Despite the equity investment plan, Reitar Logtech's stock price still declined

Investing.com – Reitar Logtech Holdings Limited (NASDAQ: RITR) stock price fell 9% on Tuesday after the company announced the signing of a non-binding memorandum of understanding (MOU) regarding a potential $60 million equity investment.

This Hong Kong-based smart logistics and automated warehousing company signed the MOU with Equator Capital Management SPC, acting on behalf of the Equator Private Equity Fund SP. The proposed investment involves subscribing to newly issued common shares at a price of $4.00 per share.

The company stated that the funds raised will be used to participate in a consortium to acquire a controlling stake in an international logistics company operating in Southeast Asia, Europe, and China. Reitar is working with a private equity firm focused on logistics technology that manages billions of dollars in assets.

According to the terms of the MOU, at least 92% of the investment proceeds will be used for the consortium acquisition, with up to 8% allocated for transaction fees and working capital. The proposed deal is subject to multiple conditions, including completion of due diligence, signing of a consortium agreement, regulatory approval, and the target company’s recent audited EBITDA of at least $8 million.

The company has granted Equator Capital a 90-day exclusivity period during which Reitar will not seek competing equity financing transactions. Aside from exclusivity, confidentiality, cost, and applicable legal terms, the MOU is non-binding.

The MOU will automatically terminate upon signing of final transaction documents, expiration of the 90-day exclusivity period, or mutual agreement of both parties. The company notes that there is no guarantee the proposed transaction will be completed as described or at all.

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