KUALA LUMPUR (Feb 7): ACE Market-listed education and human resource provider SMRT Holdings Bhd has proposed to acquire 1.8 million shares or the remaining 36% stake not already owned by the group in N'osairis Technology Solutions Sdn Bhd (NTS) from Permata Kirana Sdn Bhd for RM72 million cash.
This is part of the group's strategy to streamline its operations and purely focus on its technology business, said SMRT.
SMRT's filing with Bursa Malaysia on Tuesday (Feb 7) showed that NTS, an information technology (IT) managed service provider, is currently a 64%-owned subsidiary of SMRT. NTS is a profitable company, posting a net profit of RM20.11 million on revenue of RM51.1 million for the financial year ended Dec 31, 2021.
As part of its plan to become a pure play IT solutions company, SMRT said it is also proposing to dispose of its entire stake in SMR Education Sdn Bhd to Special Flagship Holdings Sdn Bhd (SFHSB) for RM49.46 million cash, allowing the group to exit its education business that has not been a strong contributor to the group's financials.
SMR Education is principally involved in investment holdings where it currently holds 42.08% of Minda Global Bhd (MGB). As such, post proposed disposal, SMRT will cease to hold 100% equity interest in SMR Education and 42.08% in MGB.
SMRT said it will fund the RM72 million deal via a combination of funds raised from the proposed disposal, internal funds and/or bank borrowings.
It added that the two proposed deals are deemed related party transactions (RPTs) as Tan Sri Palan Ramanathan Chettiar and his spouse Puan Sri Kamatchi Valliammai Malayandi are major shareholders of SMRT. Their son Maha Ramanathan Palan, who is the group managing director of SMRT, is also a shareholder of NTS and Permata Kirana. SFHSB is jointly owned by Palan (with a controlling equity interest of 99.99%), while the remaining 0.01% equity interest is held by Kamatchi.
Quantephi Sdn Bhd has been appointed as independent adviser to advise the non-interested directors and non-interested shareholders of SMRT.
Barring any unforeseen circumstances, the two proposed deals are expected to be completed by the second quarter of 2023. UOB Kay Hian Securities (M) Sdn Bhd has been appointed by the company to act as the principal adviser for the proposals.
SMRT shares closed up 0.5 sen or 2.78% at 18 sen on Tuesday, translating into a market capitalisation of RM82.79 million.