KUALA LUMPUR: Managepay Systems Bhd (MPay) has proposed to undertake a private placement of up to 20% of the total number of its issued shares to raise funds to strengthen its financial technologies, including the development of systems for a licensed digital bank.
Loss-making MPay is a provider of end-to-end electronic payment solutions for banks and financial institutions, merchants and card issuers.
In a filing with Bursa Malaysia on July 30, MPay said the issue price of the private placement would be determined later, based on the volume weighted average market price of MPay shares for the five market days prior to the price-dixing date, with a discount of not more than 10%.
Based on an indicative issue price of RM0.1275 per placement share, the gross proceeds would amount to RM18.12mil.
Nearly half of the proceeds will be used for a financial technology platform, as well as developing and customising systems for a licensed digital bank.
Another 27.4% of the proceeds would be for point-of-sale terminal projects, and another 20.4% for vertical payment solutions which focuses on park-and-pay management systems and a health-tracking application.
MPay also stated that the private placement allowed the company to raise funds without incurring interest expenses, as compared to bank borrowings.
Post-private placement, group managing director and CEO Datuk Chew Chee Seng(pic) – who is the largest shareholder – would see his 25.36% stake dropping to 21.13%.
“This would dilute my own shareholding.
“As such, this is a very strategic move to bring onboard a strong partner to strengthen our technologies and financial position, ” Chew told StarBiz.
He said the company was in talks with a few strategic parties, and aims to complete the private placement within this year.
To recap, on July 27, MPay had announced that it was teaming up with Singapore-based Passion Venture Capital Pte Ltd (PVC) to apply for a licence to operate a digital bank in Malaysia.
MPay said its subsidiary, ManagePay Services Sdn Bhd, had entered into a joint venture (JV) with PVC to set up a company that would be applying for the digital bank from Bank Negara.
MPay will own a 51% stake in the JV company, while the remaining 49% will be held by PVC.
Under the agreement, MPay said PVC is required to deposit or raise funds of close to RM100mil for the JV company within three months from the date of agreement.
MPay’s shares closed two sen higher at 15.5 sen yesterday, with some 59.77 million shares being traded.