Asia-Pacific Strategic Investments

Asia-Pacific Strategic Investments (APS): The loss-making bereavement care services provider, APS is trying again to turn its business around, after announcing plans for a reverse takeover (RTO) deal to become a mining play. APS has entered into a non-binding MOU with businessman George Richmond to acquire mining rights for two mines in Armenia. This will be done through a purchase from Mr Richmond of the entire stake in Couer Gold Armenia, which controls the two companies with the mining rights for gold, silver, copper and antimony at the Azatek and Sofi Bina mines. APS will pay for these rights with cash, as well as by issuing new shares to Mr Richmond. These consideration shares will give him ~60% of the enlarged share capital of the company when the transactions are completed. Separately, APS also entered into an MOU yesterday with investment holding company China Global Energy and Resources (CGER) for a share placement to raise ~$200m in funds. These funds will be used for the cash consideration for the rights, as well as for working capital and business operations. CGER will subscribe for ~30% of the enlarged share capital in APS following the acquisitions of the mining rights. The two deals are conditional on each other going through. Current shareholders in APS are expected to make up the remaining 10% of the enlarged base after the RTO. The company expects the entire process, from doing due diligence to obtaining shareholder approval, to take about 5 to 6 months. Mr Richmond has indicated that operations at the two Armenian mines may be able to start 3 - 6 months after the completion of the deals, "which can immediately bring in the revenues, and if possible, the profits to the group". Shares in APS sprang to life following the news, closing at 18.6¢ after a trading halt was lifted, more than double the previous closing price of 8.3¢. This is the latest attempt by APS to right its ship in recent times. Last April, it struck a $568m agreement with engineering company Bright Eagle Enterprises Group in an RTO deal. Despite several extensions, the deal fell through in May this year. Later that same year in May, APS tried to acquire a 51% stake for Prometheus Venture One Limited, which develops commercial properties for the Shanghai Metro System. That proposed acquisition lapsed at the end of last month.