PETALING JAYA: ACE Market-listed information technology company Sterling Progress Bhd was one of the most actively traded counters of the day, with shares closing 58.33% or 7 sen higher to 19 sen on the back of a potential new business stream and shareholder entering the company, said sources.
This was made more evident when a block of 10 million shares in Sterling Progress Bhd, (the company formerly known as 1 Utopia Bhd) was crossed yesterday at a price of 20 sen, representing a 4% stake in the company. The price represented a 5.26% premium to the stock’s closing of 19 sen.
The buyers of the block, believed to be new strategic shareholders, could be looking to turn the company around with a new business venture, said sources close to the deal.
The source added that in recent times, investors have been looking to ACE Market companies due to there being no requirement on revenue and profits.
“Furthermore, the business sectors for ACE Market companies are no longer confined just to technology and high growth sectors. This makes the ACE listing status very attractive.”.
Size wise, Sterling Progress would appear like a reasonable candidate. The company has a market capitalisation of RM47mil despite the run up in its share price yesterday.
While it has long term borrowings of some RM7.7mil and short-term borrowings of RM545,000, it also has cash of RM6.08mil as of Sept 30.
Sterling Progress has been loss making over the past few years. For the second quarter to Sept 30, 2016, it recorded a loss of RM4.03mil on the back of revenue of RM27.87mil. For the six-month period, it continues to be in the red with losses of RM6.8mil.
Sterling Progress has businesses in retailing consumer telecommunications and IT electronics products.
The company last September proposed to undertake a reduction of the issued and paid-up share capital via the cancellation of 7.5 sen of the par value of every existing ordinary share of 10 sen each to 2.5 sen.
This will then be followed by a proposed share consolidation of every four ordinary shares of 2.5 sen each into one new ordinary share of 10 sen each after the proposed par value reduction.
The exercise will eliminate the company’s existing accumulated losses by setting off against the credit arising from the cancellation of share capital.
In addition, Sterling Progress shares have been trading below its existing par value of 10 sen for more than one year.
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