Editor’s Note: This article has been updated to include the company’s response in the third and fourth paragraphs.
Two board directors of ONE Championship have resigned from the Singapore-based mixed martial arts promoter, show recent filings from ACRA reviewed by DealStreetAsia.
They are Fock Wai Hoong, managing director at Singapore state investor Temasek Holdings, and Derek Lau, CEO of Heliconia Capital Management, which is a Temasek arm. Lau was appointed to the board in September 2016, while Fock joined the board last July.
In an email response to DealStreetAsia, Hua Fung Teh, Group President of Group ONE Holdings, said: “As part of our plans for a public listing, we are taking a number of technical steps to ensure that we have the right governance structure in place for various jurisdictions including the US. Temasek and Heliconia Capital remain fully engaged and supportive with our strategic direction.”
The firm added that it has appointed Goldman Sachs and Credit Suisse as its financial advisors for a potential listing and Skadden, Arps, Slate, Meagher & Flom LLP as legal advisor.
Bloomberg had first reported in February that the firm was exploring a merger with a special purpose acquisition company (SPAC) to raise cash.
Dire need of funds
ONE Championship is learnt to be in dire need of funds. DealStreetAsia understands that its chairman and CEO Chatri Sityodtong has made trips to the Middle East in recent months to raise funds from private investors.
The firm was already posting losses prior to the COVID-19 pandemic, which had forced it to pull the plug on several live shows across Asia. For the financial year 2019, ONE Championship’s net losses jumped 60% to S$131.4 million on-year. Its net cash flow, used in operating activities, fell by 74% to -S$136.6 million over the same period.
DealStreetAsia’s estimates earlier this year showed that ONE Championship will need to make some drastic cuts to stem its cash burn or risk eating too far into its dwindling funds. The firm has disclosed just a few major fundraising rounds since then.
In March 2019, ONE Championship disclosed a sale of S$10.4 million of convertible preference shares to TPG Capital founding partner David Bonderman. In 2020, S$99.1 million was raised from “new and existing investors” without details on how much of this comprised debt, how it was structured, or from whom.
DealStreetAsia had reported in June 2020 that ONE had issued S$35.43 million ($25.41 million) of convertible notes due 2025 to Dahlia Investments, an investment vehicle of Temasek. The new notes were part of the planned issuance of S$113.36 million ($81.30 million) of convertibles due 2025, according to filings by ONE.
In March this year, ONE Championship premiered “The Apprentice,” a reality television programme hosted by Sityodtong featuring global candidates competing in tough business and physical challenges to win a $250,000 job offer to work under Sityodtong for a year as his protege.
It is ONE Championship’s first foray into reality TV programming, featuring a list of star-studded guests including Grab co-founder Anthony Tan and Zoom founder and CEO Eric Yuan.
ONE Championship is backed by investors including Sequoia Capital and GIC Pte, besides Temasek, according to its website.
Besides chairman Sityodtong, ONE Championship’s board includes investor Saurabh Mittal, Sequoia Capital India’s Shailendra Singh, and former TPG Capital principal Hua Fung Teh, according to the company’s website.