Rex International Holding’s wholly-owned subsidiary Moroxite Holding Pte. Ltd. has entered into a conditional share purchase agreement (SPA) with Moroxite AB on Dec 30.
Under the SPA, Moroxite Holding will purchase entire issued share capital of Moroxite T AB comprising 1,000 shares at a nominal consideration of 1 Swedish krona (13 cents) from Moroxite AB with a commitment to invest up to an additional 43.2 million Swedish krona ($5.6 million), subject to the fulfilment of certain conditions. The sum will be satisfied in cash.
Moroxite T is a medtech company incorporated in Sweden with a total issued and paid-up share capital of 25,000 Swedish krona, divided into 1,000 fully paid-in registered shares with a nominal value of 25 Swedish krona each. As a long-term project, Moroxite T is developing a new device or a combined pharma medtech product in the tumour area.
Of the additional 43.2 million Swedish krona, a non-refundable capital contribution of 9.4 million Swedish krona will be paid in a manner that’s to be agreed between Moroxite Holding, Moroxite AB and Moroxite T.
Moroxite Holding will also pay Moroxite AB an additional purchase price of 15 million Swedish krona following the fulfilment of certain conditions pertaining to getting at least one patent granted by either European or US patent authorities, as well as the approval of the acquisition by Rex’s shareholders at an extraordinary general meeting (EGM) before May 30, 2023.
Moroxite Holding will also provide Moroxite T additional financing of up to 18 million Swedish krona upon the completion of completion of additional milestones such as successful scientific studies, clinical trials as well as marketing and production plans.
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The transaction is constituted as an interested person transaction (IPT) as Dr Karl Lidgren and Hans Lidgren are controlling shareholders of Rex International with a 34.71% deemed interest held through Limea Ltd., in which each of Hans Lidgren and Cresta Group Ltd have a 50% shareholding interest respectively. Cresta is in turn wholly-owned by Karl.
Moroxite AB is 39.6% held by a company owned by Dr Lars Lidgren, brother to Karl and Hans. The remainder 60.4% is held by other investors.
Upon its completion, Moroxite Holding will hold 100% of Moroxite T. Karl is also a non-independent and executive director of Rex International. As such, Moroxite is an "interested person" under the Mainboard rules.
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Under the terms and conditions of the share purchase agreement, Moroxite AB will receive from Moroxite T, a 5% royalty on sales of products achieved by Moroxite T. If an initial public offering (IPO) or reverse takeover (RTO) of Moroxite T takes place, Moroxite AB’s right to royalty shall remain for 8 years (unless a sale occurs) from the IPO/RTO, but at a rate of 3%.
Until a sale of Moroxite T takes place or until an IPO and/or RTO of Moroxite T, Moroxite AB shall receive 40% of the profit on any license sales by Rex International.
As the aggregate amounts relating to the acquisition (including any royalties and profits on license sales) cannot currently be estimated by Rex, the company will be convening an extraordinary general meeting (EGM) to seek shareholders’ specific approval for the acquisition.
According to Rex, it has been seeking to diversify its business to include sustainable solutions for energy production and materials used in various industries.
Shares in Rex International closed flat at 21.5 cents on Dec 30.
