Services

Widetech to raise RM200m Islamic bonds

Date : Thursday, 27 September 2007

Consumer products division requires funding, says CEO

KUALA LUMPUR, THURSDAY, 27TH SEPTEMBER 2007 - Widetech (M) Bhd, which targets to double sales in its financial year ending March 31, 2009 (FY09) from RMI5 million in FY07, is looking to raise RM200 million by issuing Islamic bonds for its consumer business.

Its chief executive officer Daniel Kong said its consumer products division required funding to finance receivables from Koperasi Konsumer Malaysia Bhd. "It is a (10-year) facility whereby we draw down as and when funding is needed," he told reporters after Widetech's AGM here yesterday.

Widetech is involved in the trading of consumer products through its wholly-owned subsidiary Goldwealth Capital Sdn Bhd, which primarily supplies electrical appliances and home furniture to the co-operative.

Kong said Widetech would be focusing on its consumer and gaming businesses. Its consumer business contributed over RM2 million to net profit in FY07 while its gaming business, which started in the fourth quarter of FY07 in Cambodia and Vietnam, contributed RM1.2 million.

Widetech holds 60% of Ace Unicorn Ltd and 50% of Remarkable Group Ltd, both of which are involved in the provision of equipment and management services for gaining operations, 65% of Enselini International Ltd, which is solely involved in gaming operations, and 75% of Lao-Malaysia Investments Group, which carries out hotel and gaming operations.

He said: "FY09 will be a much better year as quite a number of our overseas projects are coming onstream at the moment." Kong added that sales in FY08 would be lower as the company "had not been doing much business due to a change in strategy."

The company's overseas projects, currently focused on Cambodia and Vietnam, contributed to 30% of revenue in FY07 and now include a RM10.5 million investment in a three-star, 50-room hotel with electronic gaming facilities in Laos, which is scheduled to open in November this year, he said.

He said Widetech had been awarded a 50-year lease from Laos' provincial government for the refurbishment of the abandoned Riveria Hotel, located in the Thai border district of Thakhek.

Additionally, Kong said through the lease, Widetech would benefit from not having to pay for the land and building while the hotel's first year of operations would be tax exempted.

He also said the company was focused on achieving organic growth while being open to merger and acquisitions which enhanced share-holders' value.

On Widetech's stock price, he said the counter was a long-term buy in which investors would see returns "more than double" in three to five years. "In a way it is undervalued, but we expect an improvement," he added.