As mentioned in paragraph 1 above, the Vendors are Mr Tan Cheng Teik and Mr Tan Ban Keat.

Transcription

1 ANNOUNCEMENT SUBJECT: TRANSACTION (CHAPTER 10 OF LISTING REQUIREMENTS) GABUNGAN AQRS BERHAD ("GBGAQRS" OR THE COMPANY") PROPOSED ACQUISITION OF LAND FORMING PART OF MASTER TITLE HELD UNDER PN LOT 14000, MUKIM OF DENGKIL, DISTRICT OF SEPANG, STATE OF SELANGOR DARUL EHSAN BY THE COMPANY S WHOLLY-OWNED SUBSIDIARY, AQRS THE BUILDING COMPANY SDN BHD FOR A PURCHASE CONSIDERATION OF RM35,644, ( PROPOSED ACQUISITION ) 1. Introduction The Board of Directors of the Company ("Board ) wishes to announce that on 26 September 2013, a wholly-owned subsidiary of the Company, AQRS The Building Company Sdn Bhd (Company No X) ( AQRS ) has entered into a Sale and Purchase Agreement ("SPA") with Mr Tan Cheng Teik and Mr Tan Ban Keat (collectively referred to as "Vendors") for the acquisition of all that parcel of vacant residential land as identified in the layout plan attached to the SPA measuring approximately acres in area, forming part of a master lot i.e. a 99- year leasehold land expiring 19 October 2093 held under PN Lot in the Mukim of Dengkil, District of Sepang, State of Selangor Darul Ehsan ( Master Title Land ) (hereinafter referred to as Land ), for a purchase consideration of RM35,644, ("Purchase Consideration") on an as is where is basis free from all mortgage, pledge, lien, charge (whether fixed or floating), assignment, lease, licence, caveat or claims from any third party, encumbrances and other security interest whatsoever and with vacant possession and all those rights, title and interest held by the Vendors in connection therewith and subject to the existing conditions of title and category of land use whether expressed or implied, and restrictions-ininterests (if any) relating to or affecting the Land and to the terms and conditions of the SPA. 2. Information on Vendors As mentioned in paragraph 1 above, the Vendors are Mr Tan Cheng Teik and Mr Tan Ban Keat. Mr Tan Ban Keat is:- a director of GBGAQRS s 52%-owned subsidiary, Prestige Field Development Sdn Bhd (Company No M) ( PFDSB ); and a director and shareholder (holding 50% equity interest) of Gemas Idaman Sdn Bhd (Company No A) which holds 23% equity interest in PFDSB. Mr Tan Cheng Teik is the father of Mr Tan Ban Keat. 3. Information on the Land As mentioned in paragraph 1 above, the Land is a parcel of vacant residential land as identified in the layout plan attached to the SPA measuring approximately acres in area, forming part of a master lot i.e. a 99-year leasehold land expiring 19 October 2093 held under PN Lot in the Mukim of Dengkil, District of Sepang, State of Selangor Darul Ehsan. The Land, under the administration of the Local Council Majlis Perbandaran Sepang ( MPS ), is generally flat in terrain and surrounded by the Air Hitam Lake. It is located next to a prestige by-the-lake development project. 1

2 4. Details of the Proposed Acquisition 4.1 Basis and Justification for the Purchase Consideration The Purchase Consideration of RM35,644, for the Proposed Acquisition was arrived at after taking into consideration, inter-alia, the market value of the Land as appraised by an independent registered valuer, VPC Alliance (PJ) Sdn Bhd ( Valuer ) vide its valuation report dated 23 September 2013 using the Comparison Method. The market value of the Land and the details in connection therewith, as appraised by the Valuer, are as follows:- Valuer VPC Alliance (PJ) Sdn Bhd Valuation date Market Value Comparison with Purchase Consideration 13 August 2013 RM35,700, % higher than the Purchase Consideration 4.2 Salient Terms of the SPA The salient terms of the SPA are as follows:- a) An earnest deposit of RM1,000,000 ( Earnest Deposit ) has been paid to the Vendors prior to the execution of the SPA. b) Upon execution of the SPA, AQRS has paid to:- i) AQRS s solicitors as stakeholders the sum of RM712, ( Retention Sum ); and ii) the Vendors the sum of RM5,416, ( Balance Deposit ). (The Earnest Deposit, Retention Sum and Balance Deposit are hereinafter collectively referred to as Deposit ) Upon the completion of payment for the Deposit, the Vendors shall assign the development rights to the Land to AQRS and shall allow AQRS to charge the Land for financing facilities. c) The Purchase Consideration less the Deposit amounting to RM28,515, ( Balance Purchase Price ) shall be paid to the Vendors in three (3) tranches in the following manners:- i) on the date falling three (3) months from the date of the SPA, a sum equivalent to 30% of the Purchase Consideration amounting to RM10,693, ( Tranche 1 ); ii) on the date falling twelve (12) months from the date of the SPA, a sum equivalent to 25% of the Purchase Consideration amounting to RM8,911, ( Tranche 2 ); and iii) a sum equivalent to 25% of the Purchase Consideration amounting to RM8,911, ( Tranche 3 ) shall be paid either:- simultaneously with Tranche 2, on the date falling twelve (12) months from the date of the SPA ( Trigger Date ); OR, as AQRS may in its sole and absolute discretion elect, 2

3 at any time after the Trigger Date but in any event no later than the date falling twenty-four (24) months from the date of the SPA, subject to AQRS paying to the Vendors interest at the rate of eight per centum (8%) per annum to be calculated on a daily basis on Tranche 3 or such part thereof which shall be outstanding commencing on the day immediately following the expiry of the Trigger Date up to and including the date of full payment. d) Vacant possession of the Land shall be delivered by the Vendors to AQRS within three (3) days from the date of the Vendors receipt of the apportioned outgoings (quit rent and other lawful outgoings) in respect of the Land payable by AQRS to the relevant authorities pursuant to the SPA. The outgoings shall be apportioned between AQRS and the Vendors as at the date of the SPA. 4.3 Source of Funds The Purchase Consideration will be satisfied by a combination of the following means, the breakdown of which has yet been finalised at this point in time:- internally generated funds; and/or proceeds from the Public Issue of the Company as set out in the Company s Prospectus dated 29 June 2012; and/or bank borrowings; and/or cash from sales proceeds of the development project to be carried out on the Land. 4.4 Liabilities to be Assumed There are no liabilities, including contingent liability and guarantees to be assumed by GBGAQRS and its group of companies ( GBGAQRS Group ) arising from the Proposed Acquisition. 4.5 Estimated Time Frame for Completion of the Proposed Acquisition Barring any unforeseen circumstances, the Proposed Acquisition is expected to be completed within twenty-four (24) months from the date of the SPA. 5. Rationale of the Proposed Acquisition The Proposed Acquisition was part of AQRS s business plans for the years 2013/2014. In order to strengthen and expand GBGAQRS s Property Development Division which is complementary to the Construction Division, GBGAQRS Group is looking for new land banks in strategic locations to develop the same into either commercial or residential properties. 6. Future Prospects of the Land Surrounded by the Air Hitam Lake and located next to a prestige by-the-lake development project, the exclusive lakefront location of the Land would elevate the status of the prospective residents staying within the compound and allow the residents to enjoy approximately 20 acres of green space spreading over an elevated podium with a fantastic lake view. The summary of the proposed development project to be carried out (which has yet been named) on the Land is as follows:- to build approximately 1,142 units (subject to change) of gated and guarded residential units comprising low-rise park / lake villas and medium / high-rise condominiums; 3

4 estimated total development cost and expected gross profits to be derived therefrom are RM450 million and RM150 million respectively; sources of funds to finance the development cost would consist of a combination of internally generated funds and bank borrowings; targeted to commence work on the development upon completion of the Proposed Acquisition and obtaining of all assignments/approvals from the relevant authorities; the relevant approvals for the proposed development are pending submissions to MPS; and the proposed development is expected to be completed within five (5) years from its commencement date. 7. Risk relating to the Proposed Acquisition As AQRS s core business is in the property sector, the Proposed Acquisition is not expected to have any material risk factor inherent with the sector, mainly attributable to timely commencement or completion of projects, obtaining of required approvals, performance of contractors and adverse economic events or recession. Any material escalation in costs of cement and other building materials as well as petrol prices may also contribute to a higher overall development cost thereby impacting the profit margins of any development projects. 8. Financial Effects of the Proposed Acquisition 8.1 Share Capital and Shareholdings of the Substantial Shareholders The Proposed Acquisition will not have any effect on the issued and paid-up share capital and substantial shareholders' shareholdings of the Company as the Purchase Consideration will be satisfied wholly by cash and does not involve any issuance of GBGAQRS shares. 8.2 Net Assets ("NA") and NA per Share The Proposed Acquisition is not expected to have any material effect on the NA and NA per share of the GBGAQRS Group as the Purchase Consideration will be satisfied wholly by cash and does not involve any issuance of GBGAQRS shares. 8.3 Earnings and Earnings per Share The proposed development arising from the Proposed Acquisition is not expected to have any effect on the earnings of GBGAQRS Group and earnings per share of GBGAQRS for the financial year ending 31 December 2013, but is expected to contribute positively to the future earnings of GBGAQRS Group beyond the financial year ending 31 December Gearing As the Purchase Consideration is to be satisfied by, amongst others as mentioned in subparagraph 4.3 above, internally generated funds and bank borrowings, the exact mix of which has yet been finalised, the effect of the Proposed Acquisition on the gearing of the GBGAQRS Group is therefore not quantified at this juncture. 4

5 9. Approvals Required The Proposed Acquisition is not subject to the approval of shareholders of the Company. 10. Percentage Ratio The highest percentage ratio applicable to the Proposed Acquisition pursuant to Paragraph 10.02(g) of the Main Market Listing Requirements ( MMLR ) of Bursa Malaysia Securities Berhad ( Bursa Securities ) is 16.55% based on the Audited Financial Statements of GBGAQRS as at 31 December Interest of Directors, Major Shareholders and/or Persons Connected to Them None of the Directors, major shareholders of the Company and persons connected to them has any interest, direct or indirect, in the Proposed Acquisition. 12. Directors Statement The Board, having considered all aspects of the Proposed Acquisition, is of the opinion that the Proposed Acquisition is in the best interest of GBGAQRS Group. 13. Documents for Inspection The SPA dated 26 September 2013 and the Valuation Report dated 23 September 2013 are available for inspection by the members of the Company at the registered office of the Company at G-58-1, Blok G, Jalan Teknologi 3/9, Bistari De Kota, Kota Damansara, PJU 5, Petaling Jaya, Selangor Darul Ehsan during normal business hours from Mondays to Fridays (except public holidays) for a period of three (3) months from the date of this announcement. This announcement is dated 26 September