KUALA LUMPUR (May 30): Orion IXL Bhd is optimistic of turning its fortunes around by 2018, banking on the successful completion of its acquisition of ASAP Bhd, whose niche is in the computerised maintenance management system.

"The prospects look promising for Orion IXL," said its chief executive officer and co-founder Abdul Rani Achmed Abdullah. "We are hoping that ASAP, soon to be part of our organisation, will drive the business forward."

"We are targeting to turn the company around by FY18 (financial year ending Dec 31, 2018), which will also improve our cash-flow position," he told reporters after the company's extraordinary general meeting today.

Orion IXL, previously known as CWorks Systems Bhd, has been bleeding in the past three years (FY14 to FY16) amid a challenging operating environment.

As at end-FY16, the company's accumulated losses stood at RM8.6 million.

At the EGM today, Orion IXL's shareholders approved the acquisition of 100% share in ASAP for RM73 million, which was valued at a historical price-earnings ratio of 12.48 times, far below comparable peers listed on the bourse.

Orion IXL's proposal to buy ASAP comes with a guarantee of generating an annual after-tax profit of RM7.5 million for two consecutive years.

"Orion IXL will be requesting ASAP to pledge a security deposit of RM15 million to ensure compliance to the profit guarantee terms," said Abdul Rani.

To fund the acquisition, Orion IXL will be making a cash call in the form of a renounceable rights issue — sweetened with free detachable warrants — to raise gross proceeds of RM79 million.

The company also has funds totalling RM1.1 million, being the balance of the gross proceeds raised in the previous private placement exercise completed in July last year.

Asked if Orion IXL can start paying dividends to its shareholders beginning FY18, Abdul Rani said: "Can we not go into that depth yet? It is still too early to talk about dividend."

The last time Orion IXL paid dividend was in May 2006 — a 10% first and final tax exempt dividend — just a year after it was listed on Bursa Malaysia's then Mesdaq Market.

On whether Orion IXL has set a target to graduate from the ACE Market to the Main Market, Abdul Rani said: "Is there really a compelling reason to do so? Let's talk about turning around Orion IXL first."

Currently, ASAP's orderbook stands at RM11 million to RM12 million, enough to keep it busy for another one year, while Orion IXL's orderbook stands at some RM500,000.

"Altogether, ASAP is bidding for some RM20 million of information technology projects, with core focus in the areas of assets and facilities management system," said ASAP's CEO Mohamad Shaharul Mohamad Shariff, noting that ASAP's success rate was 60% to 70%.

Beginning the fourth quarter of 2017, Abdul Rani said Orion IXL together with ASAP will make its foray into Indonesia, with opportunities seen in the maintenance of assets within the transportation, properties and healthcare sectors.

"Orion IXL is also targeting to enter the Philippines by 2018 in view of good economic growth and prospects there," he added.