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The merger of Origo Resource Partners plc and Origo Sino-India plc (the "Company") is considered a reverse take-over under AIM Rule 14.
Investing policy
The Company invests predominately in privately held companies across various sectors of
China's economy, and in companies and assets with connections to the Chinese market, with the Company's objective being to provide shareholders with above market returns, primarily through capital appreciation.
In terms of stage, the Company generally pursues three kinds of opportunities:
• investments in pre-IPO opportunities, where the Company can add value through providing assistance in relation to restructuring, international expansion and the listing on a domestic or foreign stock exchange;
• profitable, expansion stage companies requiring financing to meet working capital requirements, expansion capital and/or as capital to finance merger and acquisition opportunities; and
• selected earlier-stage companies, which demonstrate compelling prospects for fast-growth and paths to profitability.
At its present level of capitalisation, the Company is unlikely to commit in excess of $20 million to any single investee company at the time of investment. For early-stage opportunities, initial commitments may be less than $1 million. While the Company does not have any set gearing policy (although it does not expect to be highly geared at an enlarged group level) investee companies, directly or indirectly, may themselves have outstanding borrowings. The Company currently carries out its own commercial due diligence in respect of potential investments (and engages professional advisers for specialised tasks such as legal, financial and technical due diligence) but may outsource this process over time.
In addition to investing predominately in privately held companies, the Company may, in its absolute discretion, hold or invest in publicly traded shares, quasi-equity and/or debt instruments, including convertible or non-convertible debt securities coupled with warrants and/or options, which may or may not represent shareholding or management control. The Company plans to allocate no more than 20 per cent. of available cash resources to investment in publicly traded equities.
The Company seeks to be an active investor and to make minority investments. To the extent possible, minority investments are structured so as to ensure adequate minority protection rights, including but not limited to board participation (via a board director/observer), membership of supervisory, audit and oversight committees, as well as specific veto rights over key corporate decisions. In addition, the Company generally dedicates at least one other nominee who, together with the board director/observer, is responsible for assisting the investee company on matters such as building and augmenting the management team, implementing relevant corporate governance and financial control procedures, defining and executing a growth and financing strategy, introducing suitable partners and business opportunities and matters related to future fund-raisings, acquisitions or exit considerations.
The holding period for investments is expected to vary depending on the type of investment, the particular circumstances of the relevant investee company, and the intended exit route. The holding period for pre-IPO and expansion stage investments is targeted at between 9 and 24 months and for earlier stage investments at between 24 and 48 months. There is currently a limited spread of investments but this may change if the Company raises additional debt or equity capital.
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