The details of the four parcels of land ( the Property ), the vendors and the Purchase Prices are set out in Appendix A.

Transcription

1 HUA YANG BERHAD ( HUAYANG or the Company ) -Proposed acquisition of Freehold Land in the State of Johor by subsidiary, Grandeur Park Sdn Bhd 1. INTRODUCTION The Board of Directors of HUAYANG wishes to announce that the wholly-owned subsidiary of the Company, Grandeur Park Sdn Bhd (GPSB) had today entered into a conditional sale and purchase agreement ( SPA ) for the purpose of acquiring a parcel of freehold land with an abandoned wooden building in the State of Johor ( 4 th Land Parcel ). GPSB had earlier in 2011 acquired three parcels of adjoining land and in accordance with the Main Market Listing Requirement s Rule on Aggregation, with the acquisition of this 4 th Land Parcel, an announcement of the abovementioned transactions is now to be made as the transaction ratio has exceeded 5% (the Proposed Acquisition ). 2. THE PROPOSED ACQUISITIONS 2.1 Details of the Proposed Acquisition The details of the four parcels of land ( the Property ), the vendors and the Purchase Prices are set out in Appendix A. The Property is located along Jalan Abdul Samad in the city of Johor Bahru under the jurisdiction of Majlis Bandaraya Johor Bahru and is surrounded by developed and matured residential area. To the south-west of the Property is the Thistle Hotel. The Property enjoys 60 ft of road frontage onto Jalan Abdul Samad which is currently being upgraded to include an elevated section which joins up to the Coastal Highway, cutting through Danga Bay and leading to Nusajaya. 2.2 Salient terms of the SPA The purchase of the earlier three parcels of adjoining land has been completed. The salient terms of the SPA for the Proposed Acquisition of the 4 th Land Parcel are: Mode of payment of Deposit The Deposit of 10% of the purchase price of RM986, ( Purchase Price ) shall be paid by GPSB to the Vendor in the following mode and manner: (a) (b) a sum of RM19, being 2% of the Purchase Price has been paid by GPSB to the Vendor s Solicitors prior to execution hereof, as earnest money; a sum of RM19, being 2% of the Purchase Price shall be retained and paid over by GPSB to the Director General of Inland Revenue; and

2 (c) the remaining sum of RM59, shall be paid by GPSB to the Vendor s Solicitors who are empowered to pay to the Vendor upon the SPA becoming unconditional and the Vendor executing the transfer documents Conditional Contract (a) (b) (c) The SPA is conditional upon the Vendor becoming the registered proprietor of the Property within three (3) months from the date of the SPA ( the Condition Period ). If the Property has not been registered in the name of the Vendor within the Condition Period, the Vendor shall grant to GPSB an extension of time of a period of one (1) month to become the registered proprietor of the Property ( the Extended Condition Period ), and in the event that the Property is still not registered in the name of the Vendor within the Extended Condition Period, GPSB shall be entitled to treat this Agreement as no longer binding on GPSB whereupon GPSB shall withdraw the private caveat if lodged by GPSB pursuant to clause 10 hereof, and the Vendor shall immediately refund the Deposit to the Purchaser. The SPA shall be rendered unconditional on the Effective Date, which is the date when a certified true copy of the issue document of title registered in the name of the Vendor has been received by GPSB or the Purchaser s Solicitors, within the Condition Period or within the Extended Condition Period Payment of Balance Purchase Price The balance of the Purchase Price in the sum of RM887, only shall be paid by GPSB to the Vendor s Solicitors and the purchase shall be completed at the office of the Vendor s Solicitors, within three (3) months from the Effective Date ( the Completion Date ). 2.3 Basis of arriving at the Purchase Price The Purchase Price was arrived at based on a willing buyer willing seller basis after taking into consideration the development potential of the Property and also making comparisons with the market value of the matured properties surrounding the Property. No formal valuation was commissioned as the Board views that the market comparisons suffice for this purpose.

3 2.4 Source of funding and mode of satisfaction The Purchase Price for the 4 th Land Parcel will be funded through internally generated funds. 2.5 Liabilities There is no liabilities to be assumed by the HUAYANG Group on the Proposed Acquisition of the Property. 3. RATIONALE OF THE PROPOSED ACQUISITION The Proposed Acquisition is in line with the HUAYANG Group s objective to expand it presence in Johor, having successfully developed the Taman Pulai Indah township. This will also increase the Group s land bank at strategic locations for its future property development projects. The Property will be used for the development of 415 units of service apartment with total Gross Development Value of RM112 million However, it is currently too preliminary to ascertain the total development cost, the expected commencement date of the development and the expected profits to be derived from the development of the Property. 4. EFFECTS OF THE PROPOSED ACQUISITION The effects of the Proposed Acquisition are as follows: Share capital and substantial shareholders shareholdings The Proposed Acquisition will not have any effect on the issued and paid-up share capital and substantial shareholders shareholdings of the Company as the Proposed Acquisition does not involve any issuance of shares of HUAYANG. Net assets per share and earnings per share The Proposed Acquisition is expected to increase the net assets per share of HUAYANG Group to the extent of the value of the Property to be taken into account. Barring any unforeseen circumstances, the Proposed Acquisition is expected to contribute positively to the future earnings of HUAYANG Group. Gearing As the Purchase Price is to be satisfied by internally generated funds, there would be no effect to the gearing of the Group.

4 5. PROSPECT As HUAYANG Group s core business is in property development and with an existing Branch operation in Johor for the established township development project known as Taman Pulai Indah, the Proposed Acquisition will further enhance our on-going operations and also add new product ranges to complement the current offerings. Further, the growth and development of Johor Bahru City is expected to have a positive effect on the Group s developments. 6. RISK FACTORS HUAYANG Group s core business is in the property development sector, the Proposed Acquisition will not materially change the risks of the Company s business as the Group would still be exposed to the same business, operational, financial and investment risk inherent in the property sector. These risks are inherent risk due to timely commencement or completion of projects, obtaining required approvals, satisfactory performance of contractors and adverse economic events or recession. In addition, any material escalation of cost of cement and other building materials as well as increase in petrol prices may contribute to a higher overall development cost thereby impacting the profit margins of any development project. The Management shall endeavour to limit the abovementioned risks through, inter-alia, careful planning and identification of the type of developments, innovative pricing strategies, more prudent financial policy, a close supervision on any property development project and effective management. 7. APPROVALS REQUIRED The Proposed Acquisition is not subject to the approval of shareholders. 8. ESTIMATED TIME FRAME FOR THE COMPLETION Barring any unforeseen circumstances, the Board of HUAYANG expects the Proposed Acquisition to be completed by June HIGHEST PERCENTAGE RATIO APPLICABLE The highest percentage ratio applicable to the aggregated transaction is 5.29%. 10. INTEREST OF DIRECTORS, MAJOR SHAREHOLDERS AND / OR PERSONS CONNECTED TO THEM None of the directors, major shareholders of HUAYANG and/or persons connected to them has any interest, direct or indirect in the Proposed Acquisition.

5 11. DIRECTORS RECOMMENDATION The Board, having considered all aspects of the Proposed Acquisition, is of the opinion that the Proposed Acquisition is in the best interest of the HUAYANG Group. 12. DOCUMENTS FOR INSPECTION The SPA dated 9 February 2012 is available for inspection at HUAYANG s registered office at 123A, Jalan Raja Permaisuri Bainun (Jalan Kampar), Ipoh, Perak Darul Ridzuan during normal office hours from Monday to Friday (except public holidays) for a period of three months. This announcement is dated 9 February 2012.

6 APPENDIX A Title Area Description and Existing Use H.S.(D) , PTB Bandar and District of Johor Bahru) H.S.(D) , PTB Bandar and District of Johor Bahru hectares ( acres) hectares ( acres) Freehold land Vacant Freehold land Vacant Vendor TCC Enterprise Sdn Bhd TCC Enterprise Sdn Bhd Date of Sale & Purchase Agreement Purchase Price 24/02/2011 RM9,500,000 Other info The Vendor has not provided any information on the net book value of the Land. Geran Lot 1430 Bandar and District of Johor Bahru; and hectares ( acres) Freehold land with abandoned wooden building Raja Azizah Binti Idris, as the personal representative of the Estate of Raja Idris Bin Mohamed Aris, Deceased 17/03/2011 RM1,200,000 The Vendor has not provided any information on the net book value of the Land. Geran Lot 1429 Bandar and District of Johor Bahru sq. metre (0.313 acres) Freehold land with abandoned wooden building Raja Yaa cob Bin Raja Ahmad 9 February 2012 RM986,000 The Vendor has not provided any information on the net book value of the Land.