustainability reporting is to give stakeholders a comprehensive view of the company&rsquo s sustainability in terms of environmental, social, and governance factors.

 

&ldquo Since the company lacks a revenue-generating business and operations and is currently a cash company, a sustainability report for FY2023 would not be relevant or meaningful.&rdquo

 

Mercurius Capital Investment, which has investments in hotels, is taking longer to complete the acquisition of a groceries business Songmart Holdings.

 

The $36 million acquisition, first announced back in July 2021, was meant to help the company find a new earnings stream as the pandemic hits hospitality industries worldwide.

 

In an announcement on July 4, Mercurius says both parties have entered into a second supplemental letter to extend the long-stop date for the completion from April 11 to Aug 31 so as to give more time for required conditions to be fulfilled.

 

Mercurius is funding the acquisition by issuing 200 million new shares in three equal tranches at 18 cents each.

 

The third tranche is to be issued upon the acquisitions meeting earnings targets of RM16.5 million for FY2023. Adjustments are allowed if otherwise.

 

According to the updated agreement on July 4, in addition to the achievement of certain profit targets for FY2023, the issue of new shares forming the third tranche will be subject to full settlement of banking facilities amounting to RM14.1 million granted by Alliance Bank Malaysia to Songmart.

 

The number of shares in the final tranche will be adjusted to the extent of the amount of unpaid banking facilities, if any, at Mercurius&rsquo sole discretion.

 

&ldquo The proposed acquisition is strategically important to the group and we are excited about our plans to expand the supermarket business in Malaysia and beyond,&rdquo says Mercurius&rsquo executive chairman Chang Wei Lu.

 

&ldquo The group is well on track to achieve more than 500 stores in time to come,&rdquo he adds.

 

Mercurius also says that with the extension, the vendors have &ldquo expressly and irrevocably&rdquo assigned all their economic benefits of Songmart&rsquo s net profits with effect from July 1 2022 till the completion of the deal, to Mercurius.

 

In the event the deal is terminated, the economic benefits will not be refunded.