RGC Buying Stake in Chinese Tech Firm

(Reuters) – RCG Holdings Ltd (RCG.L) 802.HK said its Malaysian unit would buy a 15 percent stake in Chinese technology consultant A-1 Development Inc for about 11.8 million pounds in stock.

RCG will issue 15 million new shares at 78.95 pence each, a 33.7 percent premium to the stock’s closing price on AIM on April 6, the fingerprint and facial recognition software firm said in a statement.

The investment via its Virtual Storage Center Sdn Bhd unit is expected to help boost its operations in China, RCG, which focuses on the Asia Pacific region, said.

The consideration shares account for 6.44 percent of RCG’s existing shares and about 6.05 percent of its issued share capital after the purchase.

A-1 Development was set up last week by investment holding firm Top Digital Holdings to provide information technology and business process outsourcing and consultancy services to China Information Broadcast Network Co Ltd (CATV).

Top Digital is owned by shareholders of CATV.

A-1 Development plans to provide services including facial recognition logon applications and other software of Virtual Storage to CATV, the Macau-based company said.

RCG shares were down 1.3 percent at 57 pence at 0753 GMT on the London Stock Exchange, after touching a low of 56.25 pence earlier. ($1=.6784 Pound) ($1=7.749 Hong Kong Dollar)

(Reporting by Austin Lobo in Bangalore; Editing by Gopakumar Warrier)