In April 2020, the Indonesian government started imposing International Mobile Equipment Identity (IMEI) control regulation to curb the circulation of illegal phones. Phones not bought within the nation will be blocked and will not be able to connect to mobile networks. While individuals with foreign passports will be able to get temporary network access, Indonesian nationals only have two options, to buy phones from authorised resellers or to pay hefty tax on imported phones to “unlock” the network access. 

Though this was devastating for Indonesian nationals who would no longer be able to access imported phones at cheaper prices (in courtesy to GST refund obtained overseas), this was a major win for Apple authorised resellers across the nation, including Story-I Limited (ASX: SRY). 

Four months after Story-I made a comeback to the ASX in March 2023, it is now selling all 95% owned shares in its Indonesian Apple reseller business PT Inetindo to NextGen Retail Inc, a wholly owned subsidiary and lifestyle vertical of Society Pass Inc (NASDAQ: SOPA), subject to shareholder approval. 

The consideration will be cash of $2,787,173 payable on completion, which is expected to occur within 14 days after Story-I obtains shareholder approval in a general meeting. Story-I intends to call a meeting of shareholders on or about 21 August 2023 to consider, and hopefully, approve the sale.

The sale price to be received by Story-I is equivalent to approximately 0.007405 cents per Share, which represents a 23.4% premium to the closing price of Story-I shares on the ASX on 7 July 2023 and a 17.3% premium to the 20-day VWAP.

Commenting on the sale, Managing Director of Story-I Michael Chan commented, “Society Pass’s acquisition of Inetindo and the Story-I brand creates a win-win transaction for all parties involved. First, our shareholders win as the acquisition consideration represents a 23.4% premium to Story-I’s market capitalisation and allows Story-I to continue under a new name. 

Chan also mentioned that Society Pass is well-funded to quickly expand Inetindo’s retailing and maintenance businesses throughout Indonesia, which will hopefully be hugely advantageous in helping Inetindo take over other reseller competitors in Indonesia.

With the assumption that Story-I shareholders will approve the sale of PT Inetindo, Story-I will reevaluate strategic decisions during the period as to whether the Company will be wound up with all $2.7m cash returned to shareholders, or if the Company makes a further acquisition of a business or other asset.

Story-I was first listed on the ASX in 2015, but was suspended from quotation on the ASX in March 2021 due to various compliance matters. The Company was reinstated in 2023, and currently plans to open new stores in diverse locations, maintain existing partnerships, expand online sales platforms, and explore opportunities to resell gaming products thanks to recent partnership with lifestyle brand RAZER as official reseller of RAZER’s range of gaming controllers, PCs, laptops, headsets and keyboards.

Though PT Inetindo might have gained positive momentum thanks to the government’s rigorous effort to support authorised electronic products distribution, it is worth considering that there are also several reasons which negatively affect the sustainability of PT Inetindo, or any authorised Apple reseller in Indonesia, such as cut throat competition amongst several major resellers. Moreover, the majority of Indonesian citizens, particularly the lower middle class, face a significant disparity between their purchasing power and the cost of Apple products, which ultimately sparks significant competition from other non-Apple electronic brands with lower price points.