Hextar Technologies to exit warehouse segment after RM78.31 mil land disposal

• “Upon completion of the (disposed) proposals, HexTech will continue mainly with its logistics, trading and technology and other businesses, such as insurance agency and investment holding,” HexTech said in a filing on Tuesday (July 4).

KUALA LUMPUR (July 4): Hextar Technologies Solutions Bhd (HexTech) is set to leave its warehousing segment upon completion of the proposed land sales that will enable the company to raise RM78.31 million cash to expand its technology businesses.

“Upon completion of the (disposed) proposals, HexTech will continue mainly with its logistics, trading and technology and other businesses, such as insurance agency and investment holding,” HexTech said in a filing on Tuesday (July 4).

Hextech recently proposed to sell its lands to two entities, namely SWS Capital Bhd and Hextar Holdings Sdn Bhd, which are partly owned by its controlling shareholder Datuk Eddie Ong.

SWS Capital will fork out RM61.61 million in cash to purchase the industrial lands in Nilai, Pasir Gudang and Klang, while Hextar Holdings is paying RM16.7 million to take over HexTech’s wholly owned unit Channel Legion Sdn Bhd (CLSB) that owns land in Pulau Indah, Port Klang.

The group also proposes a 30-for-one bonus issue that will enlarge its share capital to 3.99 billion shares.

“The group believes that the above disposals do not materially impact the group’s business, going forward,” it said.

It said that CLSB’s revenue and profit contributed approximately 2.3% and 27.2% respectively to HexTech’s financial year ended March 31, 2023 (FY2023), which was mainly from the lease of its property. However, the CLSB property has been vacant since January 2023.

“As for the Guper Bonded Warehouse Sdn Bhd (a wholly owned subsidiary of HexTech located in Nilai)’s properties and [the] Klang property, they are vacant land parcels and did not generate any revenue,” it added.

In the past filings, HexTech said it will use most of the proceeds for expansion of its technology businesses (RM68 million) and working capital (RM8.71 million) within the next two years.

Shares in HexTech closed unchanged at RM27.98 on Tuesday, valuing the group at RM3.60 billion.