Pursuant to Rule 10.05 of the ACE Market Listing Requirements of Bursa Malaysia Securities Berhad (“Bursa Securities”), the Board of Directors of REDtone International Berhad (“REDtone”) wishes to announce that the Company had on 3 December 2013 disposed the remaining 35% shareholding held in its associate, REDtone Mobile Sdn Bhd (“RMSB”) to Theo Networks Sdn. Bhd. for a cash consideration of RM5 million only (“Disposal”).
The Company had earlier on 3 January 2012 announced its divestment of its 65% shareholding in RMSB.
Details of the Disposal
REDtone had on 3 December 2013 entered into a Share Sale Agreement for the disposal of the remaining 35% shareholding in RMSB to Theo Networks Sdn. Bhd. for a cash consideration of RM5 million only (“Disposal”). Upon the completion of the Disposal, REDtone will cease to have any interest in RMSB.
Information of RMSB
RMSB was incorporated in Malaysia on 20 June 2003 as a private limited company under the Companies Act, 1965. The authorised share capital of RMSB is RM1,000,000 comprising 1,000,000 ordinary shares of RM1 each, of which 850,000 ordinary shares of RM1.00 each are issued and fully paid-up. The principal activity of RMSB is operating a mobile virtual network and research, design, develop and commercialise the VOIP customer premise equipment.
Information of Theo Networks Sdn. Bhd.
Theo Networks Sdn. Bhd. (Company No. 1069380-H), a company incorporated in Malaysia and having its registered address at B-2-7, Block B, Megan Avenue 1, 189, Jalan Tun Razak, 50400 Kuala Lumpur. The principal activity of Theo Networks Sdn Bhd is of investment holding.
Basis of arriving at the Disposal consideration
The consideration is based on a premium over Net Tangible Assets and revenue multiples of RMSB.
Rationale for the Disposal
The Disposal will enable the Group to focus on its core business offerings as service provider for the total solutions in business communication and telecommunication, data and broadband solutions to the corporate/SME/government segments as well as the management and building of Wi-Fi networks.
Effects of the Disposal
The Disposal will not have any effect on the issued and paid-up share capital of the Company as well as the shareholdings of the substantial shareholders of the Company.
The Disposal is expected to generate RM5 million for REDtone Group for the financial year ending 31 May 2014. It is however not expected to have a material effect on the net assets and gearing of the Company and its Group of Companies for the financial year ending 31 May 2014.
Directors’ and Major Shareholders’ Interests
None of the Directors and/or major shareholders of RIB and/or persons connected with them has any interest, direct or indirect, in the Disposal.
Directors’ Statement
The Board of Directors of REDtone having considered all aspects of the Disposal is of the opinion that the Disposal is in the best interest of the REDtone Group.
Approval Required
The Disposal is not subject to the approval of REDtone’s shareholders.
The highest percentage ratio pursuant to Rule 10.02(g) of the ACE Market Listing Requirements of Bursa Securities for the Disposal is 4.7% of Net Assets based on the latest Audited Financial Statements of REDtone as at 31 May 2013.
This announcement is dated 3 December 2013.