2 days ago
- Business
- New Straits Times
Microlink may emerge as substantial shareholder in Omesti via debt deal
KUALA LUMPUR: Microlink Solutions Bhd has entered into a settlement agreement with Omesti Bhd to partially settle RM8.5 million in debt owed by the latter through new shares, a move that could see Microlink emerge as a substantial shareholder in the technology group.
The deal covers part of a total RM30.03 million outstanding owed by Omesti to Microlink for services rendered, the group said in a filing with Bursa Malaysia today. It is expected to be completed by the third quarter.
Under the agreement, Omesti will issue up to 85 million new shares to Microlink at a minimum price of 10 sen per share, translating into an indicative 13.6 per cent equity stake in Omesti upon completion.
Microlink said the proposed settlement was a pragmatic move to reduce receivables and mitigate default risk.
"The board, save for Tan Wee Hoong who has abstained from deliberating and voting, after having considered all aspects of the proposal, is of the opinion that it is in the best interest of the company," it said.
The group's audit and risk management committee agreed, describing the transaction as "fair, reasonable and on normal commercial terms" and "not detrimental to the interest of the minority shareholders."
The settlement is conditional on approvals from Omesti's shareholders, Bursa Malaysia, and other relevant authorities. If the conditions are not met within 90 days, Microlink may terminate the deal and seek full repayment.
In the event of default, Microlink said it also reserves the right to pursue legal action and seek full indemnification of recovery costs.
The group does not expect any material impact on its share capital, gearing or earnings per share, as the transaction is non-cash in nature. It also said the settlement will not trigger a mandatory takeover offer.
Microlink and Omesti are related parties. Omesti indirectly owns a 25.8 per cent stake in Microlink via its subsidiary, Omesti Holdings Bhd. Microlink director Tan Wee Hoong also sits on Omesti's board.
