REG - Bowen Fintech PLC - Proposed Acquisition and Suspension of Trading

Bowen FintechAnnouncement

22/12/2023 07:45

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RNS Number : 7584X  Bowen Fintech PLC  22 December 2023

 

The information contained within this announcement is deemed to constitute
inside information as stipulated under Article 7 of EU Regulation 596/2014
(which forms part of domestic UK law pursuant to the European Union
(Withdrawal) Act 2018). Upon the publication of this announcement, this inside
information is now considered to be in the public domain.

 

22 December 2023

 

Bowen Fintech plc

("Bowen" or the "Company")

 

Proposed Acquisition and Temporary Suspension of Trading in the Company's
Ordinary Shares

 

Bowen (LSE: BWN), a special purpose acquisition company formed to acquire
businesses in the technology innovations sector with a focus on the financial
services industry, is pleased to announce that it has signed conditional,
non-legally binding heads of terms to acquire 93.49 per cent of the issued
share capital of MINNADEOOYASAN-HANBAI Co., Ltd ("MOH") ("Acquisition").

 

About MOH

 

MOH is a leading crowdfunding services platform in Japan and solution provider
for investors seeking returns from investment into real estate. MOH was
incorporated in 1998 with its head office in Tokyo, and is regulated under the
Real Estate Specified Joint Venture Act. It commenced crowdfunding services in
2007.

 

In the last 16 years, MOH has arranged over JPY 217 billion (c. £1.3 billion)
in capital raising from the Japanese market, with approximately JPY 62 billion
(c. £378 million) raised in its financial year ending 31 March 2023.

 

MOH is majority owned by Kyosei Bank Co., Ltd ("KBC"), a privately owned
company in Japan, and provides crowdfunding services to a property holding and
management company within the same corporate group as KBC. This provides MOH
with a proprietary pipeline of projects to facilitate funds for, and (where it
has the resources to do so) occasionally MOH itself may participate in, the
acquisition of land for development.

 

In addition to traditional real estate asset classes such as residential and
commercial, MOH is seeking to facilitate funding for technology-driven
commercial projects, such as cold-chain logistics facilities, state-of-the-art
medical facilities and the revival of traditional cultural parks. MOH intends
to participate in building cutting-edge cold-chain logistics infrastructure in
Japan and expects to replicate this model in ASEAN countries and beyond in the
future as part of its growth strategy.

 

MOH is profitable, reporting EBITDA of JPY 519 million (c. £3.2 million) on
revenues of JPY 5.6 billion (c. £34.3 million) in the year to 31 March 2023.
In the six-month period to 30 September 2023, MOH management accounts reported
(unaudited) EBITDA of JPY 2.1 billion (c. £11.6 million) on revenues of JPY
4.9 billion (c. £27.8 million). Unaudited net assets as at 30 September 2023
were JPY 4.8 billion (c. £26.4 million).

 

The directors of MOH are of the opinion that a listing by way of a reverse
takeover of Bowen by MOH  (the "Enlarged Group") will enhance its brand and
profile in Japan and internationally, enable access to additional real estate
portfolios internationally, thus diversifying risk, and access to fresh equity
capital in the future to accelerate its growth strategy, particularly in the
area of technology-related real estate.

 

The listing will also support MOH in attracting and retaining senior
professionals both locally in Japan and internationally. Following the
Acquisition, it is the intention of the Enlarged Group to grow its presence in
the UK.

 

The Acquisition

 

The Company has entered into conditional, non-legally binding heads of terms
with MOH and KBC to acquire 93.49 per cent of the issued share capital of MOH
from KBC for a consideration of approximately £34.47 million to be satisfied
through the issue of new ordinary shares of 1p each in the Company ("Ordinary
Shares"), at a price of 15p per new Ordinary Share (the "Offer Price"). The
Offer Price represents a premium of 25 per cent to the closing middle market
price of 12p per Ordinary Share on 21 December 2023, being the closing middle
market price the day prior to the release of this announcement.

 

The Acquisition is conditional upon, among other things:

·    the completion of satisfactory due diligence by both parties;

·    the negotiation and the entry into legally binding documentation;

·    any requisite third party consents being obtained;

·    the re-admission of the Company's enlarged share capital to the
Official List of the Financial Conduct Authority ("FCA") (by way of a Standard
Listing under Chapter 14 of the Listing Rules) and to trading on London Stock
Exchange Group Plc's (the "LSE") Main Market for listed securities; and

·    a waiver being granted by the Panel on Takeovers and Mergers of any
requirement under Rule 9 of the Takeover Code that would otherwise arise on
KBC to make a general offer to the Company's shareholders as a result of the
issue of the new Ordinary Shares at the Offer Price to it on completion.

 

It is currently anticipated by the directors of Bowen that on re-admission the
market capitalisation of the Enlarged Group would be approximately £42.72
million, based on the Offer Price, with KBC holding approximately 80.7 per
cent of the issued share capital of the Enlarged Group and existing Bowen
shareholders holding approximately 19.3 per cent of the issued share capital
of the Enlarged Group.

 

Subject to review of the Enlarged Group's working capital, it is not intended
that new capital will be raised as part of the Acquisition and re-admission.

 

Suspension of Ordinary Shares

 

The Acquisition will on completion constitute a reverse takeover under Chapter
5.6 of the FCA's Listing Rules since, inter alia, in substance it would
result in a fundamental change in the ownership and business of the Company.
The Company has therefore applied for and has been granted a temporary
suspension of the listing on the Official List of the FCA of its Ordinary
Shares and its trading on the Main Market for listed securities with effect
from 7.30 am this morning until such time as it publishes a prospectus in
relation to the Acquisition or it being announced that the Acquisition will
not proceed.

 

As the Acquisition would constitute a reverse takeover under the Listing
Rules, on completion of the Acquisition, application would need to be made to
the FCA and the LSE for the immediate re-admission of the issued and to be
issued share capital of the Enlarged Group to the Official List (by way of a
Standard Listing under Chapter 14 of the Listing Rules) and to trading on the
LSE's Main Market for listed securities.

 

Further announcements will be made, as appropriate, in due course.

 

 

Enquiries

 

 Bowen Fintech plc              c/o +44 (0)204 582 3500
 Aamir Quraishi, Chairman

 Cairn Financial Advisers LLP   +44 (0)207 213 0880
 Emily Staples, Jo Turner

 Gracechurch Group              +44 (0)204 582 3500
 Harry Chathli, Claire Norbury

 

 

Caution regarding forward looking statements

Certain statements in this announcement, are, or may be deemed to be, forward
looking statements. Forward looking statements are identified by their use of
terms and phrases such as ''believe'', ''could'', "should" ''envisage'',
''estimate'', ''intend'', ''may'', ''plan'', ''potentially'', "expect",
''will'' or the negative of those, variations or comparable expressions,
including references to assumptions. These forward-looking statements are not
based on historical facts but rather on the Directors' current expectations
and assumptions regarding the Company's future growth, results of operations,
performance, future capital and other expenditures (including the amount,
nature and sources of funding thereof), competitive advantages, business
prospects and opportunities. Such forward looking statements reflect the
Directors' current beliefs and assumptions and are based on information
currently available to the Directors.

 

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