PETALING JAYA: ICT-based Nexgram Holdings Bhd has launched a conditional takeover offer for Ire-Tex Corp Bhd that will see it venture into the manufacturing and industrial automation businesses.
Nexgram has proposed to undertake a takeover offer to acquire all the ordinary shares of 40 sen each in Ire-Tex and all its outstanding Ire-Tex warrants and irredeemable convertible unsecured loan stocks (ICULS) via an equity swap based on the offer prices of 40 sen per offer share 1 sen per offer warrant and 5 sen per offer ICULS.
The offer prices will be satisfied through the issuance of new ordinary shares in Nexgram with par value of 10 sen each, whereby each holder of the offer securities who accepts the offer will receive four consideration shares for every one offer share surrendered, one consideration share for every 10 offer warrants surrendered, and one consideration share for every two offer ICULS surrendered.
“If the offer is successful, depending on the eventual level of valid acceptances to be received by the company, the proposed offer may result in the diversion of 25% or more of the net assets (NA) of the Nexgram group to operations which differs widely from its current operations; and/or contribution from such operations of 25% or more of the net profits of the Nexgram group,” it said.
Nexgram expects the manufacturing and industrial automation businesses of Ire-Tex to be significant relative to the future earnings and/or NA of the enlarged Nexgram group.
Nexgram CEO and major shareholder Datuk Tey Por Yee is the only person acting in concert with Nexgram, in which he holds a 14.89% direct interest and an 8.51% indirect stake.
Nexgram will be seeking the approval of its shareholders for the proposed diversification at an EGM to be convened.
“Notwithstanding the proposed diversification, the Nexgram board intends to continue with the group’s existing businesses in the same manner,” it said.
Ire-Tex is principally involved in manufacturing, automation, trading and investment holding.
The Nexgram group was founded as an ICT-based company, and has ventured into other sectors, including property development.
“The offer represents a continuation of this initiative by tapping into the manufacturing and industrial segments to expand its earnings base from another stream of income through the existing businesses of Ire-Tex,” said Nexgram.
The proposals would provide a new source of recurring income to the enlarged Nexgram group as well as diversify the earnings base of the existing Nexgram group which is currently derived from ICT business and property-based business.
The Nexgram board has considered the recent financial performance of the Ire-Tex group for the financial year ended Dec 31, 2014 and the six-month financial period ended June 30, 2015, and is of the view that the Nexgram group will be able to undertake various measures in order to return the Ire-Tex group to profitability.