KUALA LUMPUR (Jan 6): Power cables manufacturer Plastrade Technology Bhd is acquiring the business of computer hardware trader EA Comtronix Sdn Bhd by cash and share issuance worth RM12 million, which will see the latter emerging as the new largest shareholder in Plastrade.

EA Comtronix's sole director and shareholder is Heng Kear Huat, who will end up controlling a 29.05% stake in Plastrade held via EA Comtronic, on conclusion of the proposed acquisition.

In a filing with Bursa Malaysia today, Plastrade said it has, together with its wholly-owned Artronix Sdn Bhd, inked a sale of business agreement with EA Comtronix for the proposed acquisition. The deal is to be satisfied via a combination of 76.3 million new Plastrade shares at 10.5 sen, and RM4 million cash.

The acquisition, which will enlarge Plastrade's share capital to 262.666 million from 186.4 million, will result in Plastrade's largest shareholder Pua Kong Hoi's 29.9% stake being diluted to 21.2%, while Fortune Biotech Supply Sdn Bhd's 11.7% will be trimmed to 8.3%.

Plastrade said its board believes the proposed acquisition represents an opportunity for the group to further expand its ICT segment and enhance its financial performance by broadening its geographical presence into new countries such as United Arab Emirates and Vietnam, and expand ICT products offering namely mobile phones, desktop computers and projectors with additional brands.

The proposed buy comes with a profit guarantee of RM3 million for the financial year ending Dec 31, 2020 (FY2020) and 2021 (FY2021). Plastrade expects the acquisition to be completed by the first half of 2020.

Shares of Plastrade were not traded today. They last settled at 12.5 sen, with a market capitalisation of RM23.30 million. The stock has declined near 22% in the past 12 months.