OPTION TO PURCHASE THE PROPERTY AT 16 SUNGEI KADUT WAY SINGAPORE

Transcription

1 Company Registration Number: Z 49 Sungei Kadut Loop Singapore OPTION TO PURCHASE THE PROPERTY AT 16 SUNGEI KADUT WAY SINGAPORE INTRODUCTION The Board of Directors (the Board or Directors ) of (the Company and together with its subsidiaries, the Group ) wishes to announce that the Company s whollyowned subsidiary, Serrano Holdings Pte Ltd (the Purchaser ), has on 13 November 2014, been granted an option by Defu Furniture Classic Pte Ltd (the Vendor ), to purchase (the Option ) a JTC Corporation ( JTC ) property (the Property ) located at 16 Sungei Kadut Way Singapore (the Proposed ) for an aggregate consideration of S$5,136,000 (inclusive of 7.0% goods and services tax ( GST )) (the Consideration ). The Option shall remain valid up to 4.00 p.m. on 27 November The Property has a gross floor area of approximately 4,998 square meters with a leasehold tenure of 25 years commencing from 1 May CERTAIN PRINCIPAL TERMS OF THE OPTION 2.1 Consideration The Consideration was arrived at after arm s length negotiations and on a willing buyer, willingseller basis, taking into consideration, inter alia, relevant enquiries and references by the Group in relation to the current market prices of properties in the surrounding area of similar size and lease tenure. No formal valuation of the Property has been conducted. The Consideration will be funded by a combination of the net proceeds from the Company s Initial Public Offering in October 2014 on the Catalist of the Singapore Exchange Securities Trading Limited (the SGX ST ) ( IPO ) of approximately S$1.0 million allocated for investments, acquisitions, strategic alliances and/or joint ventures, and credit facilities from financial institutions. An option fee of S$51,360 (inclusive of GST) (the Option Fee ), representing 1.0% of the Consideration was paid to the Vendor on the grant of the Option. A further S$205,440 (inclusive of GST), representing 4.0% of the Consideration, is payable to the Vendor s solicitors, as stakeholders pending completion of the Proposed ( Completion ), on the exercise of the Option. The remaining 95.0% of the Consideration is payable to the Vendor or to the Vendor s solicitors as the Vendor s agent, on Completion. 2.2 Completion The Proposed is subject to, inter alia: (a) the written consent from JTC and all relevant authorities for: (i) the Vendor to sell and the Purchaser to purchase the Property being obtained; and Page 1 of 6

2 (ii) the use by the Purchaser of the Property for assembly, production, showroom, packaging, repackaging and storage of knock down furniture, office furniture and all other related products; and (b) the results of the due diligence investigations on the Property being satisfactory to or as may have been deemed to be accepted by the Purchaser. The Proposed shall be completed on 30 April 2015 or 8 weeks after receipt of written consent from JTC, whichever is later. Notwithstanding the aforesaid, if the written consent from JTC is not obtained within 16 weeks from the date of exercise of the Option not arising from any default on the part of the Purchaser or the Vendor, the Vendor shall be entitled: (a) to annul the sale and purchase herein by written notice thereof to the Purchaser and thereafter the sale and purchase herein shall become null and void and of no further effect whatsoever and all moneys (including the Option Fee) paid hereunder shall forthwith be refunded to the Purchaser but without any interest or compensation whatsoever and each party hereto shall bear their own solicitors' costs and neither party hereto shall have any claims or demand against the other for damages, costs or otherwise whatsoever in respect of this matter howsoever arising and for avoiding doubt it is hereby agreed that in such event any application to Comptroller of Goods and Services Tax for GST refund shall be made by the Purchaser at his expense; or (b) to grant such further extension of time as the Vendor may in his absolute discretion determine. For the avoidance of doubt, any term and condition imposed by the JTC including the variation of the terms of the lease between JTC and the Vendor or otherwise and/or pursuant to or in relation to the Purchaser s application for JTC s consent shall not be a ground which will entitle the Purchaser to refuse Completion. 3. RATIONALE The Property is located in the International Furniture Park, a dedicated zone by JTC. The International Furniture Park is envisioned as an epicentre for worldwide buyers and sellers, manufacturers and designers to come together to do business and steer the development of the furniture industry in Singapore. The Group intends to relocate its production facilities for its interior fit out business and showroom for furnishings products for its wholesale and retail furnishings business to the Property. This will allow the Group to utilise more space at its head office premises at 49 Sungei Kadut Loop Singapore for office and warehousing purposes. Page 2 of 6

3 4. FINANCIAL EFFECTS OF THE PURCHASE OF PROPERTY For illustrative purposes only, based on the Group s audited combined financial statements for the financial year ended 31 December 2013 ( FY2013 ), the financial effects of the Proposed are as follows: 4.1 Net tangible assets per share Assuming that the Proposed had been completed on 31 December 2013: Before the Proposed After the Proposed Net tangible assets (S$ 000) 17,027 17,027 Number of issued shares* 127,500, ,500,000 Net tangible assets per share (cents) Earnings per share Assuming that the Proposed had been completed on 1 January 2013: Before the Proposed After the Proposed ** Profit after tax attributable to equity 3,211 2,673 holders of the Company (S$ 000) Weighted average number of shares* 127,500, ,500,000 Earnings per share (cents) *Based on the pre IPO number of shares of the Company of 127,500,000 shares upon the completion of the Restructuring Exercise and the Share Split (as defined in the Company s offer document dated 15 October 2014 ( Offer Document )) **Profit after tax attributable to equity holders of the Company after the Proposed has been adjusted for depreciation and finance costs associated with the purchase of the Property over FY2013 assuming that the Proposed had been completed on 1 January Gearing Assuming that the Proposed had been completed on 31 December 2013, the Proposed would have the following impact on the gearing of the Group: Page 3 of 6

4 Before the Proposed After the Proposed Total borrowings (S$ 000) 50,095 53,935 Shareholders funds (S$ 000) 17,639 17,639 Gearing ratio (times) Gearing refers to the ratio of total borrowings to shareholders funds. Total borrowings refers to the aggregate amount of credit facilities secured from banks and financial institutions, including hire purchase and finance leases, and Shareholders funds refers to the aggregate amount of issued and paid up share capital, assets revaluation reserve and retained earnings of the Group. 5. DISCLOSEABLE TRANSACTION Based on the Group s latest unaudited combined financial statements for the six months ended 30 June 2014 in the Offer Document: Listing Rule 1006(a) 1006(b) 1006(c) 1006(d) 1006(e) Bases The net asset value of the assets to be disposed of, compared with the Group s net asset value. This basis is not applicable to an acquisition of assets. The net profits attributable to the assets acquired or disposed of, compared with the Group s net profits. The aggregate value of the consideration given or received compared with the issuer s market capitalization* based on the total number of issued shares excluding treasury shares. The number of equity securities issued by the issuer as consideration for an acquisition, compared with the number of equity securities previously in issue. The aggregate volume or amount of proven and probable reserves to be disposed of, compared with the aggregate of the group's proven and probable reserves. This basis is applicable to a disposal of mineral, oil or gas assets by a mineral, oil and gas company, but not to an acquisition of such assets. Relative Figures (%) 15.6 means not applicable *Market capitalisation of the Company is determined by multiplying the number of shares of the Company in issue by the weighted average price of such shares transacted on 12 November 2014, being the market day preceding the date of the Option. Page 4 of 6

5 As the relative figures computed under Rule 1006(c) of Section B of the Listing Manual of the ( SGX ST ) exceeds 5.0% but not 75.0%, the Proposed constitutes a discloseable transaction and approval from the Company s shareholders is not required. 6. INTERESTS OF DIRECTORS AND CONTROLLING SHAREHOLDERS None of the directors or controlling shareholders of the Company has any interest, direct or indirect, in the Proposed. 7. DOCUMENTS FOR INSPECTION A copy of the Option is available for inspection during normal business hours at the Company s registered office at 49 Sungei Kadut Loop Singapore for a period of 3 months from the date of this announcement. 8. SERVICE AGREEMENTS No person will be appointed to the Board of Directors of the Company, and no service agreements will be entered into by the Company, in connection with the Proposed. 9. ANNOUNCEMENTS Further announcements on the Proposed will be made in due course as and when appropriate. BY ORDER OF THE BOARD Winston Chia Wing Keong Executive Chairman and Chief Executive Officer 13 November 2014 Page 5 of 6

6 About ( Serrano and together with its subsidiaries, the Group ) is a leading provider of interior fit out solutions for property development and refurbishment projects in Singapore and Southeast Asia. Its portfolio spans the residential, hospitality, retail and commercial sectors, with a focus on mid to high end private residential developments. Some of its significant projects include prestigious developments such as The Interlace, Reflections at Keppel Bay, Ritz Carlton Residences, Tanjong Pagar and the Youth Olympic Village (Nanyang Technological University) in Singapore; the Star City Thanlyin township development and Traders Hotel (now known as the Sule Shangri La Hotel) in Myanmar; The Estella in Vietnam; and The Met and The River in Thailand. As a testament of its leading position and commitment to quality, the Group has won numerous awards and certifications. These include the Singapore Prestige Brand Award Established Brand in 2013 and 2014, the Asia Pacific Brands Award Singapore s Finest in 2014, the Singapore Furniture Industry Awards The Furniture Manufacturer Award (Gold) in 2013, the Built Environment Industry Asia Awards Regional Award of the Year for Outstanding Business Achievement in 2013, the ASEAN Business Awards Most Admired ASEAN Enterprise Growth (Large Company) in 2013, and the ISO 9001:2008 Quality Management System Certificate for wholesale and distribution of furniture and project management for residential/building furnishings from December 2013 to December This announcement has been prepared by (the Company ) and its contents have been reviewed by the Company s sponsor, United Overseas Bank Limited ( Sponsor ), for compliance with the relevant rules of the Singapore Exchange Securities Trading Limited ( SGX ST ). The Sponsor has not independently verified the contents of this announcement. This announcement has not been examined or approved by the SGX ST. The Sponsor and the SGX ST assume no responsibility for the contents of this announcement, including the correctness of any of the statements or opinions made or reports contained in this announcement. The contact persons for the Sponsor are Mr Khong Choun Mun, Managing Director, Corporate Finance and Mr David Tham, Senior Director, Corporate Finance, who can be contacted at 80 Raffles Place, #03 03 UOB Plaza 1, Singapore , Telephone: Page 6 of 6