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KUALA LUMPUR: Multimedia video conferencing system assembler MLABS Systems Bhd
has proposed to inject a new core business -- selling footwear and apparels -- which will also see the emergence of new controlling shareholder.
In a filing with Bursa Malaysia on Friday, it said it had signed a heads of agreement with Bage Holdings Ltd to acquire 100% equity interest in Bage (China) Co Ltd (Bage HK) for RM260mil to be satisfied with new MLabs shares.
Bage HK is an investment holding company whose sole operating subsidiary, QuanZhou Bage Sports and Leisure Goods Co Ltd, designs, markets and makes footwear, and designs and markets apparels and accessories, under its own brand name of Bage. QuanZhou Bage is also an original equipment manufacturer of local and international footwear brands.
To pay for the purchase, MLabs will issue new 5-sen MLabs shares at an issue price of 6.5 sen each.
“Based on the indicative purchase consideration, 4 billion new shares will be issued,” it said.
Based on the latest annual report, MLabs has a paid-up capital of 186.87 million shares. However, the company plans to undertake a capital reduction exercise, involving the cancellation of 5 sen from the par value of each 10-sen share, that may boost its issued and paid-up capital up to 264.08 million shares.
Bage Holdings and the persons acting in concert with it will seek a waiver from the Securities Commission from having to extend a mandatory general offer for all the remaining MLabs shares not already owned by it following the completion of the proposed acquisition.
On Thursday, MLabs was issued an unusual market query by Bursa Malaysia Securities following the sharp rise in price and high trading volume of its shares. In its reply, MLabs noted that it had had ongoing discussions with Bage Holdings since the first quarter of 2016 for the proposed acquisition of Bage HK.
MLabs shares slipped 1.5 sen to close at 10 sen on Friday, with 3.57 million shares traded.
