REG - GSTechnologies Ltd - Disposal of EMS Wiring Systems

GSTechnologiesAnnouncement

18/07/2022 07:00

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RNS Number : 7276S  GSTechnologies Ltd  18 July 2022

This announcement contains inside information for the purposes of Article 7 of
the Market Abuse Regulation (EU) 596/2014 as it forms part of UK domestic law
by virtue of the European Union (Withdrawal) Act 2018 ("MAR"), and is
disclosed in accordance with the Company's obligations under Article 17 of
MAR.

 

18 July 2022

GSTechnologies Limited

("GST" or the "Company" or the "Group")

Disposal of EMS Wiring Systems

 

GSTechnologies Limited (LSE: GST), the fintech and information technology
solutions company, is pleased to announce that on 17 July 2022, the Company
entered into a binding agreement to sell its subsidiary, EMS Wiring Systems
Pte. Ltd ("EMS Wiring Systems" or "EMS"), to Teo Chiah Chiu Raphael ("Raphael
Teo"), the Chairman of EMS (the "Disposal").

Highlights

·    Disposal of EMS Wiring Systems to a member of its management team

·    Consideration for the Disposal comprises the return of the 60,000,000
GST shares held by Raphael Teo to the Company

·    The Disposal enables the Group to focus solely on its stated strategy
of building a blockchain enabled neobanking business, removing a loss-making,
no longer core, subsidiary

Details of the Disposal

The consideration payable by Raphael Teo for the entire issued share capital
of EMS, which is currently held by the Company, will be the transfer to the
Company, by way of a share buyback, of 60,000,000 ordinary shares of no par
value in GST held by him (the "Consideration Shares").  At the closing
mid-price of 1.09p of the Company's shares on 15 July 2022, the Consideration
Shares were valued at £654,000 and they represent approximately 3.87 per
cent. of the Company's issued share capital.  The Company intends to hold the
Consideration Shares in treasury for future issue or cancellation in due
course.

Completion of the Disposal is conditional, inter alia, on completion of the
buyback of the Consideration Shares, and the Company and EMS entering into a
deed of agreement to waive all outstanding liabilities between the Company and
EMS.  A further announcement will be made in due course when the Disposal
completes.

EMS Wiring Systems, based in Singapore, provides wireless, electronic cabling,
security, and other solutions to clients operating in the infrastructure
development space. In the year ended 31 March 2021, the Company's last
reported annual financial results, EMS had sales of US$2.83 million and made a
net loss of US$0.14 million, after receiving US$0.58 million of Covid-19
related financial assistance from the Singapore Government.  For the year
ended 31 March 2022 EMS had increased unaudited sales of approximately US$4.0
million, but continued to be loss making and made an unaudited net loss of
approximately US$0.5 million.

Background and reasons for the Disposal

The primary focus for the Group has, since early 2021, been on the 'GS
Fintech' subsidiaries in the UK and Singapore and the Company's expansion into
blockchain related technologies applied to the financial services sector,
specifically its plans to launch a borderless neobanking platform providing
next-generation digital money solutions.  As announced on 30 June 2022 the
Company has made significant progress in implementing its stated strategy to
roll-out a suite of offerings under its GS Money banner based on three initial
use-cases: international money transfers, borderless accounts, and private
stablecoin.  Additionally, following the completion of the acquisition of
Angra Limited on 8 March 2022 the Group has a further revenue generating
subsidiary.

The Disposal is therefore in line with the Group's strategy to focus on its
fintech activities and the Disposal will remove a non-core loss making
business from the Group.  Following completion of the Disposal the Group will
be able to focus its resources on developing its blockchain enabled neobanking
activities and it will be a 'pure play' fintech group.

Related Party Transaction

Raphael Teo was a director of GST until he retired on 6 August 2021.  He
remains a substantial shareholder, holding 13.29 per cent. of the Company's
issued share capital.  Garies Chong is currently a non-executive director of
GST.  He is also a substantial shareholder, holding 11.84 per cent. of the
Company's issued share capital.  Although not a party to the Disposal
agreement, it is expected that Garies Chong will become a director of EMS upon
completion of the Disposal.

The Company has therefore treated the Disposal as a related party transaction
for the purposes of the Disclosure Guidance and Transparency Rules in respect
of the involvement of both Raphael Teo and Garies Chong.  Garies Chong has
not taken part in the Board decision to enter into the Disposal.  The
remainder of the Board believes that the disposal of a non-core loss-making
business, leaving the Group to focus on its core neobanking activities, is a
positive step for the Group and unanimously resolved that the Disposal is fair
and reasonable from the perspective of GST.

Tone Goh, Chairman of GST, commented: "The disposal of EMS is in line with our
strategy to concentrate on our blockchain enabled neobanking activities.  In
particular, it removes a lossmaking subsidiary from the Group, that is not
part of our future plans, and will enable us to focus all our resources on
accelerating the role out of our suite of GS Money offerings.  With these
activities gaining significant traction in recent months we look forward to
providing further updates as we progress."

Enquiries:

 The Company
 Tone Goh, Executive Chairman                            +65 6444 2988
 Financial Adviser
 VSA Capital Limited                                     +44 (0)20 3005 5000
 Simon Barton / Pascal Wiese
 Broker
 ETX Capital                                             +44 (0)20 7392 1400
 Tom Curran / Thomas Smith
 Financial PR & Investor Relations
 IFC Advisory Limited                                    +44 20 (0) 3934 6630

 Tim Metcalfe / Graham Herring / Florence Chandler       gst@investor-focus.co.uk

For more information please see: https://gstechnologies.co.uk/
(https://gstechnologies.co.uk/)

 

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