KUALA LUMPUR (Sept 29): Loss-making Nexgram Holdings Bhd is acquiring Wings By Croske Resort Langkawi for RM90 million, to be paid via issuance of redeemable convertible preference shares (RCPS) by its subsidiary Medic Asset Group Sdn Bhd (MAG).

MAG will acquire the 218-room resort from its 80% shareholder Croske Hotels Sdn Bhd, and Flyboys Club Sdn Bhd, which owns the remaining 20% stake, via the issuance of one million RCPS at RM90 apiece, Nexgram said on Thursday.

Notably, the acquisition is over two times the group’s market capitalisation of RM44 million, based on its share price last closing of one sen a piece.

“The group intends to acquire Wings to utilise the property as a healthcare service facility for its health and wellness treatments and services,” Nexgram said. “The proposed acquisition is in line with the Group’s expansion plans for its healthcare segment.”

It added that the group had rented the property in the past to, among others, operate a Covid-19 test facility as part of Malaysia’s International Travel Bubble Program in Langkawi.

The proposal will acquire shareholders’ approval. Nexgram’s largest shareholder is executive director Mazru Mat Yusof, who holds a direct stake of 3.43% and another 19.48% stake through Ememy Resources Sdn Bhd, followed by Ozura Firstlogix Sdn Bhd with 11.21%, its annual report showed.

Nexgram has been loss making in the last seven financial years. For the nine-month period ended April 30, 2022 (9MFY22), net loss more than doubled to RM6.08 million from RM2.84 million, as revenue more than halved to RM26.87 million, from RM73.96 million.

As at end-April, the group has accumulated losses of RM8.96 million, with cash of RM7.33 million against total borrowings of RM15.27 million.

The group, which has 4.84 billion shares outstanding, has 160 million warrants which expire on July 22, 2023 and another 281.68 million warrants expiring on Jan 15, 2024. It also has 882.8 million warrants expiring in March 2032.

Source: EdgeProp, 30 September 2022