KUALA LUMPUR: Automated test equipment manufacturer VisDynamics Holdings Bhd is now in formal discussions with the ultimate controlling shareholders of Indonesia-based private limited IT solutions company PT Cipta Srigati Lestari (CSL) for a reverse takeover (RTO).

In a filing with Bursa Malaysia yesterday, VisDynamics said it had entered into a heads of agreement (HoA) with the ultimate controlling shareholders of CSL for the proposed RTO and a proposed management buyout (MBO) in VisDynamics.

Pursuant to the HoA, VisDynamics said it is negotiating the terms and conditions of the proposals with CSL to finalise and enter into the relevant definitive agreements within 60 days from the date of the HoA.

Under the proposed RTO, VisDynamics (fundamental: 2.5; valuation: 0) or a special-purpose vehicle will acquire the entire issued and paid-up capital of CSL for a purchase consideration to be determined later, subject to a satisfactory valuation by an independent valuer.

VisDynamics said the RTO will be financed via the issuance of new VisDynamics shares at 28 sen each. The ultimate controlling shareholders of CSL are Steven Chandra, Roy Anthony Irawan, Fredyanto Kurniadi and Nathan Tirtana.

CSL is principally involved in the provision of IT solutions in the smartcard manufacturing industry.

Meanwhile, under the proposed MBO, VisDynamics said the exercise would be led by its executive director and chief executive officer Choy Ngee Hoe for all the equity interest in the existing VisDynamics’ group of companies for a cash consideration to be determined later.

According to VisDynamics’ latest annual report, Choy, who held 30.32% of VisDynamics as at Jan 20, is one of the founders of VisDynamics Research Sdn Bhd — a subsidiary of the company.

The proposals are subject to due diligence exercise and all relevant regulatory approvals being granted or obtained, and that of VisDynamics’ shareholders.

VisDynamics added that the proposals may result in a significant change in the group’s business direction or policy.

“A detailed announcement on the proposals will be made upon the execution of the sale and purchase agreements for the sale and purchase of shares in VisDynamics and CSL,” it said.

VisDynamics shares closed down 2.5 sen at 36 sen yesterday, giving it  a market capitalisation of RM36.25 million.

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This article first appeared in The Edge Financial Daily, on April 29, 2015.