TIDMGST
RNS Number : 7276S
GSTechnologies Ltd
18 July 2022
This announcement contains inside information for the purposes
of Article 7 of the Market Abuse Regulation (EU) 596/2014 as it
forms part of UK domestic law by virtue of the European Union
(Withdrawal) Act 2018 ("MAR"), and is disclosed in accordance with
the Company's obligations under Article 17 of MAR.
18 July 2022
GSTechnologies Limited
("GST" or the "Company" or the "Group")
Disposal of EMS Wiring Systems
GSTechnologies Limited (LSE: GST), the fintech and information
technology solutions company, is pleased to announce that on 17
July 2022, the Company entered into a binding agreement to sell its
subsidiary, EMS Wiring Systems Pte. Ltd ("EMS Wiring Systems" or
"EMS"), to Teo Chiah Chiu Raphael ("Raphael Teo"), the Chairman of
EMS (the "Disposal").
Highlights
-- Disposal of EMS Wiring Systems to a member of its management team
-- Consideration for the Disposal comprises the return of the
60,000,000 GST shares held by Raphael Teo to the Company
-- The Disposal enables the Group to focus solely on its stated
strategy of building a blockchain enabled neobanking business,
removing a loss-making, no longer core, subsidiary
Details of the Disposal
The consideration payable by Raphael Teo for the entire issued
share capital of EMS, which is currently held by the Company, will
be the transfer to the Company, by way of a share buyback, of
60,000,000 ordinary shares of no par value in GST held by him (the
"Consideration Shares"). At the closing mid-price of 1.09p of the
Company's shares on 15 July 2022, the Consideration Shares were
valued at GBP654,000 and they represent approximately 3.87 per
cent. of the Company's issued share capital. The Company intends to
hold the Consideration Shares in treasury for future issue or
cancellation in due course.
Completion of the Disposal is conditional, inter alia, on
completion of the buyback of the Consideration Shares, and the
Company and EMS entering into a deed of agreement to waive all
outstanding liabilities between the Company and EMS. A further
announcement will be made in due course when the Disposal
completes.
EMS Wiring Systems, based in Singapore, provides wireless,
electronic cabling, security, and other solutions to clients
operating in the infrastructure development space. In the year
ended 31 March 2021, the Company's last reported annual financial
results, EMS had sales of US$2.83 million and made a net loss of
US$0.14 million, after receiving US$0.58 million of Covid-19
related financial assistance from the Singapore Government. For the
year ended 31 March 2022 EMS had increased unaudited sales of
approximately US$4.0 million, but continued to be loss making and
made an unaudited net loss of approximately US$0.5 million.
Background and reasons for the Disposal
The primary focus for the Group has, since early 2021, been on
the 'GS Fintech' subsidiaries in the UK and Singapore and the
Company's expansion into blockchain related technologies applied to
the financial services sector, specifically its plans to launch a
borderless neobanking platform providing next-generation digital
money solutions. As announced on 30 June 2022 the Company has made
significant progress in implementing its stated strategy to
roll-out a suite of offerings under its GS Money banner based on
three initial use-cases: international money transfers, borderless
accounts, and private stablecoin. Additionally, following the
completion of the acquisition of Angra Limited on 8 March 2022 the
Group has a further revenue generating subsidiary.
The Disposal is therefore in line with the Group's strategy to
focus on its fintech activities and the Disposal will remove a
non-core loss making business from the Group. Following completion
of the Disposal the Group will be able to focus its resources on
developing its blockchain enabled neobanking activities and it will
be a 'pure play' fintech group.
Related Party Transaction
Raphael Teo was a director of GST until he retired on 6 August
2021. He remains a substantial shareholder, holding 13.29 per cent.
of the Company's issued share capital. Garies Chong is currently a
non-executive director of GST. He is also a substantial
shareholder, holding 11.84 per cent. of the Company's issued share
capital. Although not a party to the Disposal agreement, it is
expected that Garies Chong will become a director of EMS upon
completion of the Disposal.
The Company has therefore treated the Disposal as a related
party transaction for the purposes of the Disclosure Guidance and
Transparency Rules in respect of the involvement of both Raphael
Teo and Garies Chong. Garies Chong has not taken part in the Board
decision to enter into the Disposal. The remainder of the Board
believes that the disposal of a non-core loss-making business,
leaving the Group to focus on its core neobanking activities, is a
positive step for the Group and unanimously resolved that the
Disposal is fair and reasonable from the perspective of GST.
Tone Goh, Chairman of GST, commented: "The disposal of EMS is in
line with our strategy to concentrate on our blockchain enabled
neobanking activities. In particular, it removes a lossmaking
subsidiary from the Group, that is not part of our future plans,
and will enable us to focus all our resources on accelerating the
role out of our suite of GS Money offerings. With these activities
gaining significant traction in recent months we look forward to
providing further updates as we progress."
Enquiries:
The Company
Tone Goh, Executive Chairman +65 6444 2988
Financial Adviser
VSA Capital Limited +44 (0)20 3005 5000
Simon Barton / Pascal Wiese
Broker
ETX Capital +44 (0)20 7392 1400
Tom Curran / Thomas Smith
Financial PR & Investor Relations
IFC Advisory Limited +44 20 (0) 3934 6630
Tim Metcalfe / Graham Herring / Florence gst@investor-focus.co.uk
Chandler
For more information please see:
https://gstechnologies.co.uk/
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END
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