Addvalue shareholders approve spinoff of unit, share dilution for Nasdaq listing
A new entity, incorporated as a holding company of Addvalue Solutions, will undertake an IPO of its shares
The shareholders of Addvalue Technologies have approved a significant change in their company's structure. A new entity, also known as Addvalue Solutions (AVS), will undertake an initial public offering (IPO) of its shares and be listed on the Nasdaq stock exchange. This spinoff is part of a strategy to separate AVS's business and commercial activities, particularly those involving the Inter-Satellite Data Relay System (IDRS).
The IDRS system is crucial for establishing connections between network operators and their space assets.
Following the approval, Addvalue will experience a dilution of its indirect equity interest in AVS. This dilution is expected to be no more than 30 percent due to the issuance of new holding company shares during the IPO and the allocation of underwriter fee shares. The company's pre-tax profits for the 2026 financial year were primarily driven by AVS, which accounted for 24 percent of the group's pre-tax profits.
The decision to spin off AVS was primarily to eliminate any potential "conglomerate discount", allowing analysts and investors to independently evaluate the distinct operations of each entity. However, some shareholders raised concerns about the complexity of evaluating the remaining business due to the differing accounting standards in the US and Singapore.
Additionally, investors sought clarification on the role of the project consultant team involved in the transaction, questioning their involvement in identifying strategic partners and their support for future growth. As a result, Addvalue's shares dropped by 2.6 percent to close at S$0.185 on Thursday, just before the announcement.
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.
