Nande Khin

 ENZER Corporation, which recently saw a change of management, has found a new business lifeline to pull it out of its financial woes.

 It is also proposing to issue convertible bonds, which may result in a general offer by Ariel Singapore.

 Enzer has recently made two new acquisitions in order to enter the digital communications industry in China.

 It is positioning itself to be a provider of mobile and satellite platforms for content producers to reach out to the huge PRC population, its new executive director Low Shiong Jin told BT.

 Enzer yesterday said that it has bought over Lucky Bull Ltd for $30 million.

 Lucky Bull owns Molong Information Technology (Shanghai) Co Ltd, which in turn effectively manages and controls Mopie Information Technology Co.

 Mopie develops and distributes mobile phone products such as wireless content and applications and wireless payment solutions to other content providers.

 Lucky Bull has given a warranty of at least $2 million in net profit for the financial year ending December 2007 and of at least $5 million for the following financial year.

 Enzer also announced on Tuesday that it has taken a 51 per cent stake in China-based satellite communications provider Shanghai Jianhua Telecommunication Satellite Co for $2 million.

 Shanghai Jianhua specialises in satellite broadband networks, including transmitting data, voice and video.

 Mr Low said that the two acquisitions represent Enzer's foray into digital communications in China.

 'We now have the licences and the technology and infrastructure to collect payment from end-users for the distribution of (digital) content on each of the mobile and satellite communication platforms,' Mr Low said.

 The company wants to first target the financial services, education and online entertainment industries.

 Mopie is already one of the few authorised and licensed companies to collect payment on behalf of China Mobile and China Unicom - which have a combined subscription base of about 700 million users - from end-users all over China, said Danny Tan, CEO of Mopie.

 In the entertainment industry, it has tied up with an online games company to distribute its games through mobile phones.

 It is also developing a proprietary payment platform to allow them to tie up with banks to help collect payments from customers.

 For the education industry, Enzer has plans to tie up with universities to provide e-learning to the masses in China on that platform, said Mr Low.

 He said Enzer will be divesting its loss-making electronics components business, but will continue with consumer electronics distribution and its Enzer brand of consumer electronics.

 The company is just looking to 'maintain the status quo' on these businesses and may divest of them later, said Mr Low.

 Enzer prefers to concentrate on its new businesses, he said.

 Enzer reported a loss of $11 million for the year ended March 31. The acquisition of Lucky Bull will be paid for in part in cash ($20 million) and the rest through the allotment and issue of new ordinary shares.

 In a separate announcement yesterday, Enzer also said it is proposing a renounceable and non-underwritten issue of unsecured convertible bonds of up to a nominal value of $24.88 million.

 The bonds will have an annual coupon of 3 per cent payable semi-annually, with a tenure of three years.

 They will be issued in denominations of $1 each. Each bond can be converted to four Enzer shares.

 Full subscription and conversion of the bonds will result in 84.62 million new shares being issued which will mean a doubling of Enzer's existing share capital.

 Ariel Singapore Pte Ltd, which has a 9.1 per cent stake in Enzer, has given a irrevocable undertaking to subscribe for 5.6 million of the bonds and to subscribe for the remaining bonds if not fully subscribed.

 Ariel has recently also agreed to subscribe for 14.88 million new ordinary shares of Enzer.

 After the completion of this share placement, Ariel will have a 22.7 per cent stake in Enzer.

 If Ariel converts the bonds up to an amount that would result in it holding 30 per cent or more of the voting rights of Enzer, it will make a general offer for Enzer in accordance with the Code on Takeovers and Mergers.

August 22, 2007