Addvalue shareholders seek answers on spin-off of unit for Nasdaq listing
Key areas raised cover financial reporting transparency, strategic investors
Addvalue Technologies has addressed shareholder inquiries regarding the proposed spin-off of its wholly-owned subsidiary, Addvalue Solutions (AVS), and the upcoming Nasdaq listing. The extraordinary general meeting scheduled for September 24 will see shareholders vote on this proposal. AVS focuses on business and commercial activities involving the Inter-Satellite Data Relay System (IDRS).
Financial transparency emerged as a key concern. Shareholders questioned whether the parent company will continue to consolidate AVS's financials, which could complicate evaluations due to differing accounting standards between the US and Singapore. The company clarified that it aims to provide greater visibility into the group's different businesses post-spin-off, with shareholders continuing to receive consolidated financial statements in accordance with applicable accounting standards.
Supplemental information on the remaining AVT group will be considered, subject to regulatory requirements and accounting standards.
The decision to spin-off AVS stems from the group's desire to eliminate any potential "conglomerate discount," allowing analysts and investors to assess the group's distinct operations independently. However, shareholders have questioned the effectiveness of this strategy, particularly given that the parent company will still incorporate AVS's financials into its consolidated statements.
In response to concerns about which business segment will record work done for the spin-off group, Addvalue clarified that revenue generated by Addvalue Innovation, its wholly-owned subsidiary, will be recorded in the relevant business segment of the remaining group, with inter-company transactions eliminated upon consolidation.
The company also addressed the involvement of a project consultant team engaged for the transaction, explaining that they are targeting strategic investors with expertise in various sectors, including commercial space, satellite communications, earth observation, and aerospace. These partners could provide critical industry expertise and support for geographic expansion. However, the specific participants in these partnerships remain unfinalised, pending market conditions, investor interest, and regulatory requirements.
Written by urgent.news from The Business Times - Companies & Markets's reporting — not their text. Machine-written — may contain errors; check the original before relying on it.
