This article first appeared in The Edge Malaysia Weekly on August 21, 2023 - August 27, 2023
About two months after Hextar Technologies Solutions Bhd (HexTech) announced a land disposal to SWS Capital Bhd for RM23.66 million, both parties have mutually agreed to terminate the deal last week.
The cause for the cancellation was SWS Capital’s failure to obtain financing to acquire the two parcels of land measuring a total of 235,213 sq ft, located in Pasir Gudang, Johor and Klang, Selangor.
With the termination, SWS Capital, which is involved in the furniture and plastic ware business, also scrapped a proposed rights issue as it is no longer required to raise a minimum of RM180 million to finance the acquisition and proposed joint development.
The deal has drawn market attention due to chemical businessman Datuk Eddie Ong Choo Meng being the common shareholder of the two companies. He owns a 54.77% stake in HexTech via Hextar Tech Sdn Bhd, as well as a 13.07% stake in SWS Capital.
He is no stranger to the investing community, given his interests in various local listed firms.
HexTech had said that it planned to exit the warehousing business upon completion of the land disposals. It is also selling some land parcels to Hextar Holdings Sdn Bhd — which is also linked to Ong.
Most of the sales proceeds had been earmarked for the expansion of HexTech’s technology businesses and working capital.
Since the announcement of the deal between HexTech and SWS Capital last June, there has been some buying interest in both companies. Even now, their share prices are still sustaining at high levels following gains of more than 600% for HexTech and 20% for SWS Capital in the past one year.
Note that HexTech’s share price rose sharply late last year to above RM20, prompting Bursa Malaysia to warn investors to exercise caution on its trading. Will its ICT business become a major force to maintain investor interest in the company?
Perhaps, all eyes will also be on the next corporate exercise involving companies linked to Ong.
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