KUALA LUMPUR: ACE Market-listed media group Rev Asia Bhd, formerly known as Catcha Media Bhd, is targeting to complete the disposal of its 52.5 million shares or 27.2% equity interest in automotive portal iCar Asia Ltd by Oct 14 next year, said its chairman Datuk Larry Gan Nyap Liou.
“All our shareholders have given the mandate and flexibility to the board of directors to execute and complete the disposal within a year from today (yesterday). We have identified [a] few interested investors but we will announce new developments in due course,” Gan told reporters after the group’s extraordinary general meeting yesterday, which earlier gave the green light to proceed with the disposal.
He said the disposal will be done via open market, off-market or a combination of both, at a price to be determined later.
According to Gan, the rationale for the equity disposal is to mitigate any further losses to be incurred in Rev Asia’s books in its future financial years.
Since listing on the Australian Securities Exchange (ASX) in Sept 11, 2012, iCar Asia has been making losses due to expenses incurred in executing its growth and expansion plan, owning online automotive portals in Malaysia, Thailand and Indonesia, as well as publishing the Malaysian EVO, a motoring magazine.
iCar Asia has registered a net loss of A$1.76 million (RM5.03 million) and A$6.9 million in the financial years ended Dec 31, 2012 (FY12) and FY13 respectively. In the six months ended June 30, 2014 (1HFY14), iCar Asia’s net loss further widened to A$6.04 million.
Rev Asia has been recognising its share of iCar Asia’s losses of RM1.67 million, RM6.48 million and RM4.99 million in its book for FY12, FY13 and 1HFY14 respectively.
Besides mitigating the losses, Gan said Rev Asia stands to gain from its investment in iCar Asia, as the latter’s share price rallied to A$1.51 on Aug 22 from A$0.61 a year ago.
“Assuming iCar Asia’s share price at A$1.54, the disposal consideration will amount to A$80.85 million and Rev Asia stands to reap a potential net disposal gain of some RM210.23 million. Of the amount, 90% will be distributed as cash dividends to shareholders and the remaining 10% will be channelled to the group’s working capital to fund the day-to-day business operations,” he said.
On the transaction valuation, Gan said TA Securities Holdings Bhd — Rev Asia’s independent adviser — had rated the disposal as “fair, reasonable and not detrimental” to Rev Asia’s non-interested shareholders.
To recap, Rev Asia on Aug 24, 2012 entered into a restriction agreement as required by the ASX, in which iCar Asia shares held by Rev Asia are to be held under escrow and shall not be traded by Rev Asia for 24 months from the listing date. The escrow expired on Sept 11 this year.
The original cost of investment then totalled A$8.4 million or A$0.16 per iCar Asia share.
On its focus going forward, Gan said Rev Asia will retain its core business, which comprises online media, social media and publishing. Some of its magazines include Prestige, Juice and Stuff.
This article first appeared in The Edge Financial Daily, on October 16, 2014.