On July 26, 2024, APOLLO FMG (00860.HK) announced that the seller (the company and Global 3D), the buyer Lateralus Holdings IV, LLC and the target company Divergent Technologies Inc. entered into a purchase agreement. On this basis, each seller conditionally agreed to sell and the buyer conditionally agreed to acquire the sale shares (which together represent approximately 12.87% of the target company's issued shares as of the date of the purchase agreement), at a price of approximately HKD 793.0 million. After the final subsequent delivery, the company and Global 3D will no longer hold any equity in the target company.
The target company is a private company registered in Delaware, mainly engaged in research, design, development and production of three-dimensional printing tool structures through its patented hardware and software platforms.
It is expected that the net proceeds from the sale of the item will be approximately HKD 790.0 million after deducting estimated transaction costs and professional fees of approximately HKD 3.0 million. The company plans to use the net proceeds from the sale of the item as follows: (i) approximately HKD 711.0 million for R&D of supercars and electric vehicles; and (ii) approximately HKD 79.0 million for general operating capital, including payment of salaries, legal and professional fees, and other general business purposes.
Considering that (i) holding shares in US military suppliers or contractors may expose the group to potential political and legal risks; (ii) the group has no other choice and the situation is so urgent that it cannot rely on this being an ordinary commercial transaction; (iii) the net proceeds from the sale of the item; (iv) the price of approximately HKD 793.0 million is significantly higher than the company's investment cost of approximately HKD 469.4 million in selling shares; (v) the price is similar to the fair value (measured by fair value) of the investment recorded in the company's most recently audited accounts; and (vi) the price is higher than the fair value of the shares being sold on June 30, 2024, as calculated by the valuer, the directors believe that the sale of the item provides the company with an opportunity to withdraw from its investment in the target company, enabling the group to reallocate its resources and energy to other more promising and suitable business opportunities. The terms of the purchase agreement were concluded on ordinary commercial terms and are fair and reasonable, so the sale of the item is in the overall interests of the company and shareholders.
In addition, the company has applied to the Stock Exchange for the resumption of trading of its shares on the Stock Exchange from 9:00 a.m. on August 8, 2024.