Red Sena trims QA targets to a handful

PETALING JAYA: Red Sena Bhd, which saw its net loss widen to RM3.78 million in the fourth quarter ended Sept 30, 2017, said that it has narrowed its list of potential qualifying acquisition (QA) candidates to only a handful during the past six months.

It said that deal certainty and valuation are the two key challenges in the course of its engagement with potential vendors.

“The challenges of providing deal certainty to potential vendors and offering an attractive valuation are closely intertwined. One of the ways to improve deal certainty is to ensure that the QA valuation is attractive as perceived by the market. This will have a positive effect on the share price of Red Sena’s shares. For as long as the market price rises above the cash value, deal certainty is assured,” it added.

Despite the challenges, the company said it will persevere to conclude a QA. It noted that the ensuing quarter will be the last practicable window to sign a conditional sale and purchase agreement, in view of the approval process that it would have to go through.

Red Sena has until Dec 10, 2018 to secure a QA.

Meanwhile the company said its net loss widened on lower rate of returns from investment income from Islamic Murabahah deposits under the cash trust account. For the full year ended Sept 30, 2017, it posted a net loss of RM7.6 million on higher amortisation charge of public issue cost during the year.

Red Sena’s share price closed unchanged at 46 sen with a total of 320,000 shares traded yesterday.