KUALA LUMPUR (Aug 23): REDtone Digital Bhd (KL:REDTONE) has emerged as a substantial shareholder in HeiTech Padu Bhd (KL:HTPADU) after acquiring a 6.38% equity stake comprising 7.1 million shares in the open market for RM15.35 million.

In a filing with Bursa Malaysia on Friday, REDtone said it purchased the 6.38% stake in HeiTech Padu at an average price of RM2.16 per share between June 27 and Aug 23, 2024.

The integrated telecommunications and digital infrastructure service provider noted that the acquisitions were funded entirely through internal funds and did not impose any additional liabilities on the group.

"The acquisitions represent an opportunity for the REDtone Group to invest in similar or related technology companies," the company said.

Currently, REDtone is 47.46%-owned by Berjaya Corp Bhd and 17.34%-owned by King of Malaysia Sultan Ibrahim Sultan Iskandar of Johor.

HeiTech Padu is principally engaged in providing system integration, network-related services, data centre management, disaster recovery services, and other information technology-related services primarily in Malaysia.

For the first financial quarter ended March 31, 2024 (1QFY2024), HeiTech Padu posted a net profit of RM132,000 compared with a net loss of RM3.26 million in the corresponding quarter last year. 

The improved performance was attributed to better earnings from its technology market and niche market group segments. However, quarterly revenue declined to RM61.63 million from RM71.55 million in 1QFY2023.

On Friday, shares in HeiTech Padu gained nine sen or 4.09% to close at RM2.29, valuing the company at RM254.99 million. Meanwhile, REDtone shares fell two sen or 1.94% to RM1.01, giving it a market capitalisation of RM780.68 million.