Mexter Technology to exit mobile services business

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KUALA LUMPUR (Sept 7): Mexter Technology Bhd is exiting the mobile services business due to the current challenging and increasingly saturated mobile services industry, as well as to stem further losses to the group.

In a filing with Bursa Malaysia today, Mexter said it has entered into a sale and purchase of shares agreement (SPA) with its head of mobile division Chan Wai Fong to dispose of its entire 80,000 shares, or an 80% stake, in its loss-making mobile messaging gateway solutions and services unit Mexcomm Sdn Bhd for RM187,727. MexComm has been registering net losses since 2012.

Chan, who is also director and chief operating officer of Mexcomm, is already holding a 20% stake in the company.

Mexter said the proposed disposal is in line with the group's strategic plan to focus on and expand its healthcare services segment.

It added that the disposal will also allow the group to channel its resources into the healthcare services business, which is expected to contribute positively to its profitability in the long term.

Under the SPA, Chan undertakes that MexComm will repay the RM2.09 million owing to the subsidiaries of Mexter.

"The board is not expecting any material financial or operational impact of the proposed disposal on the group," said Mexter.

However, the proposed disposal is expected to generate an estimated one-off gain of RM1.64 million to the group, after taking into account estimated expenses of RM100,000 in relation to the transaction, it added.

This represents a pro forma earnings per share of 0.58 sen, calculated based on the number of shares in issue in Mexter of 283.33 million shares as at Sept 6.

Mexter said the proceeds arising from the proposed disposal will be used for working capital and to defray expenses in relation to the proposed disposal.

Public Investment Bank Bhd has been appointed by Mexter to act as the adviser for the proposed disposal.

Barring any unforeseen circumstances, the proposed disposal is expected to be completed by the fourth quarter of 2018.

Mexter shares closed down half sen or 1.22% at 40.5 sen today, for a market capitalisation of RM114.75 million.