KUALA LUMPUR (Jan 20): Green Packet Bhd is selling its entire 100% stake in software development company Xendity Sdn Bhd to Innov8tif Holdings Sdn Bhd, for RM17.5 million in cash.

In a filing to Bursa Malaysia, the loss-making digital solutions company said its original cost of investment into Xendity was RM28.38 million in February 2021. 

The estimated gain on the disposal is at RM3.6 million, based on the carrying value of Xendity of RM13.9 million.  

Xendity is involved in research and development of software related to identity verification processes. Its sole director is Leong Seng Wui, who owns 8.91% stake in Green Packet and sits on the board as group executive director.  

Xendity is a loss-making unit that incurred a net loss (unaudited) of RM1.22 million for the 11-month period ended Nov 30, 2022, versus a net loss of RM2.35 million for the financial year ended Dec 31, 2022. 

Innov8tif, on the other hand, is wholly owned by Soh Peng Nam. 

Green Packet said the disposal is a timely opportunity to unlock and realise the value of investment and assets in Xendity, and the proceeds received could be used to fund the group’s existing core businesses, particularly fintech and communication businesses or future prospective businesses. 

“These shall improve the cash flow position of the group and reduce the group’s dependence on bank borrowings,” it said.

As at end-September last year, the group’s fixed deposits with licensed banks, cash and bank balances stood at RM45.19 million, down from RM65.7 million as at end-2021.

Green Packet said the disposal is expected to be completed in the second quarter of this year.

Shares of Green Packet closed unchanged at six sen, giving it a market capitalisation of RM119.26 million.