REG - MobilityOne Limited - Acquisition of 49% interest in Sincere Acres

MobilityOneAnnouncement

29/09/2023 09:45

For best results when printing this announcement, please click on link below:
http://newsfile.refinitiv.com/getnewsfile/v1/story?guid=urn:newsml:reuters.com:20230929:nRSc1726Oa&default-theme=true

RNS Number : 1726O  MobilityOne Limited  29 September 2023

Prior to publication, the information contained within this announcement was
deemed by the Group to constitute inside information for the purposes of
Regulation 11 of the Market Abuse (Amendment) (EU Exit) Regulations 2019/310.
With the publication of this announcement, this information is now considered
to be in the public domain.

 

29 September 2023

MobilityOne Limited

("MobilityOne", the "Company" or the "Group")

 

Acquisition of 49% equity interest in Sincere Acres Sdn Bhd

 

Vertical integration into the healthcare information systems industry

 

MobilityOne (AIM: MBO), the e-commerce infrastructure payment solutions and
platform provider, is pleased to announce that MobilityOne Sdn Bhd ("M1
Malaysia"), the Group's wholly-owned operating subsidiary in Malaysia, has
entered into a share sale agreement (the "Agreement") with United Flagship
Development Sdn Bhd (the "Vendor") on 29 September 2023 to acquire a 49%
equity interest in Sincere Acres Sdn Bhd ("Sincere") for a total cash
consideration of RM30,000,000 (c. £5.217 million*) (together the "Proposed
Acquisition").

 

Sincere is an investment holding company with its sole business activity
comprising of owning a 100% equity interest in Hati International Sdn Bhd
("Hati", and together with Sincere, the "Sincere Group"), an operating company
in Malaysia. Hati is a healthcare information systems provider in Malaysia
focused on healthcare software development and information technology. Through
the use of cloud service platforms and software system solutions, Hati has
developed a product suite comprising of hospital information systems, clinical
information systems, business intelligence platforms and Internet of Things
(IoT)/Artificial Intelligence (AI) enabled platforms.

 

Further information in relation to Hati is available on Hati's website:
https://hatiintl.com/about-hati (https://hatiintl.com/about-hati) .

 

The Proposed Acquisition will enable the Group to, amongst other benefits,
diversify its existing business activities into the growing healthcare
information systems industry.

 

Background to and reasons for the Proposed Acquisition

 

The board of directors of the Group (the "Board") considers that the Proposed
Acquisition will result in a number of synergistic benefits for both the Group
and Hati. The Proposed Acquisition is anticipated to enable the Group to
vertically integrate its existing electronic payment systems and services with
Hati's suite of existing products to support payment methods such as credit
cards, debit cards and eWallets via online payments and over the counter
payments. In addition, the Proposed Acquisition will result in Hati being able
to utilise the Group's infrastructure and engineering know-how to automate
electronic billing and invoicing.

 

Following completion of the Proposed Acquisition, and as part of the Group's
long-term growth strategy, the Group intends to develop a payment system that
integrates the Group's e-claims and e-payments services with insurance
companies thereby resolving cash flow issues typically faced by hospitals and
clinics. The Group also intends to explore potential collaborations with the
Group's telecommunication partners in order to enable Hati's real-time IoT/AI
enabled healthcare devices to operate over 5G cellular networks. The above
proposed developments will also contribute to the Group expanding its customer
base for its existing electronic payment systems and services.

 

In addition, the Board is attracted to the future prospects of Hati. For
example, Hati has invested substantially in research and development
("R&D") to date and, accordingly, the Board believes that Hati is well
positioned to secure several commercial projects from the private and public
sectors in Malaysia. Similarly, the Board believes that there is long-term
scope for Hati to expand its healthcare information system offering to other
countries globally.

 

Terms of the Proposed Acquisition

 

Pursuant to the terms of the Proposed Acquisition, the RM30,000,000 (c.
£5.217 million*) cash consideration will be paid to the Vendor in two
tranches.  The first tranche, representing RM2.0 million (c. £0.348
million*), will be paid shortly by M1 Malaysia to the Vendor using M1
Malaysia's existing cash resources. The second tranche, representing the
balance of RM28.0 million (c. £4.869 million*) (the "Second Tranche"), is
required be paid by M1 Malaysia by 8 March 2024 (the "Second Tranche Payment
Date"). It is envisaged that the Second Tranche will be paid by the Group
using existing cash resources of M1 Malaysia.

 

While the Second Tranche Payment Date can be extended for up to a further 6
months (the "Extended Second Tranche Payment Date"), any payment in relation
to the Second Tranche made after the Second Tranche Payment Date will be
subject to an interest charge of 10% per annum. The balance amount payable for
the Second Tranche (including any interest charge if the payment is made after
the Second Tranche Payment Date) shall be reduced by RM1.0 million (c. £0.174
million*) when the payment is made by the Extended Second Tranche Payment
Date.

 

While the Proposed Acquisition is not subject to any conditions precedent,
both parties have agreed to complete the Proposed Acquisition by 4 October
2023.

 

A further announcement will be made by the Group upon completion of the
Proposed Acquisition.

 

Effects of the Proposed Acquisition

 

Following completion of the Proposed Acquisition, Sincere and Hati will be
considered as associated companies of the Group. The Group's 49% equity
interest in Sincere will not be consolidated in the Group's accounts and the
Group will only share the profit and loss of Sincere based on the Group's 49%
equity interest in Sincere.

 

The Group will continue to operate its core payment solutions business amongst
its other projects and the core strategy will also remain unchanged
notwithstanding the vertical integration of its existing products and services
to Hati's suite of products. As at the date of this announcement, Hati has 52
employees. In this regard, the existing key personnel in Hati are expected to
remain in Hati's business with no management of Hati joining the Board of
MobilityOne on completion of the Proposed Acquisition. Notwithstanding this,
the Group intends to integrate several technical specialist and software
engineering employees into Hati's business.

 

The Proposed Acquisition is not expected to have a material impact on the
Group's current revenue. The effects to the future earnings of the Group will
depend on the future performance of Hati as well as the synergistic benefits
to be achieved.

 

For the financial year ended 31 March 2022, the Sincere Group reported audited
revenue of RM0.248 million (c. £0.043 million*) and generated a loss before
tax of RM8.184 million (c. £1.423 million*). For the financial year ended 31
March 2023, the Sincere Group reported unaudited revenue of RM0.537 million
(c. £0.093 million*) and generated a loss before tax of RM7.061 million (c.
£1.228 million*).  As at 31 March 2022 and 31 March 2023, the Sincere Group
had net liabilities of RM7.743 million (c. £1.347 million*) (audited) and
RM14.804 million (c. £2.574 million*) (unaudited), respectively.  The losses
in the past were mainly due to the R&D and operating expenses incurred in
order to build the business for the coming years.

 

Dato' Hussian A Rahman, CEO of MobilityOne, commented: "I am confident of the
synergistic benefits arising from the Proposed Acquisition and Hati's
long-term prospects in the healthcare information systems industry."

 

*Based on exchange rate as on 28 September 2023 of RM:0.1739 GBP

 

 

For further information, please contact:

 

MobilityOne
Limited
+6 03 89963600

Dato' Hussian A. Rahman,
CEO                                                        www.mobilityone.com.my

har@mobilityone.com.my

 

Allenby Capital Limited

(Nominated Adviser and
Broker)                                                        +44
20 3328 5656

Nick Athanas / Vivek Bhardwaj

 

About the Group:

 

MobilityOne is one of the leading virtual distributors of mobile prepaid
reload and bill payment services in Malaysia. With connections to various
service providers across industries such as banking, telecommunications,
utilities, government agencies, and transportation, the Group operates through
multiple distribution channels including mobile wallets, e-commerce sites, EDC
terminals, automated teller machines, kiosks, and internet & mobile
banking. Holding licenses in regulated spaces including acquiring, e-money,
remittance and lending, the Group offers a range of services to the market,
including wallet, internet, and terminal-based payment services, whiteabel
e-money, remittance, lending, and custom fintech ecosystems for communities.
The Group's flexible, scalable technology platform enables cash, debit card,
and credit card transactions from multiple devices while providing robust
control and monitoring of product and service distribution.

 

For more information, refer to our website at www.mobilityone.com.my
(http://www.mobilityone.com.my)

 

 

This information is provided by RNS, the news service of the London Stock Exchange. RNS is approved by the Financial Conduct Authority to act as a Primary Information Provider in the United Kingdom. Terms and conditions relating to the use and distribution of this information may apply. For further information, please contact
rns@lseg.com (mailto:rns@lseg.com)
 or visit
www.rns.com (http://www.rns.com/)
.

RNS may use your IP address to confirm compliance with the terms and conditions, to analyse how you engage with the information contained in this communication, and to share such analysis on an anonymised basis with others as part of our commercial services. For further information about how RNS and the London Stock Exchange use the personal data you provide us, please see our
Privacy Policy (https://www.lseg.com/privacy-and-cookie-policy)
.   END  UPDFIFVTAAIAFIV