Technology

Synagie to partner computer manufacturers to expand insurtech business


Fri, Sep 18, 2020 – 11:42 AM

CATALIST-LISTED Synagie Corporation is partnering leading computer manufacturers to, among other things, bundle its accidental damage protection solutions and third-party administration services in major government tenders for the supply of laptops and tablets, it said late on Thursday in response to Singapore Exchange (SGX) queries.

It is also in advanced discussions with a leading computer manufacturer to offer laptops on a “device-as-a-service” basis to small and medium-sized enterprises in Singapore, and exploring partnerships with consumer electronics and mobile phone chain stores to further expand distribution channels for its mobile phone screen protection insurance products.

Furthermore, the company is in discussions with various parties in the wearable technology and computer accessories sectors to offer its extended warranty solutions and third-party administration services, it said.

Synagie was responding to queries from the SGX on Tuesday around the proposed sale of its e-commerce business, which Synagie had said would allow it to focus on its insurtech business.

Under the proposed sale, Synagie will dispose of its entire e-commerce, e-commerce enabler and logistics business for about S$61.7 million to a consortium of investors, including its three founders and Alibaba Singapore, the company had said in August.

On Tuesday, SGX had asked Synagie to explain why its board is of the opinion that the net distributable amount (NDA) from the proposed sale should be distributed to shareholders instead of being invested to grow the insurtech business.

In response, Synagie said it foresees that any future expansion of the insurtech business is likely to be organic rather than through acquisitions, given market uncertainties in relation to Covid-19.

It added that there is no assurance that investing the NDA into the insurtech business will allow shareholders to see returns on investment in the near term, given the market risks and the time required to incubate and grow such new businesses.

Synagie said it can consider fundraising if future opportunities requiring substantial cash outlay arise. Acquisitions can also be undertaken by the company through the issuance of new shares to sellers, it added.

The company said a key rationale for its board approving the proposed sale was the opportunity for shareholders to immediately realise the value of their investments, particularly in the group’s e-commerce, e-commerce enabler and logistics business.

Save for the impact of non-recurring business-to-business (B2B) orders for Covid-19-related products, the group has been loss-making and has not paid any dividend since its initial public offering in August 2018, it added.

Synagie also clarified that it will retain about S$930,000 from the proposed sale consideration for working capital and tax-related expenses, which may be used to expand its insurtech business if necessary.

The company will also set aside S$1 million to satisfy claims which may arise under the sale and purchase agreement. If no such claims arise, the group may utilise the funds for the insurtech business, including to expand the business, it added.

SGX had also asked Synagie if its B2B orders for Covid-19-related products would be sold off as part of the proposed disposal. Synagie said the orders were in the ordinary course of the group’s e-commerce business segment and satisfied through Synagie SG, which will be transferred to the purchaser.

All non-recurring B2B orders had been fulfilled by the group before June 30, and there have been no new orders since then, it added.

Synagie shares were trading flat at 21.5 Singapore cents as at 10.57am on Friday.





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