KUALA LUMPUR (Aug 6): Hextar Technologies Solutions Bhd (KL:HEXTECH) plans to sell five industrial parcels of land, measuring an aggregate 56,231 sq m (13.89 acres) in Nilai to its major shareholder Datuk Eddie Ong Choo Meng and his father Datuk Ong Soon Ho for RM38.14 million cash to invest in its technology business and repay borrowings.
Hextar Technologies has entered a conditional share sale agreement to sell wholly-owned Guper Bonded Warehouse Sdn Bhd, the unit that owns the five parcels, to Choo Meng and Soon Ho’s Hextar Holdings Sdn Bhd, according to a bourse filing on Thursday.
The deal’s total cash proceeds of RM38.14 million comprises a RM2.77 million disposal consideration for Guper Bonded Warehouse shares, RM35.05 million in redemption of redeemable convertible preference shares (RCPS) payable to Hextar Technologies and RM318,000 for advances owed to Hextar Technologies.
The five parcels were ascribed a market value of RM38.5 million by independent valuer Laurelcap Sdn Bhd. Hextar Technologies noted the disposal took into consideration the adjusted net tangible assets of Guper Bonded Warehouse of RM2.77 million at end-June.
Hextar Technologies said it expects a pro forma gain of RM31.59 million from the disposal.
“The proposed disposal is in line with the group’s strategy to unlock the value of its investment in Guper Bonded Warehouse and realise the underlying value of the properties,” Hextar Technologies said.
Of the proceeds, the group said RM20 million (52.44% of proceeds) will be invested in its technology business, RM16 million (41.96%) to repay bank borrowings and RM1.62 million (4.26%) for general working capital. The remainder will be for the deal’s estimated expenses.
On its technology business investment, the group cited software and brand development expenses for its financial application MoneyX and AI-powered networking platform Net7.
The deal is deemed a related-party transaction as Choo Meng is group CEO of Hextar Technologies and a major shareholder with a direct stake of 5.53% and an indirect stake of 54.28% via vehicles Hextar Tech Sdn Bhd and Hextar Holdings. Soon Ho is a major shareholder of Hextar Holdings and Choo Meng’s father.
It is subject to approval from non-interested shareholders at an extraordinary general meeting to be convened.
Shares of Hextar Technologies ended four sen or 3.45% lower at RM1.12 on Thursday, valuing the group at RM2.31 billion.
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