Nexgram ventures into property development in Fiji

by **Cals** Fri 26 Sep 2014, 08:34

Business & Markets 2014

Written by Wei Lynn Tang of theedgemalaysia.com

Thursday, 25 September 2014 22:20

KUALA LUMPUR (Sept 25): Nexgram Holdings Bhd, an end-to-end mobile application service provider, has purchased a 70% stake in a local company that would enable it to tap into property development, construction, as well as information technology-related facilities in Fiji.

In a filing with Bursa Malaysia today, Nexgram said its wholly-owned subsidiary, Nexgram Land Sdn Bhd, has entered into a share sale agreement with South Venture Holdings Ltd – a company incorporated in British Virgin Islands – to acquire 70% or 4.2 million shares in Top Symphony Sdn Bhd (TSSB) for RM24.8 million cash.

Nexgram said the proposed acquisition will open the door for it to participate in Fiji’s economic development and growth process, which is still currently in its early development stage.

“With the Design-Build Master Agreement (DBMA) entered by TSSB and Fiji Authority [dated May 11, 2012], it would give a new development opportunity to our group in exploring a foreign government led and promoted construction and mixed development project,” Nexgram said in a filing with Bursa Malaysia.

The Fiji Authority is the Housing Authority, a statutory body established under the Housing Act Fiji (Cap 627).

The DBMA was executed in respect of the mixed development project comprising commercial, industrial and residential units.

The project involves the construction and joint development of more than 6,000 residential units, commercial as well as other industrial components, with a total development tenure of more than 10 years.

“In addition, by diversifying into a new market for property development, the proposed acquisition also offers further opportunities for other relevant business segmental growth for the group, especially for IT related facilities cum services as well as CCTV surveillance business, into Fiji,” Nexgram cited.

The proposed acquisition is proposed to be financed by a combination of its internal funds and/or bank borrowings, the proportion which has not been determined yet.

Incorporated on Jan 8, 2008, TSSB’s principal activities are property development and building contractors. TSSB has an authorised and paid-up share capital of RM10 million and RM6 million respectively, and its directors include Wong Chung Sing and Datuk Dr. Sharifuddin Bin Abdul Wahab.

Financially, TSSB reported losses in its latest three financial years - FYE Dec 31, 2011 (FY11), FY12, FY13 – and has reported its only revenue of RM50,000 in FY11. It reported zero revenue in FY12 and FY13.

Losses after taxation rose from RM283,765 to RM426,252 from FY11-FY13.
Meanwhile, net assets, or shareholders’ funds, decreased from RM1.63 million to RM575,212 in the same period.

Nexgram said the proposed acquisition is not expected to have any significant impact on its earnings and net assets for the financial year ending April 30, 2015. It, however, anticipates the proposed acquisition will bring positive contribution to the group in the longer term.

Upon completion of the proposed acquisition, TSSB will become a subsidiary of Nexgram, while the remaining 30% will continue to be held by Synergy Windfall Sdn Bhd.

The proposed acquisition is expected to be completed in the third quarter of FY15.

Nexgram closed down 1 sen or 7.14% to 13 sen today, giving it a market capitalisation of RM244.81 million.