Key Alliance raises stake in XOX

by ASILA JALIL/ pic credit:

KEY Alliance Group Bhd is converting 248.6 million preference shares in XOX Bhd to mother shares for a total cost of RM6.2 million, thus raising its total stake in the company to 347.9 million shares or 17.83%.

This would make Key Alliance the largest shareholder in the telecommunication company (telco).

In a statement yesterday, Key Alliance stated that the move is at an appropriate time for it to increase its stake following XOX’s recent corporate announcements to capture different revenue streams.

“The investment in XOX has paid off, with the moves towards artificial intelligence vending machines, microfinancing and now, its potential partnership with foreign telcos for 5G programme; all being positives to increase revenue streams going forward, capitalising on the subscriber base,” it stated in its release.

The group owned 99.3 million shares in XOX as at Dec 31, 2019.

It added that the strategic ownership of XOX presents the group an opportunity to move into cloudbased digital healthcare solutions by utilising XOX’s e-wallet capabilities, and the connectivity, computing and storage capacity provided by Key Alliance’s data centre and cloud services.

This is in line with the group’s recent expansion plans to branch into the medical services industry.

“Alongside with a new shareholder in XOX from Hong Kong, Key Alliance now is the single-largest shareholder, cementing its strategic investment as the technological revolution of the digital economy rolls forward.

“XOX’s growth plans to boost its subscriber base and revenue through deployment of digital applications and media content will directly benefit the cloud computing and data storage businesses of Key Alliance,” it added.

On Monday, XOX signed a heads of agreement with Shanghai-based venture capital and advisory firm, Jiangsu Sulian Asset Management Co Ltd (Sulian Capital) to link up with an undisclosed Chinese telecommunication provider to explore a regional 5G mobile network deployment.

The agreement will give Sulian Capital a 10% carry-on profitability from any eventual partnership signed with the Chinese telco that Sulian Capital represents.

On July 16, XOX’s unit, XOX Media Sdn Bhd, inked a partnership agreement with Wetek Technology (M) Sdn Bhd to provide microfinancing services to its 2.2 million subscribers.

The service will also be available to individuals and small businesses who lack access to conventional banking and related services by populating XOX’s eWallet for usage in XOX Digital Marketplace.

Wetek, which has operations in Vietnam, has budgeted RM1 billion to finance low-income Malaysians.

XOX’s shares closed 14.29% or 3.5 sen higher at 28 sen yesterday, valuing the company at RM476.86 million, while Key Alliance’s shares closed 11.11% or one sen higher at 10 sen, valuing the company at RM88.47 million.