MPay to form newco for PJBC deal

PETALING JAYA: Managepay Systems Bhd (MPay) will incorporate a new company (newco) to undertake the corporate exercise involving NVBA Petaling Jaya BC Sdn Bhd (PJBC) after the shares sale agreement (SSA) for the acquisition of shares in PJBC fell through.
In March 2017, MPay had proposed to acquire a 24% stake or 120,000 shares in PJBC for RM155,000 cash. MPay then subscribed for 450,000 shares in PJBC at a cash consideration of RM450,000. After the completion of the exercise, PJBC was to have become a 60% subsidiary of MPay.
The principal activities of PJBC are sports facilities management, badminton coaching, organising badminton competitions and other related services.
MPay said in view of the conditions of the SSA that could not be fulfilled, the company had on Dec 29, 2017 issued a letter of settlement to the vendors, which they accepted.
Under the arrangement, PJBC agrees to assign all its existing and future rights and/or goodwill in PJBC to newco. All the PJBC’s activities and dealings will be deemed to be carried out for and on behalf of the newco upon execution of the letter of settlement and until the incorporation of the newco.
PJBC will be responsible for any losses or liabilities incurred on and before the incorporation of the newco; and it will continue to undertake all the responsibilities and obligation under the SSA where applicable.
The consideration of RM450,000 paid for the subscription of additional shares in PJBC will be refunded to the company.
“The arrangement is not expected to have any material effect on the earnings per share, net assets per share, gearing, share capital and substantial shareholders’ shareholding of the company and its subsidiaries for the financial year ended Dec 31, 2017,” MPay said.
The arrangement is not subject to approval of the shareholders of MPay and any relevant government authorities.
MPay closed up 6.67% at 24 sen with 14.43 million shares traded.