R & A Telecommunication given more time to submit plan

KUALA LUMPUR: R & A Telecommunication Group Bhd has secured a reprieve from Bursa Malaysia Securities from a delisting. This comes after it inked a memorandum of understanding earlier this month for the proposed acquisition of construction firm Synergy Goldtree Sdn Bhd as part of its regularisation plan.

The telecommunication industry player said in a statement that the regulator, which last month rejected its application for a further time extension to submit a regularisation plan, had considered its appeal and gave a further extension up to Dec 31, 2016.

In its Oct 13 announcement, R & A said Synergy Goldtree had bagged construction contracts with a total value of about RM839mil as at July 31, of which RM784mil was yet to be billed.

As part of the proposed acquisition, the vendors are expected to guarantee a profit after tax of at least RM17.5mil per financial year to be achieved by Synergy Goldtree for two successive full financial years on the completion of proposed regularisation scheme.

R & A said the purchase consideration would to be determined following the legal and financial due diligence carried out on the target company. The sum will be settled entirely with the new ordinary shares to be issued by R & A.

R & A, which provides turnkey design and engineering solutions for teleconmmunication networks, has posted annual losses since the 2012 financial year.

The company, which is 6.83% owned by information technology-based Nexgram Holdings Bhd, triggered the initial Guidance Note 3 (GN3) criteria after the auditors expressed a disclaimer opinion on its audited financial statements for the year ended Dec 31, 2014.

In August last year, R&A announced that its major unit R&A Telecommunication Sdn Bhd had defaulted in its repayment of financing facilities, with just over RM30mil being due and owing. The insolvency triggered yet another GN3 criteria.