2. DETAILS OF THE ACQUISITION. 2.1 Details of the property.

Transcription

1 RELATED PARTY TRANSACTION. ACQUISITION OF LANDED PROPERTY BY MY SQUARES DEVELOPMENT SDN BHD ( D)( THE PURCHASER ), A 51% SUBSIDIARY OF MINHO (M) BERHAD ( H) FROM A RELATED PARTIES, NG KIM KEE & SONS SDN BHD (59657-D) ( THE VENDOR ) AND MH LUMBER SDN BHD ( H)( THE PROPRIETOR ). 1. INTRODUCTION The Board of Directors of Minho (M) Berhad ( H) (hereinafter referred as MINHO or the Company ), wishes to announce to the Bursa that its 51% owned subsidiary, My Squares Development Sdn Bhd ( D) ( the Purchaser )(hereinafter referred as MSD ) had on 21 March 2013 entered into a Sale and Purchase Agreement ( SPA ) with a Related Parties, Ng Kim Kee & Sons Sdn Bhd (59657-D)( the Vendor ) (hereinafter referred as NKKS ) and MH Lumber Sdn Bhd ( H)( the Proprietor ) (hereinafter referred as MHL ) to acquire one plot of freehold vacant land at Lot No. 1698, GM 5401, Mukim of Kapar, Daerah Klang, Selangor Darul Ehsan for a total consideration of RM2,500,000.00, subject to the terms and conditions as stipulated in the SPA. 2. DETAILS OF THE ACQUISITION 2.1 Details of the property. The freehold vacant land with residential status measuring approximately square metres ( hereinafter referred to as the said Property ) is held under Lot 1698, Mukim of Kapar, Daerah Klang, Negeri Selangor Darul Ehsan. MHL is the registered proprietor of the said Property and MHL has via a sale and purchase agreement dated sold the said Property to NKKS. The said Property has not been transferred to NKKS as yet and MHL agrees to the sale of the said Property by NKKS to MSD and shall undertake to execute all the relevant forms and documents in respect of the transfer of the said Property to MSD. NKKS in its capacity as the Beneficial Owner of the said Property is desirous of selling and MSD is desirous of purchasing the said Property with vacant possession on an as is where basis free from encumbrances. At the moment, the said Property is encumbered by a registrar s caveat vide Presentation No. 1480/2007 dated (hereinafter referred to as the said Registrar s Caveat ) MHL has undertake at its own cost to procure the withdrawal of the said Registrar s Caveat and agrees to commence with steps to remove the said Registrar s Caveat immediately. 1

2 The net book value of the Property based on the latest audited financial statement as at 31 July 2012 of NKKS was RM1,200, Background Information on MSD, NKKS and MHL MSD is a private limited company incorporated in Malaysia with an authorized share capital of RM1,000, comprising of RM1,000,000 ordinary shares of RM1.00 each of which 1,000,000 ordinary shares had been fully issued and paid-up. Currently, 51% of MSD issued shares is owned by MINHO while the balance 49% is owned by Pembinaan Infra E&J Sdn Bhd (E&J). Its registered office is at 31A, Jalan Satu Kaw. 16, Berkerley Town Centre, Klang, Selangor Darul Ehsan. The principal activity of MSD is property development NKKS is a private limited company incorporated in Malaysia with an authorized share capital of RM300, comprising of RM300,000 ordinary shares of RM1.00 each of which 128,002 ordinary shares had been fully issued and paid-up. Its registered office is at 31A, Jalan Satu Kaw. 16, Berkerley Town Centre, Klang, Selangor Darul Ehsan. The Principal nature of business carried on by NKKS is investment holding company. The Shareholders of NKKS is as follow:- No Shareholders Amount (RM) 1 Ng Hoe Beng 25, Ng Hoe Chang 25, Ng Ho Liat 25, Ng Hoe Heng 25, Mdm. Tan Kim (f) 25, Total 128, MHL is a private limited company incorporated in Malaysia with an authorized share capital of RM10,000, comprising of RM10,000,000 ordinary shares of RM1.00 each of which 7,200,000 ordinary shares had been fully issued and paid-up. Its registered office is at 31A, Jalan Satu Kaw. 16, Berkerley Town Centre, Klang, Selangor Darul Ehsan. The Principal nature of business carried on by MHL is property development. The Shareholders of MHL is as follow:- No Shareholders Amount (RM) 1 Phua Pey Yan (f) 100, Minho Holdings Sdn Bhd 3,700, Precorp Sdn Bhd 1,100,

3 4 Ablelink Properties (M) Sdn Bhd 1,200, Minho Kilning (Klang) Sdn Bhd 1,100, Total 7,200, Basis of arriving at the Purchase Consideration. The purchase consideration of RM2,500, (i.e approximately RM439 / square metres) was arrived at on a willing buyer willing seller basis after taken into account the latest valuation report of the said Property which was valued at RM2, , which represent 3.85% discount. The valuation of the said Property was carried out by an independent valuer, i.e Messrs C H Williams Talhar & Wong on 6 December 2012 and the valuation report was dated 10 January The said Property was valued using the Comparison Method. The Comparison Method entails analyzing recent transactions and asking prices of similar properties in and around the locality for comparison purposes with adjustments made for any differences in terms of location, accessibility, terrain, size and shape of the land, tenure, title restrictions if any and other relevant characteristics to arrive at the market value. Transactions of residential land / detached plot within the immediate localities are as follows :- Address PT 1646 & PT 1647 Lrg. Kampar, Off Jln Bukit Kuda. 4088, Lrg. Kalabu, Off Jln. Batu Tiga Lama. Land Area (Sq Metres) Considerati on Per Sq Metres Date 959 RM400,000/- RM417/- 18/4/ RM300,000/- RM721/- 21/9/1 2 Remarks Leasehold tenure. Freehold tenure. The purchase consideration shall be financed from internally generated funds. 2.4 Salient Features of the SPA The said Property is currently a vacant land but is encumbered by a registrar s caveat vide Presentation No. 1480/2007 dated 7 May MHL has undertake to procure the withdrawal of the said Registrar s Caveat within 12 months from the date of the SPA. 3

4 A Power of Attorney in favour of MSD shall be executed between MSD and MHL for the submission of documents to the relevant authorities which may include but not limited to applications for planning approvals and the subdivision of the title on the date of the SPA. The Purchase Consideration shall be satisfied by way of the deposit sum RM250, paid by MSD to NKKS. The balance purchase consideration of RM2,250, shall be paid by MSD to NKKS via settlement of one unit of semi-detached light industrial factory unit known as Lot 1 My Squares Business Hub Kapar Selangor belonging to MSD within 4 calendar months from the date of the SPA. NKKS shall deliver vacant possession of the said Property to MSD within 2 working days of receipt of the credit note for the contra unit evidencing settlement of the balance purchase consideration. The risk of the said Property shall continue to rest with NKKS until delivery of the possession thereof. In the event the transfer of the said Property in favour of MSD free from all encumbrances cannot be registered due to any reason whatsoever not due to the default of either party or act which is remediable by NKKS or MSD :- (a) upon written request by MSD, NKKS shall at its own costs and expenses do all that as may be reasonably necessary within its capacity to effect the registration of the transfer of the said Property free from encumbrances to the MSD and in the event NKKS shall fail or is unable to perfect to the registration by MSD then NKKS shall give MSD notice of the same, whereupon NKKS shall within 14 days thereof refund to MSD all monies paid free of interest by MSD subject to NKKS s interest in the said Property remains intact. (b) In exchange for the payment made by NKKS pursuant to the above, MSD shall return/redeliver to NKKS :- (i) Possession of the said Property (if procession has been delivered to MSD) ; (ii) Duly executed withdrawal of caveat ( if MSD had lodged any caveat over the said Property) together with the cost and expenses for the withdrawal; and 4

5 (iii) The original title of the said Property ( if the same had been delivered to MSD) together with all documents and monies delivered to MSD or the MSD s Solicitor. The SPA shall become unconditional upon the removal of the Registrar s caveat by MHL and MHL shall procure the said removal within 12 months from the SPA date. 2.5 Risk Factors. The acquisition does not change the current risk profile and has no major effect on the current cash flow of MINHO, MSD or the Group. 2.6 Approval. Pursuant to Chapter 10 of the Main Market Listing Requirements of Bursa Malaysia Securities Berhad, the acquisition is not subject to the approval of shareholders of MINHO nor from any relevant government authorities. 2.7 The highest percentage ratio. The highest percentage ratio applicable to the acquisition pursuant to paragraph 10.02(g) of the Main Market Listing Requirements of Bursa Malaysia Securities Berhad is 1%. 3. RATIONALE FOR THE ACQUISITION MSD, being a developer as its principal business activity, is planning to develop the acquired land with 2 units of semi-detached house and 7 units of zero lot bungalow ( Project ). The other major shareholders of MSD, i.e E&J, is an established contractor with a main focus in building and infrastructure. MSD will appoint E&J as the main contractor for the Project. The additional details of the Project are as follow:- (i) Propose residential development comprises 2 units of semi-detached house and 7 units of zero lot bungalow with estimated gross development value of RM22.2 Million ; 5

6 (ii) The estimated total development costs is RM15.2 Million ; (iii) The expected commencement date is September 2013 and expected completion date of the development is September 2015 ; (iv) (v) (vi) The expected profit before tax to be derived is approximately RM4.5 Million ; The project will be finance by internal generated fund ; and As at to date, no relevant approvals for the development have been obtained. 4. FINANCIAL EFFECTS ON THE ACQUISITION 4.1 Share Capital and Substantial Shareholder The acquisition will not have any effect on MINHO s share capital and its substantial shareholdings as the acquisition do not involve any issuance of new shares in the Company. 4.2 Net Assets and Gearing The acquisition is not expected to have any material impact on the net assets and gearing of the MINHO group. 4.3 Earnings The acquisition is not expected to have any material impact on the earnings of MINHO group for the financial year ending 31 December However, the acquisition will contribute positively to the Group s future earnings prospect if MSD managed to successfully develop the said Property with the Project. 5. ESTIMATED TIME FRAME FOR COMPLETION Barring unforeseen circumstances, the acquisition is expected to be completed within six (6) months from the date of the SPA. 6. PARTICULARS OF ALL LIABILITIES, INCLUDING CONTIGENT LIABILITIES TO BE ASSUMED BY THE COMPANY ARISING FROM THE AFORESAID ACQUISITION 6

7 Save for payment of the Purchase Price and other customary payments under the SPA, there are no other liabilities including contingent liabilities to be assumed by the MINHO group, arising from the acquisition. 7. THE NATURE AND EXTENT OF THE INTERESTS OF THE INTERESTED DIRECTORS AND/OR MAJOR SHAREHOLDERS. MHL is a 52% owned subsidiary of MHSB and MHSB is also the major shareholder of MINHO with direct shareholdings of 29.39%. MSD is 51% owned by MINHO. NKKS is a substantial shareholders of MHSB and MHSB is also the major shareholder of MINHO with direct shareholdings of 29.39%. MSD is 51% owned by MINHO. Dato Loo Keng An is the Director and major shareholder of MHSB and also the Managing Director of MINHO. Mr. Loo Say Leng is the Director and major shareholder of MHSB and also the Executive Director of MINHO. Mr. Ng Hoe Chang is the Director and major shareholder of MHSB and NKKS and also the Executive Director of MINHO. Mr. Yap Leong Seng is the Director of MHSB and also the Executive Director of MINHO. Except for the above, none of the Directors and/or substantial/major shareholders of MINHO or any persons connected to them have any direct or indirect interest in the acquisition. 8. DEPARTURE FROM THE SECURITIES COMMISSION S POLICIES AND GUIDELINES ON ISSUE OF SECURITIES. To the best knowledge of the Board of Directors of MINHO, the acquisition has not departed from the Securities Commission s Policies and Guidelines on Issue of Securities. 9. STATEMENT BY AUDIT COMMITTEE. The Audit Committee of MINHO, after taking into consideration all aspects of the related party transaction described above, is of the opinion that the related party transaction is fair, reasonable and on normal commercial 7

8 terms, are in the best interest of the Company and is not detrimental to the interest of the minority shareholders and therefore had recommended it to the Board of Directors for approval. 10. DIRECTORS OPINION. The Board of Directors (save for Dato Loo Keng An, Mr. Loo Say Leng, Mr. Yap Leong Seng and Mr. Ng Hoe Chang who abstained from deliberation and decision), after taking into consideration all aspects of the related party transaction is of the opinion that the acquisition is fair, reasonable and on normal commercial terms, is in the best interest of the Company and is not detrimental to the interest of the minority shareholders. 11. DOCUMENTS FOR INSPECTION. The documents pertaining to the acquisition will be made available for inspection at the registered office of MINHO at 31A, Jalan Satu, Kaw. 16, Berkeley Town Centre, Klang, Selangor Darul Ehsan during normal business hours for the period of three (3) months from the date of this announcement. This announcement is dated 22 March