KUALA LUMPUR: Penang-based MQ Technologies Bhd is close to inking a deal with Jet Line International (M) Sdn Bhd, which will result in a reverse takeover of the listed company, said people with knowledge of the deal.
Business Times was told that RHB Investment Bank Bhd is working on the financial structure of the deal, which may result in MQ Tech issuing irredeemable convertible unsecured loan stocks (ICULS) to vendors of Jet Line.
ICULS are securities that can be used to buy underlying common shares. It is similar to a warrant except that it is subject to the conversion ratio, which means ICULS provide the benefits of a bond until it is converted into equity.
"The amount of ICULS that will be issued and the pricing of the ICULS will be determined by a due diligence. RHB is sending a team to look at MQ Tech's books and operations in Penang next week," said a source.
The MQ Tech board is expected to meet today. The company has scheduled a signing ceremony with Jet Line in Penang today.
It is understood that the agreement has more to do with the technical and operations side of the business and comprehensive plan on the corporate makeover will only be announced at a latter stage.
The privately-held Jet Line is part of the United Arab Emirates-based Jet Line International Ltd family.
The Malaysian branch last year bought over a US jet maker for RM1.1 billion, the media reported in March.
Business Times was told that the jet maker concerned is SyberJet Aircraft, a company which was once 80 per cent-owned by Emirates Investment and Development Corp. SyberJet manufactures the world's fastest and longest range light business jets - The SJ30.
Jet Line plans to fabricate and manufacture jet planes from its proposed base in Subang.
The private company's interest in MQ Tech is based on the Penang firm's moulding and fabrication expertise.
As such, the tie-up between MQ Tech and Jet Line can be structured along the lines of the Singapore Aerospace Manufacturing Pte Ltd and LKT International Bhd deal. LKT has been remodeled to SAM Engineering and Equipment Bhd.
Jet Line in a letter to MQ Tech states it is the only company in Malaysia with licence from Miti to manufacture, fabricate and assemble aircraft .
Published : 29/08/2013
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