Zen Tech to enter negotiations to buy 30% stake in Malaysia’s Souqa Fintech

Zen Tech says the prospective acquisition will enable the company to “expand its business footprint into the rapidly growing financial technology (fintech) industry”.

Malaysian IT firm Zen Tech International has entered into a non-binding letter of intent to begin negotiations over the potential acquisition of an equity stake of up to 30% in domestic payment services provider Souqa Fintech.

A filing with the Bursa Malaysia stock exchange states that the intended acquisition remains subject to the firms reaching a formal agreement following the negotiations, the successful completion of a formal due diligence exercise, and shareholder approval.

Zen Tech intends to finance the proposed deal through the issuance of new ordinary shares to existing Souqa shareholders, to be completed in “multiple stages/tranches”, according to the filing. A team of bankers and solicitors is being formed to determine the value of Souqa.

Zen Tech, which specialises in corporate and e-commerce software, says the prospective acquisition will enable the company to “expand its business footprint into the rapidly growing financial technology (fintech) industry”.

The company previously acquired a 70% stake in Alpha Fintech, which provides payment gateway services and loyalty and co-branded card programmes, in April 2024 for MYR 10 million ($2.3 million) in cash.

“It is also aimed at tapping into and participating in the Islamic-based e-commerce ecosystem, indicating a deliberate move into Shariah-compliant digital financial services,” the filing continues.

Founded in 2017 in Kuala Lumpur, Souqa offers Sharia-compliant merchant acquiring services through its Islamic payment gateway subsidiary PayHalal. The fintech is currently majority owned by Asad Capital, which acquired a 58.03% stake in April, and director Patrick Thevarajah, who maintains a 30.02% stake.

Source: https://www.fintechfutures.com/