THE Minority Shareholders Watch Group (MSWG) is probing Green Packet Bhd at its forthcoming extraordinary general meeting (EGM) over its proposed US$10 mil acquisition of Xendity Pte Ltd even as the latter possesses no historical profit track record.
Among others, the shareholder activism group wishes to know what are the key areas that the Xendity group intends to invest in with the upfront acquisition fee of US$4.5 mil or 45% of the purchase consideration (to be settled via cash and consideration share).
“Please update on the latest status of Xendity’s sales, ie how many new customers/subscribers/channel partners have signed up for the prepaid e-KYC (electronic know your customer) packages and/or purchase of e-KYC services on the self-service portal,” requested MSWG.
Green Packet is seeking shareholders’ approval at its EGM to issue new ordinary shares for the proposed acquisition of the entire equity interest in Xendity.
The balance of US$5.5 mil (55%) will be tied to gross revenue targets over the next two financial periods, according to Green Packet.
Moreover, Green Packet has also agreed to commit a sum of US$1.5 mil in cash or equivalent resources to execute the business plan to achieve the gross revenue targets.
As per Green Packet’s circular, Xendity group recorded a net loss of US$140,097 for the 11-month financial period ended May 31, 2020. As such, the valuation of Xendity was based on the financial projections of the Xendity group from June 1, 2020 to June 30, 2024 as prepared by its management.
The acquisition is to enable Green Packet to diversify into cloud computing business whereby e-KYC services will be an important component of its cloud computing product offerings.
Elsewhere, MSWG is enquiring from BSL Corporation Bhd at the latter’s AGM the latest update on the bills of demand amounting to RM10.9 mil that was issued by the Finance Ministry (MOF) to Crestronics (M) Sdn Bhd, a wholly-owned subsidiary of BSL.
According to BSL’s solicitor, Crestronics has arguable grounds and basis to contend that there is no legal and factual basis for MOF to reject CMSB’s remission application.
“What are CMSB’s arguable grounds and basis to contend that there is no legal and factual basis for MOF to reject CMSB’s remission application?” asked MSWG.
In the event that its appeal is not successful, CMSB is liable for the remaining balance of the RM10.9 mil claim. – Jan 30, 2021
