KUALA LUMPUR: Macquarie Bank Ltd is poised to become a substantial shareholder of XOX Bhd following a conditional subscription agreement signed with XOX on Wednesday whereby the mobile telecommunication service provider will allot up to 400 million new shares to the Australian bank.

In a filing with Bursa Malaysia, XOX said Macquarie was committed to subscribe to a minimum number of subscription shares of at least 12% of the volume of XOX shares traded publicly within a 12-month period.

Under the agreement, Macquarie Bank undertakes not to purchase or subscribe XOX shares to the extent that the purchase or subscription would require it to undertake a mandatory general offer (MGO) for all the XOX securities that it does not own.

Further, Macquarie Bank may sell any of the subscription shares before, on or after any subscription date.

Macquarie can subscribe up to 272.817 million XOX shares (32.9% stake) without triggering the MGO requirement.

If 400 million new shares are issued, XOX’s paid-up share capital will expand about 72% from 556.41 million shares to 956.41 million shares.

XOX expects io raise gross proceeds of RM40mil from the proposed share issuance, based on the minimum subscription price of 10 sen (the current par value of the shares) and assuming Macquarie Bank fully subscribes to the alloted shares.

The company said about 70% of the proceeds - RM28.5mil -- would be used to expand regionally its Voopee mobile application, which allows smartphone users to have an additional local area mobile number without the need for an additional SIM card, by collaborating with local mobile network operators in different countries.

As for the rest, RM5mil will be set aside to enhance the features and software maintenance of Voopee and another RM5mil will be used to expand Voopee’s network capacity to cater to the expected growth in subscriber base.

XOX intends to first expand its presence to Indonesia, the Philippines and Thailand in the next three years; and subsequently to the rest of the Asean region, subject to fund availability.

“Currently, the company is in the midst of discussions with mobile network operators in Indonesia, the Philippines and Thailand,” it said. “The expansion of Voopee in these countries are subject to the finalisation of the commercial terms as well as the assessment of the financial and commercial viability of cooperating with these mobile network operators as a Voopee global partner.”

The proposed share issuance is expected to be completed by the subscription expiry date, that is, 24 months from the date of the fulfilment of the conditions precedent in the subscription agreement.

XOX gained half a sen to close at 16.5 sen on Wednesday, with 23.637 million shares changing hands.