KUALA LUMPUR (Oct 5): Techna-X Bhd has dropped plans to backdoor list its 50%-owned Chinese capacitor technology subsidiary HK Aerospace Beidou New Technology Co Ltd (HKAB) using Singapore-listed Chaswood Resources Holdings.

In a bourse filing on Wednesday (Oct 5), Techna-X said the group, along with the shareholders of the remaining 50% interest in HKAB and Chaswood had entered into a deed of termination to mutually terminate a sale and purchase agreement (SPA) dated Dec 27, 2021.

“This collective decision was arrived at given the inadvertent delay in completing the relevant due diligence and corporate restructuring exercises of HKAB in connection with the reverse takeover offer (RTO), stemming from the incessant travel, movement and other restrictions implemented by the authorities in China in its pursuit of zero-Covid policy,” Techna-X said.

“Pursuant to the above circumstances and after consideration, the parties concur that the timeline prescribed by the Singapore Exchange Ltd (SGX) to submit the RTO application by Jan 31, 2023, could not be met and therefore it will be in the best interest of the parties to mutually terminate the SPA dated Dec 27, 2021.”

Techna-X noted that apart from the preliminary administrative and professional costs amounting to RM355,184, the group does not anticipate any other financial loss to be incurred in relation to the scrapped deal.

Pursuant to the SPA, Techna-X was to dispose of its 50% stake in HKAB for S$339.28 million to Chaswood in exchange for 8.93 billion new Chaswood shares at 3.8 Singapore cents apiece as part of the transaction.

Meanwhile, Chaswood was to acquire the other 50% in HKAB from Dr Wan Muhamad Hasni Wan Sulaiman (25%), Nong You Hua (15%) and Satriya Suetoh (10%) in exchange for the same price and consideration.

The agreement would have resulted in Techna-X owning 48.2% of Chaswoods’s enlarged share capital, with another 48.2% owned by Wan Muhamad Hasni, Nong and Satriya, while Chaswood would own the entire 100% interest in HKAB.

Previously, Techna-X described the exercise as “essentially a backdoor listing” of HKAB via Chaswood, which would enable the group to unlock value by monetising and securitising its investment in HKAB, by creating a separate listing platform for HKAB on the Catalist Board of the SGX.

Shares in Techna-X Bhd ended half a sen or 16.67% lower at 2.5 sen, valuing the group at RM55.37 million.