MSM International Limited Completes Acquisition of 30% Equity Stake in X Miles Sdn Bhd

Key Highlights

• Acquisition Completed: MSM International Limited, through its wholly-owned subsidiary GCC Capital Sdn. Bhd. (“GCC”), has completed the acquisition of a 30% equity interest in X Miles Sdn Bhd (“X Miles”).
• Subscription Details: The acquisition was executed via subscription of 42,858 new ordinary shares in X Miles, representing approximately 30% of the enlarged share capital. The total cash consideration for this acquisition is RM1,000,000.
• Phased Payment Structure: The purchase consideration is structured in three parts:
  • The first payment of RM250,000 (Fixed Consideration) has already been paid by GCC.
  • The remaining Fixed Consideration of approximately RM250,002 is scheduled to be paid by 29 June 2026.
  • The Conditional Consideration of approximately RM499,998 will be paid within six months from the date that X Miles fulfills the conditions set out in the Share Subscription Agreement (SSA), but no later than six months after the financial year ending 30 April 2028.
• Board Representation: Following the completion of the acquisition, MSM International Limited has appointed a representative as a Director in X Miles, strengthening its position and influence in the associated company.
• Corporate Structure Impact: With the completion of this transaction, X Miles will be recognized as an associated company of MSM International Limited.

Important Information for Shareholders

• Potential Share Price Impact: This strategic investment expands MSM International’s business portfolio and provides potential upside from X Miles’ growth. The phased payment structure, contingent on X Miles meeting certain performance conditions, reflects a prudent approach to capital deployment and may safeguard MSM’s interests.
• Performance-Linked Payment: The large portion of the consideration (nearly 50%) is conditional upon X Miles achieving specific milestones as set out in the SSA. This ties MSM International’s exposure to the actual performance of X Miles and may directly impact MSM’s future financials depending on X Miles’ operating results.
• Board Representation: The appointment of a Director from MSM International to X Miles’ board ensures oversight and alignment of strategic interests, a potentially positive signal for investors concerned about governance and influence over associated investments.
• Regulatory Review: The announcement has been reviewed by the Company’s sponsor, UOB Kay Hian Private Limited, but not by the Singapore Exchange Securities Trading Limited (SGX-ST). The SGX-ST has not examined nor approved the contents of this announcement.

What Investors Should Watch

• Monitoring X Miles’ performance in the coming years is crucial, as it determines the timing and amount of the Conditional Consideration payment and eventually, the return on investment for MSM International Limited.
• The acquisition’s completion and the appointment of a director signal a commitment to active involvement in X Miles, which could lead to further strategic opportunities or value realization for MSM International.
• Any updates related to the fulfillment of the SSA conditions or significant developments in X Miles’ financial performance may be price sensitive and warrant close attention.

Conclusion

The completion of the acquisition marks a significant milestone for MSM International Limited, setting the stage for potential growth and value creation through its new associated company, X Miles Sdn Bhd. Shareholders are advised to remain attentive to future disclosures regarding X Miles’ performance and the fulfillment of conditions tied to the full purchase consideration.

Disclaimer: This article is for informational purposes only and does not constitute financial advice or a recommendation to buy or sell any securities. Investors should conduct their own research or consult their financial advisors before making investment decisions. The Singapore Exchange Securities Trading Limited (SGX-ST) assumes no responsibility for the content of this article.

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