This article first appeared in The Edge Financial Daily, on October 28, 2015.
Inix Technologies Holdings Bhd (-ve)
Loss-making Inix (Fundamental: 1.65/3 Valuation: 0/3), an IT solutions provider, triggered our momentum algorithm yesterday, as its renounceable rights started trading on Bursa. Since going ‘ex-rights’ last Thursday, the stock has surged 2.5 sen or 21.7% to close at 14 sen.
To recap, Inix is undertaking a 2-for-1 renounceable rights issue at an issue price of 10 sen per rights share. Subscribing investors will also receive 3 free warrants for every 4 rights. The fund raising exercise is expected to raise up to RM27.8 million. Of this amount, RM7.2 million has been earmarked for the acquisition of a 30% equity interest in Galactic Maritime (Malaysia) Sdn Bhd, and RM5.5 million to buy a new vessel.
Galactic is primarily a dredging and land reclamation services provider. The move will see Inix diversifying into a non-IT related field. The acquisition comes with a total net profit guarantee of at least RM7 million from April 2014 to July 2016.