SIGNING OF MEMORANDUMS OF UNDERSTANDING BY THE COMPANY WITH VARIOUS PARTIES

Transcription

1 YONG TAI BERHAD ( YTB OR THE COMPANY ) SIGNING OF MEMORANDUMS OF UNDERSTANDING BY THE COMPANY WITH VARIOUS PARTIES 1. INTRODUCTION On behalf of the Board of Directors of YTB ( Board ), AmInvestment Bank Berhad ( AmInvestment Bank ) wishes to announce that the Company had on 3 August 2015 entered into five (5) separate memorandums of understanding ( MOUs ) with the following parties: PTS Properties Sdn Bhd ( PTS Properties ), Boo Kuang Loon and Apple Impression Sdn Bhd ( PTS Vendors ) in respect of the proposed acquisition by YTB of the entire equity interest in PTS Impression Sdn Bhd ( PTS Impression ), a company holding the rights to produce and stage a tourism stage performance known as Impression Melaka ( Proposed Acquisition of PTS Impression ); Admiral City Sdn Bhd ( Admiral City ) for the following: (a) the proposed acquisition of approximately 17 acres of seafront land ( Impression Land ) located in Kawasan Bandar VI, District of Melaka Tengah, Melaka ( Proposed Acquisition of Impression Land ); and (b) proposed establishment of a joint development arrangement to jointly develop approximately 100 acres of leasehold land located adjacent to the Impression Land (hereinafter referred to as Melaka JV Land ), all of which are located in Kawasan Bandar VI, District of Melaka Tengah, Melaka ( Proposed Melaka JV ); (iv) (v) Pang Kwee Yin and Wong See Ming ( Terrawest Vendors ) in respect of the proposed acquisition of Terrawest Resources Sdn Bhd ( Terrawest ), a company which owns two (2) parcels of freehold and contiguous land located in Puchong, Selangor ( Terrawest Land ) for a potential property development project ( Proposed Acquisition of Terrawest ); Sia Chien Vui, Dato Sri Lee Ee Hoe and PTS Properties Sdn Bhd ( Yuten Vendors ) in respect of the proposed acquisition by YTB of the entire equity interest in Yuten Development Sdn Bhd ( Yuten ), a company which has a joint venture arrangement with Fahad Holdings Sdn Bhd to jointly develop two (2) adjoining parcels of land along Jalan U-Thant, Kuala Lumpur ( Proposed Acquisition of Yuten ); and Lim Hooi Yen and Beeh Boon Siang ( L&B Vendors ) in respect of the proposed acquisition of Land & Build Sdn Bhd ( L&B ), a company which holds the development rights to develop two (2) parcels of freehold land located in Johor Bahru ( Proposed Acquisition of L&B ). The Proposed Acquisition of PTS Impression, Proposed Acquisition of Impression Land, Proposed Melaka JV, Proposed Acquisition of Terrawest, Proposed Acquisition of Yuten and Proposed Acquisition of L&B are collectively referred to as the Proposals. The MOUs are not intended to be legally binding agreements and are meant only to serve as a statement of intention of the parties to the MOUs. 1

2 The MOUs set out the mutual understanding of each of the parties in relation to the Proposals as to the principal terms and conditions for the Proposals. Pursuant to the MOUs, the parties have agreed to negotiate exclusively in good faith the detailed terms and conditions for each of the Proposals with the intention of entering into definitive agreements. The MOUs take effect from the date of the MOUs and shall remain in force until the expiry of three (3) months (except for the MOU entered into with Admiral City that shall remain in force until the expiry of two (2) months) from the date of the MOUs or any other date to be mutually agreed in writing by the parties. The MOUs shall be deemed terminated upon execution of the definitive agreements for the Proposals. The parties to the MOUs respectively undertake that they shall not approach any other party either directly or indirectly in relation to the Proposals during the subsistence of the MOUs. 2. MOU ON THE PROPOSED ACQUISITION OF PTS IMPRESSION ( PTS IMPRESSION MOU ) 2.1 Salient terms of the PTS Impression MOU The salient terms of the PTS Impression MOU are set out below: The purchase consideration and the manner of settlement thereof for the Proposed Acquisition of PTS Impression shall be determined and mutually agreed by the parties; The conditions precedent of the Proposed Acquisition of PTS Impression shall include but not limited to the following: (a) (b) YTB is satisfied with the results of the due diligence exercise conducted on PTS Impression; and such other condition(s) or approval(s) as may be required by YTB and the PTS Vendors to be mutually agreed upon to complete the definitive agreement to be signed for the Proposed Acquisition of PTS Impression. 2.2 Information on PTS Impression PTS Impression is a private limited company incorporated in Malaysia on 25 February 2013 under the Companies Act 1965 ( the Act ). The authorised share capital of PTS Impression is RM1,000, comprising 1,000,000 ordinary shares of RM1.00 each of which 1,000,000 ordinary shares of RM1.00 each have been issued and fully paid-up. PTS Impression is principally involved in the development and operation of tourism stage performance and investment holding. It has secured a license from a foreign third party to produce and stage a tourism stage performance known as Impression Melaka. 2

3 2.3 Information on the PTS Vendors PTS Properties holds 70.00% equity interest in PTS Impression. It is a private limited company incorporated in Malaysia on 9 April 2012 under the Act and is principally involved in property development, construction, sales and leasing, technology solution, hotel management and property management. Boo Kuang Loon is a citizen of Malaysia who holds 5.00% of the equity interest in PTS Impression. He is also a substantial shareholder of YTB and PTS Properties. Apple Impression Sdn Bhd holds 25.00% equity interest in PTS Impression. It is a private limited company incorporated in Malaysia under the Act and is principally an investment holding company. Dato Sri Lee Ee Hoe is a substantial shareholder of Apple Impression Sdn Bhd and is also a major shareholder of YTB. 3. MOU ON THE PROPOSED ACQUISITION OF IMPRESSION LAND AND PROPOSED MELAKA JV ( MELAKA MOU ) 3.1 Salient terms of the Melaka MOU The salient terms of the Melaka MOU are set out below: Proposed Acquisition of Impression Land The completion of the Proposed Acquisition of Impression Land is conditional upon inter alia the result of all the appropriate due diligence been conducted by YTB and YTB having obtained the approval of its shareholders, if required; A non-forfeitable earnest deposit of RM3,702,600 is paid by YTB to Admiral City on signing of the Melaka MOU. The earnest deposit shall be treated as having been paid towards part payment of the deposit on signing of the sale and purchase agreement. Proposed Melaka JV Admiral City and its subsidiaries (namely Oceancove Development Sdn Bhd, Oceanfront Development Sdn Bhd and Strategic Property Sdn Bhd) shall enter into a joint development agreement with YTB to grant YTB the full rights and entitlement to develop the Melaka JV Land on such terms and subject to such limitations as may be agreed between them under the relevant definitive agreement; A non-forfeitable earnest deposit of RM3,000,000 is paid by YTB to Admiral City (in its capacity as agent and authorised representative for all landowners of the Melaka JV Land) on signing of the Melaka MOU. The earnest deposit shall be treated as having been paid towards part payment of the amount payable by YTB to the landowners when the joint development agreement is signed. The above two (2) proposals are inter-conditional upon each other. 3

4 3.2 Information on the landowners (iv) Admiral City is a private limited company incorporated on 23 January 2013 in Malaysia under the Act and is principally involved in property development and construction. Oceancove Development Sdn Bhd, a wholly-owned subsidiary of Admiral City is a private limited company incorporated on 21 April 2010 in Malaysia under the Act and is principally involved in property development and construction. Oceanfront Development Sdn Bhd,a wholly-owned subsidiary of Admiral City is a private limited company incorporated on 15 April 2010 in Malaysia under the Act and is principally involved in property development and construction. Strategic Property Sdn Bhd,a wholly-owned subsidiary of Admiral City is a private limited company incorporated on 19 April 2010 in Malaysia under the Act and is principally involved in property development and construction. 3.3 Details of the lands The details of the Impression Land and Melaka JV Land measuring approximately 117 acres in aggregate are as follows: four (4) adjoining parcels of leasehold land known as HS(D) to HS(D) for PT 2253 to PT 2256 respectively, all in Kawasan Bandar VI, District of Melaka Tengah, Melaka. Admiral City has represented that it is in the midst of acquiring the abovementioned lands. The current registered owner of the aforesaid lands is Grandwin Development Sdn Bhd, a private limited company incorporated on 8 January 2013 in Malaysia under the Act. four (4) adjoining parcels of leasehold land known as HS(D) for PT No. 1800, HS(D) for PT No. 1797, HS(D) for PT 1798 and Pajakan Negeri for Lot No , all in Kawasan Bandar VI, District of Melaka Tengah, Melaka. Oceancove Development Sdn Bhd is the registered and beneficial owner of the lands. six (6) adjoining parcels of leasehold land known as HS(D) to HS(D) for PT 1839 to 1844 respectively, all in Kawasan Bandar VI, District of Melaka Tengah, Melaka. Oceanfront Development Sdn is the registered and beneficial owner of the aforesaid lands. (iv) seven (7) adjoining parcels of leasehold land known as HS(D) for PT No. 1832, HS(D) for PT No. 1833, HS(D) for PT No. 1834, HS(D) for PT No. 1838, HS(D) for PT No. 1837, HS(D) for PT No and HS(D) for PT No. 1835, all in Kawasan Bandar VI, District of Melaka Tengah, Melaka. Strategic Property Sdn Bhd is the registered and beneficial owner of the aforesaid lands. 4

5 3.4 Details of the proposed development projects for Melaka JV Land and Impression Land Subject to the approval of relevant authorities, the Melaka JV Land together with the Impression Land are intended for a proposed master development over a span of eight (8) years, which may include residential, retail, hotels, serviced apartments, office towers, commercial shops and offices. The Impression Land is intended for a proposed development of a theatre mainly for the production of Impression Melaka performance. The estimated gross development value ( GDV ) for the above proposed development projects are expected to be approximately RM6.3 billion. 4. MOU FOR THE PROPOSED ACQUISITION OF TERRAWEST ( TERRAWEST MOU ) 4.1 Salient terms of the Terrawest MOU The salient terms of the Terrawest MOU are set out below: (iv) In consideration of the refundable earnest deposit of RM300,000 only paid by YTB to the Terrawest Vendors upon signing of the Terrawest MOU, YTB shall, subject to the execution of the definitive agreement, acquire all the 200,000 ordinary shares of RM1.00 each in Terrawest, representing its entire issued and paid-up share capital, free from encumbrances at a purchase consideration to be agreed upon between the parties; The Proposed Acquisition of Terrawest is to be made on the basis that Terrawest owns and continues to own the Terrawest Land free from all encumbrances on completion of the definitive agreement; YTB shall be entitled to carry out a legal, financial and/or technical due diligence investigation into the Terrawest Land, Terrawest and its affairs within the duration of the MOU as set out in Section 1 above. YTB is entitled to terminate the Terrawest MOU if the result of the due diligence is not satisfactory to YTB; and The parties intend that the definitive agreement to be signed shall be subject to the following conditions subsequent: (a) (b) YTB shall cause Terrawest to carry out and complete the proposed project (details of which are set out in Section 4.4 below) on the Terrawest Land; and YTB shall cause Terrawest to deliver vacant possession of the Hotel Block (as described in Section 4.4 below) to the Terrawest Vendors on completion of the Hotel Block. 5

6 4.2 Information on Terrawest Terrawest is a private limited company incorporated in Malaysia on 21 December 1995 under the Act. The authorised share capital of Terrawest is RM500, comprising 500,000 ordinary shares of RM1.00 each of which 200,000 ordinary shares of RM1.00 each have been issued and fully paid-up. Terrawest is principally involved in property investment. Terrawest is the registered and beneficial owner of two (2) parcels of freehold, contiguous commercial land held under HS(D) PT No and HS(D) PT No both in Mukim Petaling, Daerah Petaling, State of Selangor measuring approximately 1.5 acres in aggregate. 4.3 Information on the Terrawest Vendors Pang Kwee Yin and Wong See Ming are Malaysian citizens and collectively they hold 100% equity interest in Terrawest. 4.4 Details of the proposed development project for the Terrawest Land The proposed development project intended to be carried out by YTB on the Terrawest Land, subject to approval of relevant authorities, involves a mixed development which comprise: One (1) tower block of Small Office Versatile Office (SOVO) units or such other types of units of similar concept for sale; one (1) hotel tower ( the Hotel Block ); and the two blocks to have a common podium housing common facilities, offices, commercial retail units and car-parking facilities. The estimated GDV for the proposed development project is expected to be approximately RM173 million (excluding the Hotel Block). 5. MOU FOR THE PROPOSED ACQUISITION OF YUTEN ( YUTEN MOU ) 5.1 Salient terms of the Yuten MOU The salient terms of the Yuten MOU are set out below: YTB shall acquire all the ordinary shares of RM1.00 each in Yuten from the Yuten Vendors free from encumbrances; The purchase price for the Proposed Acquisition of Yuten is to be agreed between YTB and the Yuten Vendors and settled in such manner to be mutually agreed by the parties thereto; and The completion of the Proposed Acquisition of Yuten is subject to and conditional upon inter alia the result of the full legal, financial and commercial due diligence exercise to be conducted on Yuten and JVA (as described in Section 5.2 below), and any other conditions precedent to be mutually agreed by the parties. 6

7 5.2 Information on Yuten Yuten is a private limited company incorporated in Malaysia on 3 October 2014 under the Act. The authorised share capital of Yuten is RM5,000, comprising 5,000,000 ordinary shares of RM1.00 each of which 1,000,000 ordinary shares of RM1.00 each have been issued and fully paid-up. Yuten is principally involved in property development. By a joint venture agreement dated 15 July 2015 made between Fahad Holdings Sdn Bhd ( FHSB ) and Yuten, FHSB has assigned Yuten the rights to jointly develop two (2) adjoining parcels of land known as Lot 169 and Lot 170, Seksyen 89, Jalan U-Thant, Kuala Lumpur, measuring approximately 1.2 acres in aggregate ( JVA ). The proposed development project intended to be carried out by YTB on the aforesaid lands, subject to the approval of relevant authorities, involves a proposed development of serviced apartments. The estimated GDV of the proposed development project is expected to be approximately RM168 million. 5.3 Information on the Yuten Vendors PTS Properties holds 55.00% equity interest in Yuten. Information of PTS Properties is disclosed in Section 2.3 above. Boo Kuang Loon, is substantial shareholder of PTS Properties and is also a substantial shareholder of YTB. Dato Sri Lee Ee Hoe and Sia Chien Vui are citizens of Malaysia and they hold 30.00% and 15.00% equity interest in Yuten respectively. Dato Sri Lee Ee Hoe is also a major shareholder of YTB. 6. MOU ON THE PROPOSED ACQUISITION OF L&B ( L&B MOU ) 6.1 Salient terms of the L&B MOU The salient terms of the L&B MOU are set out below: YTB shall acquire all the ordinary shares of RM1.00 each in L&B from the L&B Vendors free from encumbrances; The purchase price for the Proposed Acquisition of L&B is to be agreed between YTB and the L&B Vendors and is to be settled in such manner as to be mutually agreed by the parties; and The completion of the Proposed Acquisition of L&B is subject to and conditional upon inter alia the result of the full legal, financial and commercial due diligence exercise to be conducted on L&B and any other conditions precedent to be mutually agreed by the parties. 6.2 Information on L&B L&B is a private limited company incorporated in Malaysia on 25 October 2005 under the Act. The authorised share capital of L&B is RM500, comprising 500,000 ordinary shares of RM1.00 each of which two (2) ordinary shares of RM1.00 each have been issued and fully paid-up. L&B is principally involved in property development. 7

8 By a sale of development rights agreement dated 31 December 2012 made between MARC NA Development Sdn Bhd and L&B, L&B had acquired the development rights to amongst others, undertake and manage the development of two (2) adjoining parcels of freehold land held under title number Lot No and 2042, Geran No A and 54152A respectively in Daerah and Bandar of Johor Bahru, in the State of Johor ( JB Land ), measuring approximately 1.77 acres. 6.3 Information on the L&B Vendors Lim Hooi Yen and Beeh Boon Siang are citizens of Malaysia and they each hold 50% equity interest in L&B. 6.4 Details of the proposed development project for the JB Land The proposed development project intended to be carried out on the JB Land involves a mixed development which compriseretail and Small Office Versatile Office (SOVO) units, hotel and office suites. The development order for the above project has been approved by the Datuk Bandar, Majlis Bandaraya Johor Bahru on 23 May The estimated GDV of the proposed development project is expected to be approximately RM363 million. 7. RATIONALE OF THE MOU In 2014, the YTB group ( YTB Group or the Group ) had entered into a Project Collaboration Agreement with PTS Properties to jointly develop a 29-storey luxury condominium hotel known as 99 Residence in Melaka with a GDV of RM128 million. The collaboration had resulted in the diversification of the business of YTB into property development business segment. The development of 99 Residence was completed in June In 2015, the Group had entered into a joint venture arrangement with Apple 99 Development Sdn Bhd, a wholly-owned subsidiary of PTS Properties for the joint development of The Apple, comprising 32-storey 361 units of serviced apartment and a luxury 4-star hotel known as The Courtyard by Marriott in Melaka which is scheduled to be opened by end of In line with the overall YTB Group s expansion plans, the Proposals will pave the way for the Group to tap into the growing property development business segment in Malaysia at different geographical areas. The MOUs entered into with the respective parties will allow the Company to negotiate with the parties involved and work together in executing definitive agreements for the Proposals. The Proposals are expected to increase YTB s development land bank, expand its geographical presence, provide near term, long term as well as recurring sources of revenue and profit. 8. FINANCIAL EFFECTS The financial effects of the Proposals can only be determined upon the signing of definitive agreements. 8

9 9. INTERESTS OF DIRECTORS, MAJOR SHAREHOLDERS AND/OR PERSONS CONNECTED TO THEM None of the directors of YTB and/or persons connected to them have any interest, direct or indirect, in the MOUs. Save as disclosed below, none of the major shareholders of YTB and/or persons connected to them have any interest, direct or indirect, in the MOUs: (a) Dato Sri Lee Ee Hoe is a major shareholder of YTB and is also a director and substantial shareholder of Yuten and PTS Impression; and (b) Boo Kuang Loon is also a director and substantial shareholder of Yuten and PTS Impression. He is a substantial shareholder of YTB. 10. DIRECTOR S STATEMENT The Board having taken into consideration all aspects of the MOUs is of the opinion that the MOUs are in the best interest of YTB Group. 11. APPROVALS REQUIRED The execution of the MOUs does not require the approval of shareholders of the Company or any relevant government authorities. 12. ADVISERS AND INDEPENDENT ADVISER ( IA ) AmInvestment Bank has been appointed as the Principal Adviser to the Company for the Proposals. The Company will appoint an IA for the Proposed Acquisition of Yuten and Proposed Acquisition of PTS Impression prior to the terms of the aforesaid proposals being finalised, if required. 13. DOCUMENTS AVAILABLE FOR INSPECTION The MOUs are available for inspection at the registered office of YTB at Ground Floor, No. 8, Lorong Universiti B, Section 16, Petaling Jaya, Selangor during office hours from Mondays to Fridays for a period of three (3) months from the date of this announcement. A detailed announcement on the Proposals will be made upon finalisation of the terms and conditions and execution of the definitive agreements. This announcement is dated 3 August