Vivocom International Holdings, a Malaysian construction and e-business software application developer, announced signing a $350-million investment deal from global alternative investment group Strattner Alternative Credit Fund.
In a filing with Bursa Malaysia, Vivocom said Strattner, which is a publicly-traded alternative investor with offices in the US, Europe, and Asia, has agreed to acquire not more than 9% of Vivocom’s shares amounting to 1.45 billion Malaysian ringgit or about $350 million.
As part of the investment deal, Vivocom will have the right to draw down capital as required and control the timing and amount of capital drawn down under the agreement.
Vivocom said this method of fundraising provides management with a flexible financing tool and allows Vivocom the ability to deploy cash on a need basis only as opportunities arise.
The investment will be carried out for a period of 18 months from the date of the signing of the agreement.
Both Vivocom and Strattner view the capital allocation as an investment into the Malaysian firm and a starting point for a long-term strategic partnership to advance Vivocom’s growth through M&A activities and fund its projects in construction, property development, and minerals trading.
“The timing is perfect as we seek to grow via the M&A route and acquire companies with game-changing and disruptive strategies in their businesses,” Seri Chia Kok Teong, CEO of Vivocom.
He added that proceeds raised from the investment deal will also be used as working capital for the recently-ventured sand and minerals trading business.
Vivocom, which was incorporated in 2002 as I-Power Technologies, commenced its business in the technology sector in 2002 but had since pivoted and diversified into other industries. It entered into the construction industry when it acquired Neata Aluminium (Malaysia) and Vivocom Enterprise.
Vivocom’s shares dropped 7.89% Thursday to end the trading day at 0.53 Malaysian ringgit each.
Strattner, on the other hand, has identified a rapidly growing demand for financial services in corporate debt, convertible bond, and alternative credit markets in South East Asia, according to the announcement.