News

1. INTRODUCTION

The Board of Directors of Prestariang ("Board") wishes to announce that the Company had on, 21 July 2020, entered into a Heads of Agreement ("HOA") with Dr. Abu Hasan Bin Ismail ("Dr. Abu"), who is the Non-Independent Executive Director, President/ Group Chief Executive Officer of the Company, for the subscription by Dr. Abu of 79,579,740 new ordinary shares in Prestariang ("Prestariang Share(s)" or "Share(s)") ("Subscription Share(s)"), representing approximately 15% of the total issued share capital of 530,531,600 Shares (excluding 1,698,500 treasury shares) of Prestariang, at an agreed subscription price of RM0.35 per Subscription Share ("Proposed Subscription").

Pursuant to the HOA, Prestariang and Dr. Abu (collectively referred to as the "Parties" and each as a "Party") shall enter into definitive agreement for the Proposed Subscription ("Definitive Agreement(s)") within 15 days from the date of HOA, or such further or extended date as the Parties may mutually agree upon ("Expiry Date").

An announcement pertaining to the salient terms will be made upon signing of the Definitive Agreement. For avoidance of doubt, the salient terms of the Definitive Agreement is pending the finalisation of the fund-raising exercise intended to be undertaken by the Company and the appointment of the relevant adviser(s) for the aforementioned corporate exercise, which will be announced by the Company in due course.

In addition to the above, the Company will make the necessary announcement(s) to Bursa Malaysia Securities Berhad ("Bursa Securities") in relation to further information of the Proposed Subscription, in compliance with the requirements pertaining to issuance of securities under Chapter 6 of the Main Market Listing Requirements of Bursa Securities, upon signing of the Definitive Agreement. 

2. SALIENT TERMS OF THE HOA

Both parties shall enter into Definitive Agreement within 15 days from the date of HOA and the Definitive Agreement shall include the following salient terms:-

(a) The completion of the Proposed Subscription shall be subject to the fulfilment of the following conditions within 6 months from the date of the Definitive Agreement or such later date as the Parties may mutually agree upon, including but not limited to:

i. The issue of the Subscription Shares and the obligation of Dr. Abu to subscribe for the Subscription Shares not being prohibited or impeded by any statute, order, rule, directive or regulation promulgated by any relevant authorities;

ii. The approval of the general meeting of the shareholders of the Company to the issuance of the Subscription Shares having been obtained;

iii. Bursa Securities having granted approval for the listing and quotation of the Subscription Shares on the Main Market of Bursa Securities, and

(b) Customary representations and warranties to be provided by each Party.

3. INFORMATION ON DR. ABU

Dr. Abu, a Malaysian aged 59, is currently the Non-Independent Executive Director, President/ Group Chief Executive Officer of Prestariang. He is the founder of Prestariang Berhad group of companies ("Prestariang Group" or the "Group"), and has been instrumental in steering the business of Prestariang Group since its inception. He has since overseen the financial and strategic growth of the Group and has formed successful partnerships with global ICT organisation, which include Microsoft, Autodesk, IBM, Oracle, CompTIA, Certiport, Prometric, ASIC and others.

He obtained his Diploma in Architecture from Universiti Teknologi Malaysia in 1982, Bachelor of Science in Architecture in 1984 and Bachelor of Architecture in 1986, both from the University of Strathclyde, Glasgow, as well as Master of Philosophy in 1988, and Doctor of Philosophy in 1996, both from the University of Sheffield, United Kingdom.

He commenced his career in 1982 with Universiti Teknologi Malaysia as an Assistant Lecturer and became an Associate Professor in 1992. He left Universiti Teknologi Malaysia in 1997 to assume the post as the first Dean at the newly created Faculty of Creative Multimedia, Multimedia University.

Subsequently in 2000, he left and joined FSBM Holdings Bhd where he was appointed as Executive Director and held the post until 2003.

In 2003, he founded Prestariang Group and has since contributed to the Group's overall business development and driving its business growth as highlighted above. In November 2010, he was appointed to the Board as the Non-Independent Executive Director of Prestariang in which he holds this position up until today. He is also the Group's Chief Executive Officer, which he is currently involved in charting the Group's overall direction and strategy, R&D, developing new products and services, and managing the overall business operations of the Group.

As at 20 July 2020, being the latest practicable date of this announcement ("LPD"), Dr. Abu does not hold any shares in the Company.

4. PROPOSED SUBSCRIPTION

The Subscription Shares are agreed to be issued at an issue price of RM0.35 per Subscription Share. The issue price of RM0.35 per Subscription Share was arrived at between Prestariang and Dr. Abu on a willing-buyer willing-seller basis after taking into consideration the historical market prices of the Company for the past 6 months (i.e. from January 2020 to June 2020) up to 20 July 2020 (being the last full trading day preceding the date of execution of the HOA), where the highest and lowest market prices of Prestariang Shares as traded on Bursa Securities during the aforesaid period are RM0.59 and RM0.10, respectively.

In fixing the price of the Subscription Share of RM0.35, the Board (save for Dr. Abu) had considered the Group's immediate funding requirements and also the current business uncertainties which the company is facing. Therefore, the Board (save for Dr. Abu) is of the view RM0.35 was reasonable to entice Dr. Abu to subscribe for the Subscription Shares given the risks that are being assumed by Dr Abu.

In addition, by fixing the issue price up front, the Group is able to secure the absolute sum of the necessary funding required (subject to obtaining shareholders' approval for the Proposed Subscription). These funds will immediately be used to fund, amongst others, working capital which have been significantly diminished due to the substantial receivables due to the Group from the SKIN contract that is currently the subject matter of litigation and the capital expenditure requirements of the Group, which is yet to be finalised at this juncture.

Further basis and justifications on the issue price of the Subscription Share will be set out in the announcement to be made in relation to the Definitive Agreement in due course.

5. RATIONALE FOR THE PROPOSED SUBSCRIPTION

After due consideration of the various methods of fund raising, the Board opines that the Proposed Subscription is the most appropriate avenue of fund raising as the Proposed Subscription enables the Company to raise additional funds for the purposes as highlighted in Section 4 of this announcement, without having to incur additional borrowings and related interest expenses. This allows Prestariang Group to preserve cash flow for operational purposes and to reduce gearing level and risk.

In addition, the execution of Definitive Agreement with Dr. Abu provides certainty on the investor of this fundraising exercise and the Proposed Subscription allows the Group to secure approximately RM27.85 million which is the necessary funding required (subject to obtaining shareholders' approval for the Proposed Subscription). Upon completion of the Proposed Subscription, the enlarged capital base is also expected to further strengthen the balance sheet position of the Company. The Proposed Subscription will enable the Group to restore and strengthen its equity capital whilst rebuilding a stable footing for the Group's business following the termination of the SKIN contract.

Further, the Proposed Subscription is another remedial effort undertaken by the Company to address the Group's working capital needs and going concern issues raised by auditors in the Independent Auditors' Report in the Group's Audited Financial Statements for the period ended 30 June 2019. Such fund raising will form part of larger strategy articulated at the 9th Annual General Meeting of the Company held on 27 November 2019 and the subsequent announcements made by Company.

6. EFFECTS OF THE PROPOSED SUBSCRIPTION

The effect of the Proposed Subscription can only be illustrated upon finalisation of the terms of the Proposed Subscription via the Definitive Agreement.

7. APPROVALS REQUIRED

The execution of the HOA is not subject to the approvals of the shareholders of Prestariang and any relevant authorities.

Nevertheless, the Proposed Subscription is subject to the following approvals being obtained:-

i. Bursa Securities, for the listing and quotation of the Subscription Shares on the Main Market of Bursa Securities;

ii. Shareholders of Prestariang at an Extraordinary General Meeting ("EGM") to be convened; and

iii. Any other relevant authority, if required.

8. DIRECTORS' AND MAJOR SHAREHOLDERS' INTEREST

Save for Dr. Abu, none of the Directors and/ or major shareholders of the Company and/ or persons connected to them have any interests, where direct or indirect, in the HOA and the Proposed Subscription.

Dr. Abu is deemed interested in the HOA and the Proposed Subscription by virtue of him being the Non-Independent Executive Director as well as the investor for the Proposed Subscription. In view of the foregoing, Dr. Abu has abstained and will continue to abstain from deliberating and voting on the Proposed Subscription and the allocation of the Subscription Shares to himself at the relevant Board meeting(s).

He will also abstain from voting in respect of his direct and/ or indirect shareholdings in the Company, if any, and has undertaken to ensure that persons connected with him will abstain from voting in respect of their respective direct and/ or indirect shareholdings in the Company, if any, on the resolution pertaining to the Proposed Subscription and the allocation of the Subscription Shares to himself at the forthcoming EGM of the Company to be convened.

9. DOCUMENT FOR INSPECTION

The HOA is available for inspection during normal office hours at the registered office of Prestariang at Level 7, Menara Milenium, Jalan Damanlela, Pusat Bandar Damansara, Damansara Heights, 50490 Kuala Lumpur.

This announcement is dated 21 July 2020.