| • The business of Trendlines Group requires plenty of capital to nurture and grow start-ups in the medical device and agritech fields. • Thus, from time to time, Singapore-listed, Israel-headquartered Trendlines has been raising funds from the market to keep its portfolio of start-ups going. Trendlines just did a rights issue in May 2024. Surprisingly, now (4 July after-market announcement) it has proposed to do a placement of its shares. • Maybe any time is a good time -- so long as there's a queue to buy your shares. Well, there are 15 investors who want its shares via this placement at 6 cents/share. |
Full list of investors here.
The rights issue in May 2024 raised net proceeds of S$3.7 million at 6 cents/share.
It was to "strengthen the financial position and capital base of the Group, which would enhance the Group’s ability to finance its investments into existing portfolio companies."
Now, the proposed placement exercise is estimated to raise S$4.44 million in net proceeds.
But first, Trendlines is required to seek shareholders' approval at a to-be-convened meeting for the placement of shares.
Among the 15 interested investors is Librae Holdings, which is its controlling and substantial shareholder.
Librae first became a shareholder in 2019 when it took up a placement at 10.5 cents/share. Overnight, this vaulted it to the No.1 shareholder position with a stake of 14.55%.
Librae's sole beneficiary is London-based billionaire Vincent Tchenguiz who has invested in biotechnology and real estate and venture funds.
Librae has grown its Trendlines stake to 29.41% currently via several rounds of capital injections.
Assuming a successful placement in the latest round, its stake will reach 29.82% of the enlarged share capital.
Giving its rationale for the placement, Trendlines said it noted the active interest from new investors as well as existing shareholders to invest in the company, "as evinced by the Rights Issue Exercise being oversubscribed, and would hence like to leverage on such interest to raise additional funds."
"Given the capital-intensive nature of the Group’s business, and the unpredictability of its cash flows amidst a difficult macro-economic environment and the ensuing war in Israel, the Company believes it is in its best interests to have more cash for investment."
The additional funds will be mainly invested in its portfolio companies, currently numbering 44.
 Trendlines' stock has been range-bound in the past 5 years. A potential catalyst is news of a large sale of any of its relatively mature portfolio companies.For some time investors have been waiting for news of Trendlines' sale of promising companies that are more mature. Hopes were raised in October 2023 when Trendlines said it had received a Non-Binding Letter of Intent for the acquisition of a portfolio company. However, subsequently in Feb 2024, it was announced that the parties were unable to reach a definitive agreement, and the LOI was cancelled. The overarching goal of Trendlines was reiterated as recently as April 2024 when it said, in response to shareholder questions ahead of its AGM: "We are focusing our efforts wholly on our maturing portfolio companies with a view to bringing as many to exit as possible in the coming years. Concurrently, the Company has made organizational and structural changes to focus on our core business, while reducing operating costs. We believe that these changes steer our business to enable us to reach better results in 2024." |
For more on Trendlines, see its May 2024 PowerPoint deck here.
