Malaysia-based technology firm HeiTech Padu has proposed to acquire 30 percent stake in Islamic payment firm Souqa Fintech for MYR 16.17 million ($3.94 million).
HeiTech Padu said in a bourse filing on last Friday that Souqa Fintech will utilize the proceeds from the subscription for hiring key talents such as technologists, compliance personnel, fintech experts, and shariah product experts; developing payment partnerships; upgrading technology to improve core banking systems; trade debt settlement; trade advertising, marketing, trade shows, training and seminars; new business development and other expenses.
It is noted that HeiTech has been going in new area of business on top of its contracting activities by embarking in product development and solutions that fit within the mass market, transactional, and fintech related segments.
This acquisition is part of HeiTech’s pivot strategy to go deeper into the digital realm while complimenting the traditional contracting business.
Online booking and payment services are also ones of the area that HeiTech is actively building into through its internally developed products and solutions.
However, HeiTech also understands that certain initiatives would also be better achieved through strategic collaboration, partnership or investment.
According to HeiTech, recent development has seen that the Islamic investment and fintech market is experiencing significant growth, particularly in Southeast Asia.
Among the potential areas are the ar-Rahnu and takaful businesses.
Souqa Fintech’s payment solutions of PayHalal, which caters and compliments for the specific demand of Islamic financial solutions would enable HeiTech to propel further in the fintech industry, especially within the Islamic-based ecommerce ecosystem, on top of its already existing conventional market fintech solutions.
The purchase consideration of MYR 16.17 million ($3.94 million) was based on the most recent post money valuation after taking into consideration of the potential benefits and future earnings of Souqa Fintech.
The consideration will be satisfied from HeiTech’s internally generated funds.
The board of directors of HeiTech, having considered all relevant aspects, is of the opinion that the proposed share subscription is in the best interests of the company
and its shareholders. T
his proposed share subscription will support HeiTech’s long term growth and expansion strategy by leveraging on the high-potential Islamic fintech sector.
Upon the completion of the proposed share subscription, Souqa Fintech will become a 30 percent owned associate company of HeiTech.
Souqa Fintech is an integrated online payment platform company that serves as a merchant acquirer, payment processor and payment gateway.
Its payment solutions are operated under the brand name of PayHalal.
PayHalal is a Shariah-compliant payment solutions and was developed to cater as an alternative to the available conventional payment solutions in the market.
Souqa Fintech is properly licensed and regulated by Malaysian Central Bank as a non-bank provider of merchant acquiring services.
The present issued share capital of the firm is MYR 23.65 million ($5.76 million), comprising of 2515 million ordinary shares.
The present directors of Souqa Fintech included Patrick Thevarajah, Indrawathi A/P Selvarajah and Salim Bin Ramli.
The firm is currently 58.29 percent owned by Asad Capital Sdn Bhd.
Crescent Capital Sdn Bhd and Patrick Thevarajah, on the hand, hold 16.67 percent and 9.61 percent of stake respectively in the company.
The firm’s other shareholders include Effective Shield Sdn Bhd (3.98 percent), Coaxium Capital Sdn Bhd (3.69 percent), Kok Chek Leang (3.47 percent), Mohd Daud Bin Bakar (1.98 percent), Salim Bin Ramli (1.51 percent), Sarimah Binti Mohd Sharif (0.4 percent) and Q Cap LTD (0.4 percent).
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