TRANSACTIONS (CHAPTER 10 OF LISTING REQUIREMENTS): NON RELATED PARTY TRANSACTIONS

Transcription

1 TRANSACTIONS (CHAPTER 10 OF LISTING REQUIREMENTS): NON RELATED PARTY TRANSACTIONS VERSATILE CREATIVE BERHAD ( VCB OR THE COMPANY ) PROPOSED DISPOSAL OF ALL THAT PIECE OF FACTORY HELD UNDER INDIVIDUAL TITLE NO. HS(D) PT 71174, PEKAN KAJANG, DISTRICT OF ULU LANGAT IN THE STATE OF SELANGOR BEARING POSTAL ADDRESS OF NO. 5, JALAN TERAS 4, TAMAN INDUSTRI SELESA JAYA, BALAKONG, SELANGOR TO ERA PRESTIJ DEVELOPMENT SDN BHD ( PURCHASER ) BY FAIRPOINT PLASTIC INDUSTRIES SDN BHD ( FPI ), A WHOLLY- OWNED SUB-SUBSIDIARY OF THE COMPANY, FOR A TOTAL CASH CONSIDERATION OF RM12,000, ONLY SUBJECT TO 6% GOODS AND SERVICES TAX ( 6% GST ) 1 INTRODUCTION The Board of Directors of VCB ( Board ) wishes to announce that FPI, a wholly-owned sub-subsidiary of VCB, has on 10 July 2015 entered into a Sale and Purchase Agreement ( SPA ) with Era Prestij Development Sdn Bhd for the disposal of a two single storey detached factories each with an annexed double storey office buildings and ancillary buildings erected on a piece of freehold land held under individual title HS(D) at Lot No. PT 71174, Pekan Kajang, District of Ulu Langat and State of Selangor Darul Ehsan measuring approximately 5,646 square metres (collectively referred to as the Property ) free from all encumbrances on an as is where is basis for a total consideration of RM12,000, only subject to 6% GST ( Disposal Consideration ), to be paid in the manner stated in the SPA and subject to all other terms and conditions as stipulated in the SPA and/or such terms and conditions as shall be mutually agreed upon ( Proposed Disposal ). Upon the completion of the Proposed Disposal, a Tenancy Agreement shall be entered into between FPI and the Purchaser wherein the FPI shall rent the Property from the Purchaser at a monthly rental rate of RM50, and through its Solicitors shall prior to the release of the Balance Purchase Price to FPI attend to the following:- a) Retain from the Balance Disposal Price (as stated under Section 1.5(II) of this announcement) the deposits as referred to under the Tenancy Agreement in respect of the Property, amounting to RM115, only and forward the same to the Purchaser being the two (2) months security deposit and RM15,000 utility deposit; b) Retain from the Balance Purchase Price the Rental apportionment for the month as provided in last paragraph of Section 1 of this announcement; c) Furnish all bills and receipts evidencing payment of all outstanding outgoings (up to date) in the Property. On receipt of the Balance Purchase Price by the FPI s Solicitors, FPI shall pay rental to the Purchaser for that month, duly apportioned on daily basis according to the date of the FPI s Solicitors' receipt of the Balance Purchase Price. DETAILS OF THE PROPOSED DISPOSAL 1.1 Background information on the Proposed Disposal Pursuant to the SPA, FPI has agreed to sell and Purchaser has agreed to purchase the Property free from any all encumbrances on an as is where is basis whatsoever and with vacant possession together with all the fixtures and fittings (in good working condition) but subject nevertheless to all the conditions express and/or implied in the document of title for a total cash consideration of RM12,000, only (subject to 6% GST) upon such terms and conditions contained in the SPA. Page 1 of 5

2 1.2 Information on FPI FPI was incorporated on 21 September 1985 as a private limited company under the Companies Act, It is a sub-subsidiary of VCB. The issued and paid-up share capital of FPI is RM294,158 comprising 294,158 ordinary shares of RM1.00 each. The principal activity of the FPI is manufacturing and sale of plastic products. 1.3 Information on the Purchaser Era Prestij Development Sdn Bhd ( Era Prestij ) was incorporated as a private limited company on 19 th May 2015 under the Companies Act, 1965 and has its registered address at Lot 515, Block A, Kelana Business Centre, No.97, Jalan SS7/2, Kelana Jaya, Petaling Jaya, Selangor. The current authorised share capital of Era Prestij is RM400, divided into 400,000 ordinary shares of RM1.00 each. The issued and paid-up share capital of Era Prestij is RM2.00 divided into 2 ordinary shares of RM1.00 each. The directors of Era Prestij are Aziah Binti Musa and Radijah Binti Abdul Razak. The shareholders and their shareholdings in Era Prestij are as follows:- Shareholders Name NRIC No. Number of shares held Aziah Binti Musa Radijah Binti Adbul Razak Details of the Property The details of the property are as follows: Postal address : 5, Jalan Teras 4, Taman Industri Selesa Jaya, Balakong, Selangor Description : An industrial land and two single story detached factories each with an annexed double story office building and ancillary buildings Existing use : Office building and factory Age of the building : Approximately 11 years for Office building and 18 years for factory Tenure : Freehold Land area : 5,646 square meters (60,774 square feet) Built-up area : 25,265 square feet and 28,750 square feet Category of land : Industrial Express condition : Perusahaan Restriction in interest : Nil Encumbrances : Charged to Public Bank Berhad (Company no H) Registered owner : FPI Page 2 of 5

3 Original Cost of Investment : RM4.6 million Date of Investment : Office building 19 August 2003 Factory - 31 December 1995 Net book value : RM8,210,346 (based on the audited consolidated financial statements of VCB as at 31 st March 2014) 1.5 Basis of arriving at and justification for the Disposal Consideration The Disposal Consideration was arrived at on a willing-buyer willing-seller basis, after taking into consideration the market value of the Property of RM8,500, as appraised by TD Aziz Sdn Bhd, an independent registered valuer appointed by the Company, on 1 st October 2013 using the land and building comparison method. The Disposal Consideration is justifiable after taking into consideration that the valuation of the Property is done on year 2013 and comparison made on recent transaction of similar property or properties listed for sale within the same location or other comparable localities. 1.6 Salient terms and conditions of the SPA The salient terms and conditions of the SPA are set out as below: I. The Property together with all fixtures and fittings will be disposed on an as-is where-is basis free from all encumbrances, liens, easements, charges, caveats, right of way, squatter and land acquisition or any forfeiture proceedings. II. The Disposal Consideration shall be paid by Era Prestij in the following manner : An earnest deposit of RM240, (subject to 6% GST) has been paid to FPI s solicitors before executing the SPA; A balance deposit of RM960, (subject to 6% GST) has paid to FPI s solicitors upon execution of the SPA; and The balance consideration of RM10,800, (subject to 6% GST) ( Balance Disposal Consideration ) shall be paid to FPI s solicitors within 90 days from the date of the SPA subject to an automatic extension of time on the settlement for another 30 days with an interest for late payment of 8% per annum on the outstanding balance. III. Upon the receipt of the full payment of the Balance Disposal Consideration together with all interests accrued (if any), the legal possession of the Property shall be delivered by FPI to Era Prestij immediately. 1.7 Liabilities to be assumed There are no liabilities to be assumed by Era Prestij pursuant to the Proposed Disposal. 1.8 Gain on disposal Based on the cash consideration, the estimated gain on Proposed Disposal is approximately RM3,089,654 (after estimated expenses for proposed disposal) based on the net book value of RM8,210,346 (as per the audited consolidated financial statements of VCB as at 31 st March 2014). 2 RATIONALE AND BENEFIT FOR THE PROPOSED DISPOSAL The Proposed Disposal enables FPI to unlock its non-productive assets and redeploy the funds in investing new machineries to increase its production capacity in its core business. Page 3 of 5

4 The Board is confident that the Proposed Disposal is timely with the Group s strategy to improve its gearing position and generate additional working capital. 3 PROPOSED UTILISATION OF PROCEEDS FROM THE PROPOSED DISPOSAL The Disposal Consideration of RM12,000,000 is expected to be utilised within twelve (12) months from the date of completion of the Proposed Disposal in the following manner: Details of Utilisation Investment in property, plant and equipment Repayment of bank borrowing Working capital Estimated expenses for proposed disposal Estimated amount 2,500 4,000 4, Total 12,000 Note: Any excess or shortfall from the above utilisation shall be adjusted through the working capital. 4 EFFECTS OF THE PROPOSED DISPOSAL 4.1 Share capital and substantial shareholders shareholding The Proposed Disposal will not have any effect on the issued and paid-up capital and substantial shareholders shareholding of VCB as the Disposal Consideration is satisfied in cash. 4.2 Net assets per share The Proposed Disposal will result in a gain of approximately RM3.09 million (after estimated expenses for Proposed Dsisposal) for the financial year ending 31 st March 2016 which translates to earning per share of approximately 2.6 sen per share. (As at 10 July 2015, VCB s total issued and paid up capital is 117,338,681 ordinary shares of RM0.50 each). 4.3 Net assets ( NA ) per share and gearing The pro forma effects of the Proposed Disposal on the NA and gearing of VCB Group based on the latest audited consolidated financial statements of VCB as at 31 st March 2014 are set out below: Page 4 of 5 Audited as at After the Proposed 31 st March 2014 Disposal Share capital 110,643 58,669 Non-distributable reserves 54,067 55,400 Retained losses (65,338) (6,926) Shareholders equity / NA 99, ,143 Number of ordinary shares in issue ( 000) 110, ,340 NA per share (RM) Total borrowings 29,222 25,222 Gearing ratio (times) Notes: (i) After taking into consideration the estimated gain of RM3.09 million (after estimated expenses for proposed Disposal) arising from the Proposed Disposal;

5 (ii) Assuming that only RM4.0 million is utilised for repayment of bank borrowings; (iii) After taking into consideration the reduction issued and paid up of Company pursuant to Section 64 of the Companies Act, 1965 in Malaysia, involving the cancellation of RM0.50 of the par value of each ordinary shares of RM1.00 each in the Company; (iv) After taking into consideration the issuance of 6,695,600 new VCB shares being the first and second tranche of Private Placement at RM0.72 per placement share. 5 APPROVALS REQUIRED The Proposed Disposal is not subject to the approval of the shareholders of VCB nor any other relevant government authorities. 6 ESTIMATED TIMEFRAME FOR COMPLETION OF THE PROPOSED DISPOSAL The Proposed Disposal is expected to be completed by the fourth quarter of HIGHEST PERCENTAGE RATIO APPLICABLE TO THE PROPOSED DISPOSAL PURSUANT TO PARAGRAPH 10.02(g) OF THE MAIN MARKET LISTING REQUIREMENTS OF BURSA MALAYSIA SECURITIES BERHAD ( MMLR ) The highest percentage ratio applicable to the Proposed Disposal based on the audited financial statements for the financial year ended 31 March 2014 is 12.08%. 8. INTERESTS OF DIRECTORS, MAJOR SHAREHOLDERS AND/OR PERSONS CONNECTED WITH THEM None of the Directors or major shareholders of VCB or persons connected to them have any interest, direct or indirect, in the Proposed Disposal. 9. STATEMENT BY THE BOARD OF THE COMPANY The Board having considered the Proposed Disposal, is of the opinion that the Proposed Disposal is in the best interest of the Group and its shareholders. 10. DOCUMENTS AVAILABLE FOR INSPECTION The SPA and the Valuation Report are available for inspection at the Registered Office of VCB during normal office hours from Monday to Friday (except public holidays) for a period of three (3) months from the date of this announcement. This announcement is dated 10 July 2015 Page 5 of 5