In ongoing rationalization, Prestariang to sell its tech university, UNIMY to Serba Dinamik
By Digital News Asia February 25, 2020
- Prestarian CEO cites need to prioritise limited resources to stay nimble in trying times
- Deal allows Serba Dinamik to accelerate growth of education & training business
Prestariang Bhd (Prestariang) and Serba Dinamik Group Bhd (SDGB) have today entered a conditional Share Sale Agreement (SSA) for Serba Dinamik to acquire the entire business of University Malaysia of Computer Science & Engineering (UNIMY), which was owned and operated by Prestariang Education Sdn Bhd (PESB) from Prestariang for US$591,000 (RM2.5 million).
Incorporated in 2005 as a wholly-owned subsidiary of Prestariang, PESB is mainly involved in providing personalised information and communication technology education.
Held at the UNIMY campus in Cyberjaya, the signing ceremony saw Prestariang represented by its President and Group Chief Executive Officer, Dr Abu Hasan Ismail and the chief operating officer, Baldesh Singh. On behalf of Serba Dinamik were the group managing director and CEO, Ir Ts Mohd Abdul Karim Abdullah, and the vice president of Education & Training, Dr Ts Zulkarnain Kedah. The chairman of UNIMY’s Board of Governors, Professor Emeritus Dr Hassan Said also present.
For Prestariang, the disposal is part of its rationalisation plan to improve its cash flow and working capital, while resetting the Group’s business to return to profitability. Prestariang had earlier, on 21 Jan, announced a proposed private placement of up to 10% of its issued shares to raise up to US$4.57 million (RM19.3 million). Bursa Malaysia had on 20 Feb approved the listing of and quotation of up to 48,230,100 Placement Shares to be issued pursuant to the proposed private placement.
Prestariang intends to use RM12.66 million for general working capital, RM6 million for repayment of bank borrowings, and RM630,000 to defray expenses for the private placement.
[RM1 = US$0.23]
“We are very proud to have so far produced 146 graduates from UNIMY, all of whom were much sought after by the industry. As much as we are passionate about the education business and UNIMY does produce high-quality ICT graduates that fit the demand of the industry, we need to prioritise our limited resources to stay nimble in these trying times for Prestariang,” said Abu Hasan.
“We have embarked on a rationalisation plan that includes monetising assets that are non-cash generating, so that we can reallocate the resources to strengthen our profitable business,” he adds.
The need to strengthen the business has been made urgent with the termination of its US$828 million (RM3.5 billion) SKIN project, in which Prestariang holds a 70% stake. SKIN was the national immigration control system. Prestariang Skin Sdn Bhd (PSKIN) had won the project in 2017 awarded under the Barisan Nasional government. The Pakatan Harapan government had terminated the contract.
PSKIN has initiated legal action to seek RM733 million in damages.
Coupled with the private placement of shares, Prestarian expects this divestment to put the group on a stronger financial footing.
The acquisition of a tertiary educational will allow Serba Dinamik to accelerate the expansion of its education and training business, which leverages on the oil and gas services and engineering firm’s industrial experience to design training curriculum specifically for the industry. The unit already partnered with The City & Guilds Institute of London to offer education certificates here.
UNIMY’s ICT focus will also complement Serba Dinamik’s IT solutions business, which develops software packages for industrial applications. “The availability of a highly specialised skilled force is a very important element for the development of our industries in the oil and gas and power sector,” said Abdul Karim.
“Having a university within the group will give us a tremendous edge in research and development in the global market that we are currently operating. It bodes well for Serba Dinamik’s long-term development as we expand our project portfolio globally,” he adds.
UNIMY began operations in 2013 and offers various programmes from foundation, diploma, degree and post degree; Masters and PHD with a focus in ICT related fields. Its total student enrolment for the academic year 2019 averaged about 500 students. Barring unforeseen circumstances, the proposed disposal to Serba Dinamik is estimated to be completed by the end of second quarter this calendar year.