1. INTRODUCTION The Board of Directors of GOB wishes to announce that Sering Manis Sdn Bhd ( SMSB or the Purchaser ), a 51%-owned subsidiary of the Company had on 6 June 2016 entered into a conditional Sale and Purchase Agreement ( SPA ) with Panji Selera Sdn Bhd ( PSSB or Vendor ) for the proposed acquisition of a parcel of freehold land held under Geran 10389 Lot 10366, in Mukim Bentong, Daerah Bentong, Pahang Darul Makmur measuring approximately 279.86 acres ( the Land ) for a cash consideration of RM170.67 million ( Purchase Consideration ) ( Proposed Acquisition ). 2. DETAILS OF PROPOSED ACQUISITION 2.1 Information on the Land PSSB is the registered proprietor and beneficial owner of the Land. A summary of the details of the Land is as follows: Title : Geran 10389 Lot 10366, in Mukim Bentong, Daerah Bentong Land area : 1,132,580 square meters or 279.86 acres Category of land use Express condition Restrictions in interest Encumbrances Tenure : Building : Building (Commercial) : Prior consent from the State Authority is required for any transfer, lease or change howsoever of the Land : NIL : Freehold The Land is situated about 4 kilometres away from the turn-off to the Genting Highlands and 11 kilometres away from the peak of Genting Highlands. Page 1 of 6
The Land has potential for resort like residential and commercial development. Details of the development plans are not available at this point in time. GOB is unable to provide information on the net book value of the Land as it is not privy to such information. 2.2 Information on the Vendor PSSB was incorporated in Malaysia as a private limited company on 16 October 1995 under the Companies Act, 1965. The authorised share capital of PSSB is RM5,000,000 comprising 5,000,000 ordinary shares of RM1.00 each. Its issued and paid-up capital is RM1,070,000 comprising 1,070,000 ordinary shares of RM1.00. The principal business of PSSB is property investment. 2.3 Basis of Purchase Consideration The Purchase Consideration for the Proposed Acquisition of RM170.67 million, is based on the selling price of RM14 per square foot. It was arrived at on a willing-buyer and willing-seller basis after taking into consideration Azmi & Co (Shah Alam) Sdn Bhd s, an independent firm of registered professional valuers, valuation of the Land at RM180.0 million using the Comparison Method as set out in their Valuation Certificate dated 1 June 2016. Page 2 of 6
2.4 Terms of Payment The Purchase Consideration shall be paid by SMSB to the Vendor in the following manner:- Percentage (%) of the Purchase Consideration RM 000 Prior to execution of SPA 2% 3,413 Upon the execution of SPA 8% 13,654 Within 1 month upon fulfillment of 90% 153,607 conditions precedent, or within 5 months from date of SPA, whichever is the later Total Purchase Consideration 170,674 2.5 Salient Terms of the SPA 2.51 Conditions Precedent The Proposed SPA shall be conditional upon fulfillment of the following conditions precedent: i) the consents and/or approvals of Economic Planning Unit of the Prime Minister s Department in respect of the sale and purchase of the Land; and ii) the consent from the State Authority authorising the transfer of the Land. 2.52 Completion of Proposed Acquisition The Proposed Acquisition is expected to be completed upon full and final settlement of the balance purchase price within 5 months from the date of SPA. Page 3 of 6
2.6 Liabilities to be assumed by the GOB Group There is no liability, including contingent liability and guarantee, to be assumed by the GOB Group pursuant to the Proposed Acquisition. 2.7 Source of funding The Proposed Acquisition would be funded by internally generated funds and bank borrowings. The proportion of borrowing and internally generated funds will be decided at a later stage. 3. RATIONALE AND PROSPECTS OF THE LAND The GOB Group has continuously been on the look-out for good opportunities to expand its property development activities. The Proposed Acquisition provides an opportunity for GOB Group to increase the size of its land bank in order to enhance its future revenue and earnings. The Land is surrounded by lush greenery and coupled with its close proximity to Genting Highlands would present potential for resort like residential and commercial development. In view of the strategic location and good development potential of the Land, the Proposed Acquisition is expected to contribute positively to the future earnings of GOB Group. 4. RISK FACTORS Like all other business entities, changes in political, economic and regulatory conditions in Malaysia could materially and adversely affect the financial and business prospects of the GOB Group. Generally, the nature of business in the property development industry is dependent on the overall economic condition and market sentiments. The success of the property development projects and hence, their earnings potentials, is primarily dependent on the location and type of development, ability to obtain regulatory approvals and developers project management capabilities as well as prevailing market and economic conditions. Save for risks arising from the development in market and economic conditions, GOB do not foresee any risk factors arising from the Proposed Acquisition. Page 4 of 6
5. FINANCIAL EFFECTS 5.1 Share Capital and Substantial Shareholders Shareholdings The Proposed Acquisition will not have any effect on the issued and paidup share capital of GOB and the shareholdings of the substantial shareholders of GOB. 5.2 Net Assets The Proposed Acquisition will not have any material effect on the net assets of GOB Group. 5.3 Earnings The Proposed Acquisition will not have any material impact on the earnings of the GOB Group for the financial year ending 31 March 2017. Nevertheless, the Proposed Acquisition is expected to contribute positively to the future earnings of GOB Group. 5.4 Gearing As set out in section 2.7 herein, the amount of bank borrowings to be taken up by SMSB to part finance the Proposed Acquisition has not been determined to-date. For illustration purposes, based on the latest audited consolidated financial statements of the GOB Group for the financial year ended 31 March 2015 and the assumption that RM119.47 million representing 70% of the total consideration is financed through bank borrowings, the proforma net gearing position of the Group as at 31 March 2015 would have increased from 0.58 times to 0.85 times. 6. APPROVALS REQUIRED Other than the fulfillment of conditions precedent set out above, the Proposed Acquisition is not subject to approval from any other authority. The Proposed Acquisition is not subject to the approval of the shareholders of the Company. Page 5 of 6
7. DIRECTORS AND MAJOR SHAREHOLDERS INTERESTS None of the directors and/or major shareholders of GOB and/or persons connected with them have any interest, direct or indirect, in the Proposed Acquisition. 8. DIRECTORS RECOMMENDATION The Directors of GOB, having considered all aspects of the Proposed Acquisition, are of the opinion that the Proposed Acquisition is in the best interest of the Company and the GOB Group. 9. OTHER MATTERS 9.1 Estimated timeframe for completion The Proposed Acquisition is expected to be completed by early November 2016. 9.2 Percentage Ratio The highest percentage ratio applicable to the Proposed Acquisition pursuant to paragraph 10.02(g) Chapter 10 of the Listing Requirements is 19.80%. 9.3 Documents available for inspection The SPA and Valuation Certificate are available for inspection at the registered office of GOB at No. 1, Jalan Putra Permai 1A, Taman Equine, 43300 Seri Kembangan, Selangor Darul Ehsan 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 6 June 2016. Page 6 of 6