Thursday 28 Mar 2024
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KUALA LUMPUR (March 11): AT Systematization Bhd, which ventured into rubber glove manufacturing last year, has made a conditional voluntary takeover offer (VGO) to loss-making Asdion Group Bhd at 50 sen per share.

The offer price is on par with Asdion's closing price today.

The VGO is not a privatisation exercise. Asdion, which is involved in logistics business as well as software development and ICT-related activities, will remain listed on ACE Market of Bursa Malaysia upon completion of the takeover offer, said AT Systematization in a filing with the exchange today.

According to the filing, the VGO is conditional upon AT Systematization being able to garner more than 50% of the voting shares in Asdion. This means should the acceptance of the offer be below 50%, the offer would be lapsed.

The takeover offer comes slightly more than a month after Asdion's external auditor issued an unmodified audit opinion with a material uncertainty related to the company's ability to operate as a going concern.

"The ability of the company to operate as a going concern is dependent on the successful outcome and implementation of the current business plans including the progressive uplifting of restriction on travelling, to generate sufficient cash in the future to fulfil their obligations as and when they fall due," said the auditor.

Asdion posted a net loss of RM4.68 million for its financial year ended Sept 30, 2020 (FY20), underpinned by the slow pace in the business activities in logistics, stevedoring & trucking segment amid Covid-19 pandemic while its annual revenue was merely RM3.79 million.

Notably, there is no comparison with the previous corresponding year due to the change in financial year end from Dec 31 to July 31, effective July 2019.

Nonetheless, AT Systematization noted in the latest filing that the additional income stream from Asdion will help reduce its reliance on existing businesses.

"The group also believes that the logistics business has growth potential particularly in view that the demand in the logistics sector is expected to remain strong, supported by, amongst others, the increased e-commerce activities amidst Covid-19 pandemic as well as improved logistics infrastructure, with increased route networks and connectivity across Malaysia," said the filing.

AT Systematization explained that the cash offer price of 50 sen per share was arrived at after taking into consideration, amongst others, the historical market price performance of the Asdion shares.

"The offer price is in compliance with Paragraph 6.03(2) of the Rules, which states that the offer price in a voluntary takeover offer must not be less than the highest price (excluding stamp duty and commission) paid or agreed to be paid by the offeror or persons acting in concert for any voting shares or voting rights to which the takeover offer relates, during the offer period and within three months prior to the beginning of the offer period," it said.

AT Systematization's balance sheet as at Sept 30 showed that the company's cash balance stood at RM4.85 million, and other investments at RM15.07 million.

Asdion's market capitalisation is at RM63.9 million based on the closing price of 50 sen. The VGO would cost more than RM32 million should the offer turn unconditional with higher than 50% acceptance.

Its principal adviser Mercury Securities Sdn Bhd is satisfied and confirmed that AT Systematization has sufficient financial resources to pay for the full acceptance of the VGO.

Shares of AT Systematization finished unchanged at 11.5 sen, giving it a market capitalisation of RM486 million.

Edited ByKathy Fong
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