CURRENTLY trading near its 52-week low of 20.5 sen, Green Packet Bhd can take solace in its latest proposal to dispose of its G3 Global Bhd’s shares as part of the group’s strategic asset monetisation to facilitate investment in ventures for longer term growth.
Recall that after the launch of its KippleLive proptech (property technology) application, Green Packet’s share price spiraled to a high of RM1.65 in May 2020, but has since then languished 87% to close a mere 21 sen last Friday (Aug 13).
The above share disposal decision – reached during the company’s extraordinary general meeting last Friday (Aug 13) – was one of the four proposals to strengthen Green Packet’s core business pillars.
“The estimated gain on disposal from the G3 shares of between RM18.9 mil and RM52.2 mil is expected to be used, in part, as seed capital for the Investment segment’s Kiple Kendall Fund and X Bamboo Fund targeted at both late-stage and start-up businesses,” noted the technology solutions company.
In a Bursa Malaysia filing on July 5, Green Packet said it has proposed to sell its stake in G3 Global to its managing director and CEO Puan Chan Cheong for between RM61.26 mil and RM91.89 mil cash.
The sale exercise entails up to 612.57 million shares or a 24.81% stake in G3 Global (after exercising warrants into shares) at between 10 sen and 15 sen per share.
For the record, Green Packet returned to the black for its 1Q FY2021 ended March 31, 2021 with a net profit of RM18.84 mil (1Q FY2020: -RM35.3 mil) although its revenue declined slightly to RM142.71 mil (1Q FY2020: -RM147.05 mil).
For FY2020, Green Packet saw its net loss widened to RM73.1 mil from RM45.97 mil in the previous year. This is despite a 1.7% growth in full-year revenue to RM618.54 mil from RM608.18 mil in the previous corresponding period.
Elsewhere, Green Packet shareholders also approved proposals for the group’s diversification into investment and moneylending business segments as part of the move to expand its revenue streams and earning bases while reducing dependency on existing businesses.
This is aligned to the company’s plan to improve future earnings as part of its Green Packet 5.0 growth trajectory.
“The moneylending business which supports the group’s strategic expansion into diverse revenue streams will look at filling the gaps created by longer processing periods and stricter lending requirements imposed by conventional financial institutions and the demand for financing from underserved individuals and businesses, particularly in view of recent economic challenges,” commented Puan.
This business is to be undertaken by Packet Interactive Sdn Bhd, a wholly owned subsidiary of the group that holds a moneylending licence awarded by the Housing and Local Government Ministry and the group’s Islamic Digital Bank subject to successful license issuance.
Founded in the heart of California’s Silicon Valley in 2000, Green Packet was subsequently listed on Bursa Malaysia in 2005. In 2007, the company emerged as the first tech unicorn in Malaysia with a market capitalisation of US$1 bil. – Aug 15, 2021
