KUALA LUMPUR (Sept 5): Prestariang Bhd said it is investing up to A$5 million (RM16.97 million) cash in loss-making online learning platform developer and services provider OpenLearning Global Pte Ltd (OGPL) to further position itself as the premium cloud-service provider for the higher education market.

In a filing with the stock exchange today, Prestariang said its wholly-owned unit Prestariang Capital Sdn Bhd (PCSB) has entered into a subscription agreement with Singapore-based OGPL and its founder, Adam Maurice Brimo to subscribe to five million new “A” ordinary shares in OGPL at A$1 per share.

Meanwhile, PCSB will also subscribe to 3.07 million convertible preference shares (CPS) in OGPL for a sum of A$1. The total consideration, said Prestariang, will be satisfied via internally-generated fund.

Upon completion of the series “A” restructuring, OGPL will have issued and paid-up capital of A$10.19 million. It is also undertaking a Series “B” A$10 million fund-raising round, said Prestariang.

Post-subscription — to be done in two tranches — Prestariang said PCSB will own a 16.67% stake in OGPL “assuming there are no follow on Series B investors”.

As part of the agreement, PCSB’s stake in OGPL post-subscription will be reduced to 14.28% from 16.67% if OGPL can deliver A$9 million in profit after tax (PAT) in the 12-month period ending Dec 31, 2020 (FY20).

“However, reduction in profits for the 12 months ending December 31, 2020 could see Prestariang’s shareholding rise to 24.3%,” added the company.

Prestariang plans to tap into OGPL’s existing market with the subscription, and to work alongside OGPL to establish a beach-front to EduCloud, Prestariang’s own cloud-based higher education services platform.

OGPL owns open online courses platform www.openlearning.com. It also has revenue share agreements with 66 higher educational and vocational institutions involving 900,000 students across four countries, but is currently unprofitable. Prestariang said it anticipates to break even in 2018.

“It currently has a strong operating presence in Malaysia and has secured an agreement with the Ministry of Higher Education to set up and operate the National MOOC Platform for Public Universities,” it added.

Shares of Prestariang last closed 0.56% or 1 sen lower at RM1.77, giving it a market capitalisation of RM853.67 million.