Rex shares jump on $ 5.4 million investment in commercial drone company
SINGAPORE (BUSINESS HOURS) – Rex International has entered into a subscription agreement to invest up to US $ 4 million (S $ 5.4 million) in commercial drone company Xer Technologies, it announced Tuesday (July 6th).
The investment includes US $ 1 million for a 40% stake in Xer Technologies, a company incorporated in Singapore, and a commitment to inject up to US $ 3 million into the company, subject to the completion of certain technical milestones. and commercial over the next 18 months.
The agreement is also conditional on the acquisition by Xer Technologies of a 100% stake in UAV Development Sweden for 50,000 crowns (S $ 7,866), which has its own drones developed in-house and is also a spin-off. of a security company that uses drone technology.
Rex shares jumped 5% at the start of trading on Tuesday after the announcement. The stock was up 0.5 cents, or 2.5%, to 20.5 cents at 11:22 a.m., with 16.45 million shares traded.
The acquisition is part of Rex International’s efforts to diversify from its core oil exploration and production business, and “will bring the group closer to its approved mandate of diversifying activities to include sustainable solutions. for power generation and materials used in various industries, ”the group says.
Rex International added that the move would allow it to have a stake in the global commercial drone market, which is expected to reach $ 501.4 billion by 2028, and record a compound annual growth rate of 57.5. % of this year to 2028.
The group said it would have the right to appoint two out of five directors to the board of directors of Xer Technologies, and would also support the company with the group’s management staff.
Xer Technologies, which has yet to begin operations, expects the long-range drones developed in-house to be commercially available in the fourth quarter of this year. It plans to target clients in the areas of infrastructure inspection, search and rescue, public safety and animal husbandry.
Rex International estimates that the unaudited pro forma net asset value of Xer Technologies as of December 31 of last year was approximately US $ 434,000. The total consideration of up to US $ 4 million represents 2.9% of US $ 136.86 million, which is the last net tangible assets of the group as of December 31.
Rex International shares were trading at 20 cents at 9:15 a.m. Tuesday.