TUAN SING HOLDINGS LIMITED (Registration No M)

Transcription

1 PROPOSED ACQUISITION OF LAND IN BATAM THROUGH PURCHASE OF SHARES IN TWO INTERMEDIATE HOLDING ENTITIES - INTERESTED PERSON TRANSACTION 1. INTRODUCTION The Board of Directors of Tuan Sing Holdings Limited (the Company or Group ) wishes to announce that the Company has on 8 June 2016 entered into a Share Purchase Agreement ( SPA ) with Habitat Properties Pte Ltd (the Vendor ) pursuant to which the Vendor has agreed to sell, and the Company has agreed to acquire from the Vendor, 900,000 ordinary shares in Goodworth Investments Pte Ltd ( GIPL ) and 90,000 ordinary shares in Splendourland Pte Ltd ( SPL ) (the Sale Shares ), representing 90% of the total issued share capital of GIPL and SPL (collectively the Singapore SPVs ) and certain shareholders advances extended by the Vendor to the Singapore SPVs for an aggregate consideration of S$39.15 million (the Purchase Consideration ) (the Transaction ). The Singapore SPVs are private companies limited by shares incorporated in Singapore. GIPL has an issued and paid up share capital of S$1,000,000 comprising 1,000,000 ordinary shares. SPL has an issued and paid up share capital of S$100,000 comprising 100,000 ordinary shares. GIPL and SPL legally and beneficially hold 98% and 2% of the entire issued share capital of PT Goodworth Investments respectively ( PTGI ). PTGI is a company incorporated in Indonesia with an issued and paid up capital of Indonesian Rupiah 47,450,000,000 divided into 50,000 ordinary shares. PTGI is the legal and beneficial owner of four plots of land (the subject site ) measuring approximately 85 hectares, which includes 1.5 hectares zoned under Green Zone (Protected Forested Area), located in Marina City in Batam, Indonesia, approximately 20km and about 45 minutes ferry ride from Singapore Harbourfront Centre. The subject site is conveniently located next to the Waterfront ferry terminal where the immigration and custom clearance are already operational. On completion of the Transaction, the Company intends to over the years develop the subject site into an integrated mixed development township, comprising hotels with MICE facilities, retail, tourist facilities and attraction as well as residential properties (the Batam Marina City Project ); the Singapore SPVs and PTGI will also become

2 90%-held subsidiaries of the Company. The remaining 10% will continue to be held by the Vendor. The Transaction is an interested person transaction, as elaborated in Section 4 below. 2. SALIENT TERMS OF THE TRANSACTION The key terms of the Transaction are as follows (a) Conditions Precedent There are a number of Conditions Precedent ( Conditions Precedent ) to be satisfied by the Vendor. Chief amongst which, PTGI having obtained the land titles for all the plots on the land (except for the 1.5 hectares Green Zone in one of the plots of land if it is designated by the Indonesian Ministry of Environment and Forestry as a forest reserve) to be evidenced by land certificates (Hak Guna Bangunan) to be issued by the Indonesian National Land Agency (Badan Pertanahan Nasional). Completion of the Transaction shall take place on the tenth business day after the date on which the last of the conditions precedents in the SPA is satisfied or waived by the Company, or such other day and time as the Company and the Vendor may agree in writing (the Completion Date ). The Vendor shall satisfy all the conditions precedents as soon as is possible and in any event by no later than 5.00 p.m. (Singapore time) 12 months from date of agreement (or such other date as the Company and the Vendor may agree in writing) ( Long Stop Date ). (b) Purchase Consideration The Purchase Consideration was reached between the Company and the Vendor on a willing-buyer willing-seller basis basing on 90% of the net book value of the SPVs, adjusted by the valuation of the subject site at S$43.5 million. For the purpose, the Company has taken due cognizance of the opinion of two valuers appointed by the Company. KJPP Sarwono, Indrastuti & Rekan, a public valuer registered in Indonesia, in its valuation report dated 1 February 2016, valued the plots of land at Indonesian Rupiah billion (approximately S$45 million using an exchange rate of 1:9, as of 1 February 2016). The other valuer, KJPP Hendra Gunawan dan Rekan, a public valuer registered in Indonesia, valued the land at Indonesian Rupiah billion (approximately S$41.77 million using an exchange rate of 1:9, as of 2 June 2016). 2

3 On the date of the SPA, the Company has paid an initial deposit of S$7,830,000 to the Vendor, equivalent to 20% of the Purchase Consideration (the First Deposit ). Within three business days after the Vendor gives the Company sight of the originals, and furnishes to the Company a certified true copy, of both of the following documents in relation to the plot of land next to the ferry terminal: a) Agreement for the Allocation, Utilization, and Arrangement of Certain Parts of Land Under Rights to Manage of the Batam Indonesia Free Zone Authority (Surat Perjanjian Pengalokasian, Penggunaan, dan Pengurusan Tanah Atas Bagian-Bagian Tertentu Dari Pada Tanah Hak Pengelolaan Badan Pengusahaan Batam) ( SPJ ); and b) Decree of the Allocation and Utilization of Certain Parts of Land Under Rights to Manage of the Batam Indonesia Free Zone Authority (Keputusan Pengalokasian dan Penggunaan Tanah Atas Bagian-Bagian Tertentu Dari Pada Tanah Hak Pengelolaan Badan Pengusahaan Kawasan Perdagangan Bebas dan Pelabuhan Bebas Batam) ( SKEP ), an additional sum of deposit of S$3,915,000 is payable (collectively with the First Deposit, the Deposits ). The payment of the Purchase Consideration in tranches, including payment of the Deposits, was agreed on a willing buyer willing seller basis taking into account, inter alia, market practice for deposit payments and that the obtaining of the SPJ and SKEP for such plot of land are the key prerequisites for the obtaining of the land certificates (Hak Guna Bangunan). The Deposits are refundable by the Vendor to the Company if any Conditions Precedent are not satisfied on or before the Long Stop Date. On Completion Date, the Purchase Consideration shall be satisfied by the Company through the Deposits already paid, payment of S$11,310,000 in cash ( Cash Consideration ) and the transfer of title and ownership of 3 residential units at Cluny Park Residence (the Units ) to the Vendor and/or its nominee(s) valued at S$16,095,000. For the purpose of valuation of the Units, Colliers International Valuation and Consultancy Pte Ltd ( Colliers ) was retained by the Company. In Colliers valuation report dated 20 May 2016, the Units have a collective fair value of S$16 million. For the purpose of the transfer of the Units, the Company will procure its wholly-owned subsidiary, Shelford Properties Pte Ltd ( Shelford Properties ), the developer of the Units, to execute a conveyance of each Unit to the Vendor and/or its nominee(s), provided that if the Completion Date occurs before the date on 3

4 which Shelford Properties ceases to be licensed as a housing developer under section 4 of the Housing Developers (Control and Licensing) Act ( Housing Act ), Chapter 130 of Singapore, then the Company shall procure Shelford Properties to execute such conveyances as soon as reasonably practicable after the date on which Shelford Properties is de-licensed under the Housing Act. The Company shall fund the cash portion of the Transaction with internal cash resources. (c) Shareholders Agreements In connection with the Transaction, the Company has also on 8 June 2016 entered into two separate Shareholders Agreements with the Vendor in respect of its participation in GIPL and SPL to regulate their relationship inter se as their shareholders (the SHAs ). The SHAs are conditional upon the completion of the Transaction. Pursuant to the SHAs, as soon as is practicable after the completion of the Transaction, the Company and the Vendor shall capitalize their respective portions of the Shareholder s Advances to the Singapore SPVs as part of the equity capital of the Singapore SPVs, in the form of new shares to be issued at a subscription price determined by the respective Board of the Singapore SPVs. 3. FINANCIAL EFFECTS OF THE TRANSACTION The Transaction is not expected to have any material impact on the net tangible assets or earnings per share of the Company for the current financial year ending 31 December INTERESTED PERSON TRANSACTION Ms Michelle Liem Mei Fung ( Ms Liem ) has a 99.9% interest in the Vendor. As Ms Liem is a deemed controlling shareholder and Director of the Company, the Vendor is therefore considered an interested person for the purpose of Chapter 9 of the Listing Manual of the Singapore Exchange Securities Trading Limited (the SGX-ST ). Accordingly, the Transaction is an Interested Person Transaction falling within the ambit of Chapter 9 of the Listing Manual of SGX-ST. The Purchase Consideration of S$39.15 million when aggregated with the value of other transactions entered into by the Group for the current financial year commencing on 1 January 2016 up to the date of this announcement (excluding transactions which are less than S$100,000) with Ms Liem and her associates amounts to a total of S$39.95 million 4

5 which represents approximately 4.6 % of the Group s audited net tangible asset value of S$ million as at 31 December RATIONALE FOR THE TRANSACITON This transaction is in line with the Company s strategy to grow the Group s businesses across geographies and property segments, to have portfolio diversification and enhancement of earnings stability in the future. It is envisaged that the Batam Marina City Project presents attractive and opportune prospects for growth given the potential further development of Batam as a tourism hub. 6. AUDIT AND RISK COMMITTEE S STATEMENT Members of the Audit and Risk Committee ( ARC ), except Mr David Lee Kay Tuan who recused himself from the deliberation, have reviewed the terms of the Transaction. After having taken into consideration, inter alia, the basis for the Purchase Consideration, the rationale for the Transaction and the various valuation reports received, the ARC are of the view that the Transaction is entered into on an arm s length basis on normal commercial terms and are not prejudicial to the interests of the Company and its minority shareholders. 7. INTERESTS OF DIRECTORS Non-independent directors, namely, Mr William Nursalim alias William Liem, Ms Michelle Liem Mei Fung, Mr David Lee Kay Tuan, and Mr Ong Beng Kheong have recused themselves from the review and approval process of the Transaction. Save as disclosed, none of the other directors have any interest in the Transaction. BY ORDER OF THE BOARD Lee Pih Peng Company Secretary 8 June