Inix Technologies to acquire 30% stake in Galactic Maritime

KUALA LUMPUR (Oct 26): Inix Technologies Holdings Sdn Bhd is looking to diversify into dredging and land reclamation via a RM7.2 million acquisition of a 30% stake in Galactic Maritime (Malaysia) Sdn Bhd, according to a report in The Edge Financial Daily today.

“A 30% stake is good enough for us to share the profit. We will remain as an IT company, with expectation that the proposed venture will in the future contribute 25% or more of its net assets and/or net profit,” said Inix executive director Chow Hung Keey.

Under the terms of the proposed deal, Galactic Maritime’s vendors guarantee Inix that the former will achieve a net profit of at least RM4 million for the period of April 1, 2014 to July 31, 2015, and a net profit of at least RM3 million for FY2016.

Galactic Maritime is principally involved in the provision of reclamation dredging and environmental protection dredging services. It owns five vessels with an average fleet age of eight years.

The land reclamation business in Malaysia is expected to reach RM2.8 billion this year and could generate demand for dredging and land reclamation services for at least the next five to 10 years, according to a report from Smith Zander International Sdn Bhd, said Chow.

“There are a lot of developments involving reclamation works, particularly in Penang, Melaka and Johor,” Chow stated. “This gives us an opportunity to venture into the business.”

Inix is also looking to proceed with land reclamation works for the Melaka Gateway development, the Pengerang Petroleum and Maritime Industrial Park in Johor, and Phase 2 of Seri Tanjung Pinang in Penang.

Inix plans to fund the acquisition through a proposed rights issue of up to 278.2 million new rights shares with 208.6 million warrants, raising RM27.82 million, RM5.5 million of which will go to the purchase of Inix’s new vessel for dredging and land reclamation activities. The rest of the monies will be used for the company’s IT business expansion and working capital.

The company also narrowed its net loss to RM44,000 in FY2015, compared to the RM1.37 million in 2014. “Management is of the view that the positive outlook for mobile gaming and improving IT infrastructure will provide opportunities for our company to tap into the mobile gaming sector,” Chow added.