RevAsia to complete 27.2% disposal in iCar Asia within a year

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KUALA LUMPUR: ACE-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 stake in automotive portal iCar Asia Ltd before 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 one year from today. 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 today, which had earlier given the management team the greenlight on the proposed disposal.

He added that the disposal will be done through open market, off-market or a combination of both, at a price to be determined later.

The rationale for the equity disposal was to mitigate any further share of losses to be incurred in Rev Asia’s books in its future financial years.

Since listing on 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, which saw it owning online automotive portals in Malaysia, Thailand and Indonesia, as well as publishing Malaysian EVO, a motoring magazine.

iCarAsia registered a net loss of A$1.76 million (RM5.02 million) and A$6.9 million in financial years ended Dec 31, 2012 (FY12) and FY13 respectively. In the six months to June 30, 2014 (1HFY14), iCar Asia’s net loss further widened to A$6.04 million.

Rev Asia has been recognising iCar Asia’s losses after tax of RM1.67 million, RM6.48 million and RM4.99 million in its book for FY12, FY13 and 1HFY14 respectively.

Besides mitigating loss recognition, Gan said Rev Asia also stands to gain from its investment in iCar Asia, given that the latter’s share price has rallied to A$1.51 in Aug 22, 2014, from A$0.61 a year ago.

“Assuming iCar Asia’s share price A$1.54, the disposal consideration will be A$80.85 million and Rev Asia stands to reap a potential net disposal gain of some RM210.23 million. Of that, 90% will be distributed to as cash dividends to the shareholders and the remaining 10% will be channeled towards the group’s working capital to fund the day-to-day business operations,” he added.