UOA DEVELOPMENT BHD ( UOA )

Transcription

1 UOA DEVELOPMENT BHD ( UOA ) ACQUISITION OF FREEHOLD LAND IN KEPONG, KUALA LUMPUR MEASURING APPROXIMATELY 428, SQUARE FEET (9.8 ACRES) BY IDP INDUSTRIAL DEVELOPMENT SDN BHD, A WHOLLY OWNED SUBSIDIARY OF UOA, FROM TAGO (MALAYSIA) SDN. BHD. AT A TOTAL PURCHASE CONSIDERATION OF RM72,896, (TO BE REFERRED TO AS THE ACQUISITION ) 1. INTRODUCTION The Board of Directors of UOA wishes to announce that UOA through its wholly-owned subsidiary, IDP Industrial Development Sdn Bhd (the Purchaser ), had on 11 October 2011, entered into a conditional sale and purchase agreement (the Agreement ) with Tago (Malaysia) Sdn. Bhd. ( Vendor ) for the proposed acquisition of freehold land in Kepong, Kuala Lumpur at a total purchase consideration of RM72,896, (the Consideration ). 2. DETAILS OF THE ACQUISITION 2.1. Information on the Land All those freehold land held under Geran Mukim 8087 Lot 439 and Geran Mukim 7968 Lot 438 both of Mukim Batu Daerah Kuala Lumpur Negeri Wilayah Persekutuan measuring approximately 428, square feet (9.8 acres) (the Land ). The Land shall be acquired on as is where is basis free from encumbrances, charges, squatters and with vacant possession and subject to the conditions whether express or implied in the issue document of title to the Land. UOA is unable to provide information on the net book value of the Land as UOA is not privy to this information Conditions Precedent This Agreement is subject to the following major conditions:- (i) the Vendor completing the sale and purchase of: (a) one-half (1/2) of the undivided share of the Land through a Sale and Purchase Agreement dated 9/9/2010 made between the Vendor and the original proprietor; and (b) one-half (1/2) of the undivided share of the Land through a Sale and Purchase Agreement dated 7/10/2010 made between the Vendor and the original proprietor; (ii) the registration of transfer of the Land into the Vendor s name and the extraction of the titles to the Land with the name of the Vendor duly endorsed as the registered proprietor.

2 The condition period of the Agreement is thirty (30) days from the date of the Agreement with an automatic extension of a further thirty (30) days. The Agreement shall cease to be conditional upon written notification and documentary evidence from either party confirming all the conditions have been fulfilled (if not waived by the Purchaser pursuant to the Agreement). The Agreement shall become unconditional on the market day after the receipt of the said written notification (the Unconditional Date ) Consideration The Consideration was arrived at on a willing buyer willing seller basis and is/shall be satisfied in the following manner :- (i) (ii) (iii) (iv) a sum equivalent to 5% of the Consideration being the earnest deposit has been paid to the Vendor s solicitor as stakeholders prior to the execution of the Agreement; a sum equivalent to 2% of the Consideration being the retention sum to be paid to the Director General of Inland Revenue pursuant to the Real Property Gains Tax Act (Exemption)(No.2) 2009 shall be payable on the Unconditional Date to the Purchaser s solicitor as stakeholders; a sum equivalent to 3% of the Consideration being the balance deposit shall be paid on the Unconditional Date to the Vendor; the balance sum equivalent to 90% of the Consideration shall be paid to the Vendor s solicitors as stakeholders within two (2) months from the Unconditional Date with an automatic extension of one (1) month at interest of ten percent (10%) per annum There are no other liabilities and guarantees to be assumed by UOA arising from the Acquisition No independent valuation was carried out on the Land. 3. INFORMATION ON THE VENDOR The Vendor was incorporated as a private limited company on 20 February 1982 in Malaysia under the Companies Act, The present authorized share capital of the Vendor is RM5,000, comprising 5,000, ordinary shares of RM1.00 each, of which RM1,050, comprising 1,050, ordinary shares of RM1.00 each have been issued and credited as fully paid-up. The Vendor is an investment holding company and a dealer in all kinds of goods. 4. SOURCE OF FUNDING The Acquisition of the Land shall be satisfied by cash from internally generated funds.

3 5. RATIONALE FOR THE ACQUISITION UOA is committed to continue its fast turnaround development strategy that focuses in the Klang Valley. The Acquisition is in line with UOA s strategy and will further grow its development activities within Klang Valley. The Land is strategically located less than 10 kilometres from Kuala Lumpur City Centre, within the suburbs of Kepong, Kuala Lumpur, a densely populated matured township. It is located within close proximity to UOA s other successful residential projects, namely, Villa Saujanis, Taman Megah Kepong and other on-going projects such as Kepong Business Park, Villa Pines and Villa Botanica, and is highly accessible via major highways such as Duta Ulu Klang Expressway (DUKE) and Jalan Kuching. UOA is proposing to develop the Land into a residential development and is expected to commence in the year The total development costs for and the expected profits to be derived from the development of the Land have yet to be ascertained at this juncture as the detailed development plan is pending finalisation. 6. EFFECTS OF THE PROPOSED ACQUISITIONS 7.1. Earnings The Acquisition is expected to contribute positively to the earnings of UOA in the future as the development of the Land is expected to commence in the year Net Assets The Acquisition is not expected to have an immediate effect on the net assets per share. Enhancement to the net assets is expected in the future as a result of the future potential profit contribution from the development of the Land Gearing The Acquisition is not expected to have any impact on the gearing of UOA Share Capital The Acquisition is not expected to have any impact on the issued and paid-up capital of UOA as the Consideration will be satisfied entirely by cash Substantial Shareholders Shareholdings The Acquisition is not expected to have any impact on substantial shareholders shareholdings as the Consideration will be satisfied entirely by cash.

4 8. RISK FACTORS UOA is not immune to risks associated to the business environment that it operates in and the risks relating to the overall property industry which are, otherwise, faced by all businesses of similar nature. These risks include rising material and labour costs, potential labour shortage, rising financing costs, competition, changes in government regulations and changes in social, political and economic conditions in Malaysia. UOA will continue its existing diligent management policies in managing the risks that the business faces. 9. PROSPECTS The pace of growth of the Malaysian economy moderated in the second quarter (4.0%) following a weaker external environment. Nevertheless, overall growth continued to be underpinned by the sustained expansion of private domestic demand which increased by 5.2%. While the moderation in the second quarter of 2011 was mainly due to global supply chain disruptions, the underlying strength of the domestic economy remained intact as domestic demand continued to support growth. The domestic demand is expected to remain resilient and support growth amidst sustained private consumption, strong private investment and faster pace of implementation of public sector projects in the second half of (Source : Quarterly Bulletin Second Quarter 2011, Bank Negara Malaysia) The Malaysian property market continued to be encouraging in tandem with the positive growth of economy. First half of 2011 registered, against the first half and second half of 2010 respectively, double digit growth in both volume and value of transactions. In terms of market activity, all subsectors registered improved performance compared to the corresponding half year of 2010 and the preceding half-year. (Source : Property Market Report First Half 2011, Valuation and Property Department (JPPH) of Ministry of Finance) UOA, in view of the above, is optimistic about the prospects of the Land. 10. APPROVALS REQUIRED Save for items disclosed in section 2.2, the Acquisition is not subject to UOA shareholders or relevant government authorities approval. The highest percentage ratio applicable to the transaction pursuant to paragraph 10.02(g) of the Bursa Malaysia Securities Berhad Main Market Listing Requirements is 4.77%. 11. DIRECTORS AND MAJOR SHAREHOLDERS INTERESTS The Board of Directors is not aware of any Directors or major shareholders of UOA or persons connected to them that have any interest, directly or indirectly, in the Acquisition.

5 12. DIRECTORS STATEMENT The Board of UOA having considered the rationale and all aspects of the Acquisition, and after careful deliberation, is of the opinion that the Acquisition is in the best interest of UOA and its shareholders. 13. ESTIMATED TIME FRAME FOR COMPLETION Barring any unforeseen circumstances, the Acquisition is expected to complete in the first quarter of year DOCUMENTS AVAILABLE FOR INSPECTION The Agreement will be available for inspection at the principal place of business of UOA at Wisma UOA Bangsar South, Tower 1, Avenue 3, Bangsar South, No.8, Jalan Kerinchi, Kuala Lumpur during business hours from Monday to Friday (save for public holidays) for a period of three (3) months from the date of this announcement. This announcement is dated 11 October 2011.