This article first appeared in The Edge Malaysia Weekly on April 22, 2024 - April 28, 2024

The crux of the matter between AwanBiru Technology Bhd (Awantec) and Bursa Malaysia is the sustainability of the former’s business.

The regulator feels that Awantec does not have an adequate level of business to sustain its operations. Hence, it wants the company to come up with a regularisation plan involving the injection of new business or the major shareholders putting in more funds to beef up its operations.

The company, which was formerly known as Prestariang Bhd, contends otherwise.

Awantec states that it has undertaken a self-regularisation plan and its existing business has demonstrated viability and sustainability. To substantiate its claim of self-regularisation, Awantec says it has recorded two consecutive quarters of profits, secured new orders and is building a healthy order book to ensure sustainability.

But that does not seem to be sufficient in the eyes of the regulators.

The threat of its delisting has sent Awantec’s share price tumbling. Investors, who had hoped that the company was on its way out of the doldrums, were dealt a severe blow.

Awantec, which is the managed service provider (MSP) for Google Cloud Malaysia, is one of the few companies that are involved in the softer side of technology. As an MSP, it is very much involved in migrating government documents to the cloud.

Before going into cloud technology, Awantec gained prominence in 2017 when it was awarded a RM3.5 billion contract to upgrade and integrate the border control systems for the Immigration Department. In 2019, the Pakatan Harapan government cancelled the contract.

Last month it won a suit against the government for cancelling the contract and was awarded RM231.5 million. It is seeking a bigger quantum.

There is potential in Awantec and it is the duty of the board and management to convince Bursa of that potential.

A delisting will only hurt the shareholders.

Save by subscribing to us for your print and/or digital copy.

P/S: The Edge is also available on Apple's App Store and Android's Google Play.