SYDNEY: Australian-listed medical technology company Uscom Limited said on Tuesday it has agreed to sell its entire business and assets to Singapore-based investment fund AXO Medtech VCC, a move aimed at rescuing the loss-making firm.
The sale, which is subject to shareholder approval at a general meeting scheduled for Nov. 11, will see Uscom divest its 100% subsidiary, Uscom Sng Pte. Ltd (UCM SNG), which holds all of Uscom’s intellectual property and global assets, for a consideration of S$2.591 million.
Uscom, which has faced years of losses and negative cash flow, cited difficulties in raising sufficient capital in the Australian market to develop its global operations as a key reason for the deal.
“The sale of the Uscom assets and businesses to a Singapore based investment fund is… the strategy that will most likely allow the Uscom business to raise the capital to enable it to transform into a profitable business,” the company’s directors said in a statement.
Under the agreement, the purchase price will be used to settle existing loans owed by Uscom to its executive chairman, Professor Rob Phillips, and substantial shareholder Jetan Pty Limited, totaling S$2.591 million.
Upon completion, Uscom will be left with cash assets of approximately S$200,000, a small amount of trade assets and liabilities, and no other business assets. The company said it would then ask the ASX to lift a trading suspension on its shares and would consider either winding up the company and returning cash to shareholders or acquiring a new business.
AXO Medtech VCC, a variable capital company incorporated in Singapore in December 2023, plans to continue operating all current Uscom subsidiaries, retain its approximately 60 employees, and raise capital to accelerate the development of the global operations.
The consideration of S$2.591 million values Uscom shares at 0.996 cents each, below its last traded price of 1.2 cents on Sept. 23.
Settlement of the deal is expected around Nov. 25, if approved.