Goodway finds a white knight in NSA Technology

PETALING JAYA: Loss-making Goodway Integrated Bhd is getting a white knight in the form of NSA Technology Sdn Bhd that will result in the company going into ICT solutions.
In a stock exchange filing, Goodway announced that it had yesterday inked a conditional share sale agreement for the injection of the entire stake of NSA Technology’s ICT solutions provider unit, S5 Systems Sdn Bhd, into the former valued at RM900 million.
The deal will be satisfied by the issuance of 1.8 billion new Goodway shares at an issue price of 50 sen per share.
The issue price represents a premium of 11 or 28.2% to the Goodway’s last traded price prior to its suspension yesterday.
“After the proposed acquisition, S5 Systems will become a wholly owned subsidiary of Goodway, ” it told the stock exchange yesterday.
The directors of NSA Technology are Tan Sri Mohamed Al Amin Abdul Majid and Datuk Sri Johann Young, who in turn holds a 100% stake in the company.
Upon completion of the proposed acquisition, NSA Technology will hold a 94.22% stake in Goodway.
NSA has no plans to privatise Goodway and is proposing to seek an exemption to undertake a mandatory takeover offer for all the remaining voting shares in Goodway not already owned by them.
After the proposed acquisition, NSA plans to undertake an offer for sale of up to 165.8 million Goodway shares to the existing shareholders at 50 sen per share, on the basis of three shares for every two shares held by each shareholder.
Additionally, NSA Technology will also be placing up to 440 million Goodway shares amounting to at least RM220 million to investors to be identified, at a price to be determined via book building.
S5 Systems is an award-winning holistic security solutions provider to various governments, governmental bodies and enterprises.
“The injection of S5 Systems is a significant milestone to Goodway’s corporate history as a listed entity. This change in business direction will not only diversify our revenue stream but also position the company in better stead amidst the growing challenges of our manufacturing business against a difficult global business landscape,” said Goodway’s CEO Tai Boon Wee in a separate press release.
The Goodway group has been reporting losses since the FY Dec 2014. The profitability of the group has been adversely affected by lower sales as a result of lower commodity prices and poorer global demand as well as the discontinuation of the group’s retailing and wholesale of natural rubber trading business.
“Notwithstanding the introduction of the new core business of S5 Systems as an ICT solutions provider, at the present moment, it is the intention for the enlarged Goodway Group to continue with its existing businesses of manufacturing and distribution of rubber compounds and related products, retreading of tyre services, retailing of natural rubber and other related goods and property development and construction,” Tai added.
The corporate exercise will require approvals from the Securities Commission Malaysia and Goodway’s shareholders, among others.