OMI Holdings (OMI) will announce shortly that it's entering a deal with Donaco (DNA) to assume control of iSentric a company that supplies technology services to Donaco’s core hotel and casino business in Vietnam.
This includes advising on the property management system, loyalty program, third party system integration, and network design.
iSentric is targeting opportunities in the areas of mobile commerce, content publishing, and location-based services.
Donaco CEO, Joey Lim, says: “We feel that the time is right to allow iSentric to pursue its own growth path in the rapidly evolving m-commerce space.
"Establishing iSentric as a separate ASX-listed company will enable it to receive the proper focus from investors, who have been eager to follow similar businesses operating in this space.
"The transaction will also confirm Donaco as a pure play entertainment and leisure business, tapping the huge demand for gaming services from the expanding middle class in Asia.”
Donaco has signed a Transaction Implementation Deed (TID) with OMI which in October announced a JV MOU with Purus Health & Medical for the commercialization of OMI's SharpeSafe syringe product.
OMI is likely to shortly announce the outcome of the MOU negotiation.
Meantime the TID values iSentric at $12 million.
Donaco purchased iSentric for $8.5 million in scrip, wit h the acquisition completed on June 1, 2013.
The Transaction represents an increase in value for Donaco of 41% on its investment, over 11 months (assuming the transaction completes by May 2014).
OMI will issue 228,604,384 shares to Donaco. In return, Donaco will transfer its 100% ownership of iSentric Sdn Bhd to OMI.
The combined entity will have a total of 254,430,619 shares on issue, following the conversion of all OMI convertible notes.
So Donaco will own 89.85% of the combined entity.
Current OMI shareholders and convertible note investors will own 10.15%. Donaco then intends to distribute its shares in the combined entity to Donaco shareholders in specie.
This will be done essentially on a pro rata basis, subject to discussions with ASX.
Holders of Donaco shares worth more than a minimum threshold (to be announced), at a date to be set, will receive shares in the new entity at no cost.
OMI intends to seek the relisting of its shares and will consider another consolidation to meet the minimum price of 20 cents per share.
OMI may also issue further shares under a prospectus, to ensure that it meets the minimum spread requirements.
The parties intend to execute a Share Sale and Purchase Agreement covering the transfer of iSentric shares to OMI, and the issue of OMI shares to Donaco.
The Transaction will be subject to approval by OMI shareholders at an EGM, currently proposed to be held in May 2014.
The EGM notice will be accompanied by an independent expert’s report.
ICU Price at posting:
0.0¢ Sentiment: Buy Disclosure: Held
