Consumer-focused microcap HWH International has agreed to acquire a company controlled by its own majority shareholder for $1, putting the Nasdaq-listed company in line to inherit a 51% interest in a planned Nigerian gas project along with at least $1.17 million in initial funding obligations.
Under a stock purchase agreement, HWH will acquire British Virgin Islands-based Hearty Nova Limited from Smart Dynamics Technology Limited. Hearty Nova’s sole material asset is a 51% stake in China Gas Africa Clean Energy Investment Holdings Limited, a Hong Kong joint venture, while China Gas Holdings owns the remaining 49%.
The $1 acquisition price does not represent the cost of the underlying project. HWH agreed that after closing, it will fund Hearty Nova’s roughly $1.17 million share of the JV’s $2.30 million registered capital and its proportionate share of additional capital calls connected to the Nigeria development. Smart Dynamics will have no further obligation to fund Hearty Nova, the JV, or the Nigerian project after closing.
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The JV plans to build a natural gas processing facility in Port Harcourt, Rivers State. HWH’s agreement estimates total investment at approximately $12 million, with construction expected to take eight to 10 months and operations planned for 15 years. The facility is intended to process as much as 5 million standard cubic feet of natural gas per day into LNG, condensate, and other products.
The parties expect the portion of project costs above the JV’s registered capital to be financed entirely through bank borrowing.
HWH itself classifies the deal as a related-party transaction. Executive Chairman Liu Ming Hui owns Smart Dynamics, the seller, and also serves as chairman of China Gas Holdings, HWH’s future JV partner. HWH CEO Liu Ming Xing, Liu’s brother, is an executive director of China Gas while HWH director Liu Chang is Liu Ming Hui’s daughter and also serves as an executive director of China Gas.
The connections follow a recent change in control at HWH. Smart Dynamics invested $10 million in August for 20 million HWH shares and warrants covering another 160 million shares at $0.63 each. An SEC ownership filing subsequently reported Liu Ming Hui and Smart Dynamics as beneficial owners of 94.8% of the company on a warrant-inclusive basis.
The capital injection came shortly after HWH had fallen below Nasdaq’s $2.5 million minimum stockholders’ equity requirement. Nasdaq later found the company back in compliance, although continued compliance remains subject to monitoring.
HWH is simultaneously preparing to rename itself EnerSyn Global Inc., saying the new identity will reflect an expansion into oil and gas, natural gas processing, coal-based energy, strategic minerals, and other energy businesses.
