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ACQUISITION OF WARRANTS (ACQUISITION) AND DISPOSAL OF SHARES (DISPOSAL) IN K-STAR SPORTS LIMITED (K-STAR)(TRANSACTIONS")

NETX HOLDINGS BERHAD

Type Reply to Query
Reply to Bursa Malaysia's Query Letter - Reference ID IQL-02022021-00002
Subject ACQUISITION OF WARRANTS (ACQUISITION) AND DISPOSAL OF SHARES (DISPOSAL) IN K-STAR SPORTS LIMITED (K-STAR)(TRANSACTIONS")
Description
NETX HOLDINGS BERHAD 
-  ACQUISITION OF WARRANTS AND DISPOSAL OF SHARES IN K-STAR SPORTS LIMITED
Query Letter Contents

We refer to your Company’s announcement dated 29 January 2021, in respect of the aforesaid matter.

 

In this connection, kindly furnish Bursa Securities with the following additional information for public release:-

  1. The net profits and net assets of K-STAR based on its latest audited accounts.
  2. The prospects of K-STAR.
  3. The rationale for the Acquisition and Disposal respectively.
  4. The expected gain and losses to the group arising from the Transactions.

Please furnish Bursa Securities with your reply within one (1) market day from the date hereof.

 

Yours faithfully

 

LISTING

REGULATION

                                                                                                                                                                        

Cc : Market Surveillance Dept., Securities Commission (via fax)

(Unless otherwise defined in this announcement, all terms used herein shall have the same meaning as those defined in the announcement dated 29 January 2021.)

 

Reference is made to the Company’s announcement made on 29 January 2021. 

 

NETX Holdings Berhad (“NETX” or “the Company”) wishes to further announce on the following : 

 

1. The net profits and net assets of K-STAR based on its latest audited accounts.

 

Pursuant to the latest consolidated audited financial statements of K-Star as at 31 December 2019, K-Star was recorded a loss after taxation of RMB10.92 million and net assets was RMB41.15 million.

 

 

2. The prospects of K-STAR.

 

With global health care spending expected to rise in future, it will likely present many opportunities for the sector. While there will be uncertainties, stakeholders can navigate them by factoring in historic and current drivers of change when strategizing for 2020 and beyond. Among these drivers are a growing and aging population, rising prevalence of chronic diseases, infrastructure investments, technological advancements, evolving care models, higher labor costs amidst workforce shortages, and the expansion of health care systems in developing markets. Stakeholders can consider as they lay a solid foundation for the future. The entry of non-traditional players in the health care sector has the potential to both support and suppress incumbent’s efforts to grow revenue.

 

 

3. The rationale for the Acquisition and Disposal respectively.

 

Kanger International Berhad (“KIB”) had on 22 September 2020 entered into a collaboration agreement with Sinopharm Group Hunan Changde Medica Co., Ltd relating to the distribution of Covid-19 vaccines(s) and medical equipment products in Malaysia. Sinopharm is the largest and oldest biotech company in China. It currently has Covid-19 vaccines under Phase 3 trials. The collaboration agreement is valid until 24 September 2023.

 

K-Star had on 26 October 2020 entered into a Memorandum of Understanding (“MOU”) with KIB for the appointment of K-Star or any of the subsidiaries of K-Star as the sale agent for Covid-19 vaccines for the private clinics in Malaysia. K-Star intends to expand its business activities into the healthcare sector and the sale and marketing of Covid-19 vaccines.

 

K-Star had on 4 January 2021 via K Star Healthcare Sdn. Bhd. (“K Star Healthcare”), the wholly-owned subsidiary of K-Star, entered into a Provisional Offtake Agreement (“POA”) with AT Glove Engineering Sdn. Bhd. (“ATGE”), a wholly-owned subsidiary of AT Systematization Berhad (“AT Systematization”) for promoting, marketing, selling of medical glove product to the People’s Republic of China (“China”) and Taiwan.

 

The Board is of the opinion that the acquisition of shares and warrants in K-Star will allow NETX Group to diversify its investment in companies in various industries. However, The Board had decided to immediately dispose the shares due to the volatility of the market sentiment exacerbated by the introduction of the movement control to prevent further loss on investment. The loss in trading under this circumstance could not be foreseen and necessary action taken to safeguard the Group’s financial position.

 

 

4. The expected gain and losses to the group arising from the Transactions.

 

The Disposal of Shares represented a loss of RM3,328,826 to the Group.

 

 

This announcement is dated 3 February 2021. 





Announcement Info

Company Name NETX HOLDINGS BERHAD
Stock Name NETX
Date Announced 03 Feb 2021
Category General Announcement for PLC
Reference Number GA1-03022021-00068




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