FibreGen’s stake in HaloSource Inc may not be worth as much as originally thought.
Origo Sino-India and Origo Resource Partners is investing $10m in HaloSource for a fully diluted stake of 11%. That deal puts a value of $91m on HaloSource.
HaloSource is an antimicrobial technology developer that intends to use the technology to provide safe water and infection control. FibreGen’s 1.2% stake in HaloSource was acquired by Evergreen Securities for £1.08m in shares in May. This week FibreGen took the stake back as part of the sale of its Chinese joint venture. The stake was then transferred to St Peter Port Capital as part of a transaction to acquire the minority stake in Emerald Bio-Energy.
The HaloSource stake is effectively part of the security for the £3.1m of deferred consideration. This stake, and the 9% shareholding in pesticides developer Waihuna, will be transferred back to FibreGen when the payment has been made. However, St Peter Port Capital can sell all or part of the stake prior to the payment and subtract any cash raised from the deferred payment that is owed.
Assuming that stake has been diluted to 1.1% then it appears to be worth $1m, which is equivalent to around £500,000. That suggests that the stake is worth half the notional value placed on it earlier this year.
The Waihuna stake was estimated to be worth £2.9m. Even if this is still the case the two stakes together are valued at £3.4m, which is just above the £3.1m owed.
FibreGen’s shares were suspended at the start of trading on 18 July following the resignation of its nominated adviser.
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