Three-year net profit guarantee
Halex Holdings stocks rose on news that a subsidiary of the Malaysian agricultural chemical manufacturer and distributor has signed a memorandum of understanding to acquire at least 51 percent of a Cambodian casino company.
On September 14, the company announced the MOU with Datuk Seri Stanley Goh Teik Keng, a major shareholder in VW Win Holdings, which operates a Cambodian lottery, according to the Malaysian Chronicle.
The MOU requires that Halex submit written approval from authorities in Cambodia, and VW Win obtain a valid online gaming license in Cambodia. VW Win says it will guarantee Halex a net profit of not be less than RM12.93mil (US$3 million) for three years starting in 2016.
Despite the spike in share values ahead of the news—Halex stocks jumped almost 90 percent amid the anticipation—it’s “not a done deal yet,” wrote the Chronicle. Following the announcement, the share price fell steadily.
Halex hopes to acquire a 51 percent stake in privately-held VW Win. The MOU conditions must be fulfilled by December 10.
Goh is associated with the Century Dynasty group, which began as a network marketer and has now diversified into coal mining in Indonesia, shipping in Singapore and investment advisory in Hong Kong, reported the Khmer News. The publication said the acquisition of a gaming license is likely to cause the stock price to rise on a more sustainable basis.
