MNC’S latest MOU appears to have the right ingredients
MNC Wireless Bhd (MNC) has signed its fourth memorandum of understanding (MOU) in three years with latest involving the film industry this week.
On the surface, the venture appears to have all the right ingredients – it has a solid partner in Monfil Pictures Ltd, where its founder and director Harold Monfils has 30 years of experience in the commercial, documentary and feature film industry.
Robbie Krishnan – the nephew of tycoon T. Ananda Krishnan – is appointed as a director of MNC effective from today.
On Sept 12, Robbie acquired eight million shares of MNC at 12 sen each via off market transaction, representing 1.67% of the total number of issued shares of MNC.
As of yesterday, shares of MNC were at the 11 sen level.
MNC’S share price has gone up from the four sen level on Aug 6.
However, the same cannot be said about its financial performance.
For its financial year ended April 30, MNC recorded a net loss of Rm3.39mil from a net loss of RM699,000 a year ago, while revenue rose to Rm27.53mil from Rm16.36mil previously. Since 2014, the company has been in the red, with the exception of 2016 when it turned around with a net profit of RM313,000.
Notably, the company has recently raised some Rm47.84mil via a rights issue exercise.
Will MNC be able to deliver on its latest business venture when there has yet to be material development on its three other previous Mous?
On Sept 18, MNC announced that it would be investing a “couple of million in US dollars” into its new venture following the MOU with the New Zealand-based production house.
Under the MOU, the Ace Market-listed specialised digital technology solution provider and Monfils Pictures will form a joint venture company, with MNC and Monfils holding 51% and 49% interest respectively.
Together they will produce and market a movie on the biography of Tim Page, a war photo journalist.
Renowned director Francis Ford Copola produced the movie “Apocalypse Now” based on Page’s character.
During the press conference, MNC executive director and chief executive officer Christopher Tan said the investment would mainly be funded via internal funds, and bank borrowings if necessary.
While the MOU is expected to take up to six months to finalise, Tan is confident about completing the deal by the end of the year. He says the deal is 75% done.
Tan expects the new business to start contributing to the group’s earnings in two years, which is concurrent with the completion of the first movie.
During the signing, Monfils Pictures was represented by founder, director and producer Harold Monfils and the event was witnessed by Robbie.
Robbie is also an executive producer of Astro Measat Broadcast Network System, which focuses on branded and content development.
When reporters asked about Robbie’s role in MNC, Tan said he would facilitate and bring in business to the company’s film segment.
It would appear that Robbie already has a prior working relationship with Monfils Pictures, as he was involved in the latter’s “The Laya Project”, a documentary on the Asian tsunami back in 2004.
This MOU also involved capital investment in terms of intellectual property rights. There will be discussions on the details of the JV in terms of collaboration as well as casting, research and development, scripting, editing, shooting schedule, marketing and distributorship. The relevant definitive agreement is expected to be finalised within six months, according to Tan.
Four Mous so far
Including Monfils Pictures, the company has inked four Mous over the last three years. Two of the Mous were with Malaysian public listed companies.
The first agreement was with M3 Technologies (Asia) Bhd on April 12, 2017, for the development of a Business-to-business and Consumer-to-consumer focused trading platform.
The second one was with Sanichi Technology Bhd’s subsidiary, Sanichi Property Sdn Bhd on Jan 15, 2018, for the purpose of online leasing or short-term luxury rental services for 120 units of Marina Point, Melaka.
To date, there has been no material development on the M3 Technology and Sanichi Mous.
The third MOU was with Urban Setup Sdn Bhd on July 15. This was for the purpose of providing a transparent, secured and convenient mobile physical gold retail platform in Malaysia.
MNC’S recent rights issue exercise which raised some Rm47.84mil, consisted of 1.5 billion new ICPS together with up to 29.96 million free detachable warrants (warrants B).
This was on the basis of 50 ICPS together with one free Warrant B for every 10 existing ordinary shares in MNC. This exercise was first announced in April this year.
In a filing with Bursa Malaysia when it announced its fourth quarter results on June 28, MNC said the group would utilise the rights issue proceeds to expand the wireless and mobile application service, multimedia related service and digital related service business segments.
For now, the company has a share base of 478.38 million, giving it a market capitalisation of Rm73.92mil at its current price of 11 sen.
It also has 188.95 million warrants A which will expire in November 2021.
MNC is a specialised digital technology solution provider, involved in the development of Information Communication Technology solutions, mobile application, social media applications development and management, mobile messaging platform and mobile billing platform.
Metronic Global Bhd is the single largest shareholder of the company with a 16.07% stake in the company.