To be paid with new Goodway shares, the purchase will result in the vendor, NSA Technology Sdn Bhd, becoming its controlling shareholder.
In a filing with Bursa Malaysia, Goodway said it had inked a conditional agreement on Monday whereby it would pay NSA by issuing 1.8 billion new Goodway shares at 50 sen each. (Goodway shares closed at 45.5 sen on Friday, up sharply by 20 sen from the start of the month. The counter was suspended on Monday pending the announcement.)
S5 Systems, a Multimedia Super Corridor company with pioneer status, derives its income mainly from immigration security projects in Malaysia and overseas, such as India,the Philippines and Vietnam.
Under the corporate exercise, it was also proposed that the vendor undertake a restricted offer for sale of the rights to allotment of up to 165.776 million consideration shares to the entitled Goodway shareholders on the basis of three rights shares for every two shares held at an entitlement date to be determined.
After the proposed acquisition and proposed offer for sale, NSA Technology will end up with an 85.54% stake. Chief executive officer and group managing director Tai Boon Wee’s effective (direct and indirect) stake in Goodway will fall from 31.26% to 2.72% while the Armed Forces Fund Board’s (LTAT) direct interest in Goodway will shrink from 11.32% to 0.96%.
Goodway proposed that NSA and persons acting in concert with it be exempted from the obligation to undertake a mandatory take-over offer for all the remaining voting shares in Goodway not already owned by them after the proposed acquisition.
The vendor, it was announced, also plans to place the rights to allotment of up to 440 million consideration shares to investors to be identified via book building amounting to at least RM220mil.
Goodway, which is in the rubber compound and retreading service businesses, made group losses in the last two financial years ended Dec 31, 2015 and 2014.
“The injection of S5 Systems is a significant milestone to Goodway’s corporate history as a listed entity. This change in business direction will not only diversify our revenue stream but also position the company in better stead amidst the growing challenges of our manufacturing business against a difficult global business landscape,” Tai said in a joint press statement.
S5 Systems mainly provdes national security solutions under its own security technology intellectual property to its customers as well as the development and customisation of solutions and systems, consultancy and support in related information technology and security industries.
The vendor, NSA, guarantees that the audited profit after tax of the S5 Systems group (excluding any extraordinary or exceptional item) will not be less than RM55mil per year for the period from the completion date to Dec 31, 2017 (pro-rated accordingly), as well as for the calendar year ending Dec 31, 2018.
The directors of NSA Technology are Tan Sri Mohamed Al Amin Abdul Majid and Datuk Seri Johann Young. Mohamed Al Amin does not have any equity interest in NSA while the latter is deemed to have 100% equity interest.
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