Pal­ette Mul­ti­me­dia buys 51% stake in Genopharma

The Sun (Malaysia) - - SUNBIZ -

PETALING JAYA: In­for­ma­tion tech­nol­ogy com­pany Pal­ette Mul­ti­me­dia Bhd is buy­ing a 51% stake in tra­di­tional Chi­nese med­i­ca­tion trader Genopharma Sdn Bhd for RM1.53 mil­lion in an all-share deal.

The com­pany’s stock closed down half a sen to 6.5 sen yes­ter­day. The is­sue price for the new shares has not been de­ter­mined.

Pal­ette Mul­ti­me­dia, which made a half a mil­lion net loss on rev­enue of RM222,000 for the first quar­ter ended Aug 31, 2016, said the pro­posed buy will en­able Pal­ette Mul­ti­me­dia to ex­pand its earn­ing base and in­vest in a prof­itable busi­ness. It has a three-month pe­riod to do due dili­gence on the fi­nan­cial sta­tus and af­fairs of Genopharma.

The pro­posed buy comes with a profit guar­an­tee by the ven­dors, Liao Chun­hua, Liu Zhen and Tan Yi Wen, for the next three fi­nan­cial years sub­se­quent to 2016 to be at least RM1 mil­lion for fi­nan­cial year end­ing June 30, 2017, RM1.5 mil­lion for FY 2018 and RM2 mil­lion for FY 2019. The ven­dors will make up for any short­fall.

In­de­pen­dently, Pal­ette Mul­ti­me­dia un­der­takes to pro­vide ad­di­tional work­ing cap­i­tal of up to RM1 mil­lion for FY 2017 and on cu­mu­la­tive ba­sis no more than the prof­its so guar­an­teed in any of the fi­nan­cial year into Genopharma as a loan on needed ba­sis. The loan is re­payable on de­mand.

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