Datasonic acquires new unit for fuel subsidy job

by **Cals** Fri 27 Jun 2014, 00:26

Business & Markets 2014

Written by Wei Lynn Tang of theedgemalaysia.com

Thursday, 26 June 2014 10:00

KUALA LUMPUR: Datasonic Group Bhd is acquiring a 30% stake in Fuelsubs House Sdn Bhd, which it said will be awarded a contract by the government to manage the upcoming fuel subsidy system, for RM10 million.

Its wholly-owned unit Datasonic Technologies Sdn Bhd (DTSB) yesterday entered into an agreement with Fuelsubs shareholders HKS Primatrix Sdn Bhd (HKSP), Habibul Rahman Kadir Shah, Datuk Razali Merican Naina Merican, and Zaid Kadershah for the acquisition of the equity interests.

In a filing with Bursa Malaysia, Datasonic said the RM10 million was arrived at on a willing buyer, willing seller basis, after taking into consideration the future prospects and earnings potential of Fuelsubs upon the latter securing the letter of award from the government to manage the fuel subsidy system.

The agreement will become unconditional and the payment for the 30% stake made when Fuelsubs secures the letter of award from the government.

Fuelsubs has an authorised and paid-up share capital of RM400,000 and RM20,000 respectively. It is principally involved in the export and import of crude petroleum oil; and business management consultancy services.

HKSP currently owns 36.4% of Fuelsubs. Meanwhile, Fuelsubs directors Habibul Rahman, Razali Merican and Zaid each own 33.6%, 25% and 5% respectively in the company. Datasonic’s filing with Bursa did not reveal who the shareholders are in HKSP.

Upon the completion of the acquisition, DTSB will own a 30% stake in Fuelsubs while HKSP’s stake will be diluted to 26%, Habibul’s to 24%, Razali Merican’s to 16.5% and Zaid’s to 3.5%.

It is worth noting that out of the RM10 million consideration, the vendors will collectively pump back RM7 million into Fuelsubs.

“The proposed acquisition is in line with our market expansion strategy and represents a good opportunity for us to expand our businesses and to participate in the project to be undertaken by Fuelsubs,” Datasonic said in the filing yesterday.

DTSB has also entered into a shareholders agreement (SA) with Fuelsubs and the vendors to regulate the relationship between both parties as shareholders. The SA is subject to and conditional upon the completion of the proposed acquisition.

“The proposed acquisition might have material effect on the earnings per share and net assets per share of Datasonic group for the financial period ending March 31, 2015,” Datasonic said, noting that the impact of the proposed acquisition on its gearing will depend on the source of funding, which will be decided later.

Datasonic said it would fund the proposed acquisition via internally generated funds and/or bank borrowings.

This article first appeared in The Edge Financial Daily, on June 26, 2014.