Impoverished APAC Coal tries to buy debt manager
APAC Coal plans to become a debt management company — which is ironic since it seems to be struggling with its own finances.
At the end of last month APAC had the princely sum of $8000 in the bank — but planned to spend $39,000 this quarter.
The ex-miner has entered a share purchase agreement to buy Hong Kong businesses Credit Intelligence Holdings in exchange for 533 million shares.
APAC (ASX:AAL) plans to issue 250 million shares to raise up to $5 million and consolidate existing shares at a ratio of 1 to 3.4681.
The sellers will own 65 per cent of the new business — not that this will seriously affect many small investors. Almost 95 per cent of the company is owned by the top twenty shareholders.
APAC has been a shell since a previous reverse takeover of a Chinese food trading company fell over in February after the ASX refused to give its blessing.
Attempts at finding coal tailed off after 2013 when it took the Indonesian government to court for alleged expropriation of rights over the Batubara Selaras Sapta coal concession in East Kalimantan.
That case stalled in 2015 and it’s now still in arbitration with the International Centre for Settlement of Investment Disputes.
APAC’s debt manager acquisition depends on the Hong Kong business first becoming the ultimate parent company of Hong Kong Debt Management, Hong Kong I.V.A. Consultants and Hong Kong Debt Management Services.
So there’s still a chance this backdoor listing won’t be the saviour APAC investors are looking for.
Credit Intelligence plans to replicate its model for small bankruptcies in Australia, which it sees as ripe for some small-time debt collapses.
“This opportunity is due to Australia’s record household debt to income ratio and historically low level of wages growth,” APAC told investors on Monday.
“It has also been reported that homeowners, consumers and property investors around Australia are making more calls to financial helplines, creating a need for more debt management services to be accessible by the Australian public.”
APAC is holding on thanks to the financial backing of majority shareholder and financial manager Magnus Energy Group.
In 2017 it made a loss of $236,000 and had net liabilities of $155,000.
However, almost all of that loss was made up of fees.
Administration expenses totted up to $35,000, and travel and accommodation was $77,000 — double the year before. Personnel expenses hit $100,000, professional fees were $144,000 and management fees were $200,000.
APAC last traded at 0.5c, and has been contacted for comment.