HAISAN RESOURCES BERHAD ( HAISAN OR THE COMPANY ) LETTER OF OFFER 1. INTRODUCTION On behalf of the Board, Public Investment Bank Berhad wishes to announce that on 22 June 2015, Haisan had accepted a letter of offer for the sale and leaseback of the seven (7) parcels of leasehold industrial land together with the buildings erected thereon, all located at Jalan Pelabuhan Utara, Bandar Sultan Suleiman, 42000 Pelabuhan Klang, Selangor ( Port Klang Properties ) from Axis REIT Managers Berhad ( Axis REIT Managers ) (the management company of Axis Real Estate Investment Trust ( Axis-REIT )), acting on behalf of RHB Trustees Berhad (as trustee for Axis-REIT) ( Purchaser ) ( Letter of Offer ). Further details of the Letter of Offer are set out in the ensuing sections of this announcement. 2. DETAILS OF THE LETTER OF OFFER Axis REIT Managers on behalf of the Purchaser has offered to purchase the Port Klang Properties together with a leaseback arrangement subject to the terms and conditions stipulated in the Letter of Offer as follows: 2.1 Consideration The Consideration for the Port Klang Properties will be RM46.00 million. The purchase of the Port Klang Properties is conditional upon Axis REIT Managers obtaining a valuation from a registered valuer approved by the Securities Commission Malaysia ( SC ) supporting the above valuation within the Period (as defined in Section 2.2(i) of this announcement). 2.2 Deposit Two percent (2%) of the Consideration will be paid to the appointed solicitors of Axis REIT Managers as stakeholders ( Stakeholders ), as a refundable earnest deposit ( Deposit ) upon the acceptance of the Letter of Offer by Haisan, to be released to Haisan upon the date the sale and purchase agreement ( SPA ) which would be executed, becomes unconditional ( Unconditional Date ). - 1 -
The Stakeholders shall refund the Deposit to Axis REIT Managers within seven (7) days of Haisan s receipt of written notification from Axis REIT Managers of any of the following events: (i) (ii) (iii) the approval by the Board of Axis REIT Managers and/or the Purchaser and/or Bursa Malaysia Securities Berhad ( Bursa Securities ) and/or the SC and/or other relevant authorities as the case may be, cannot be obtained within three (3) months from the date the due diligence documents are forwarded to Axis REIT Managers ( Period ); the terms and conditions of the SPA cannot be mutually agreed between the parties within the Period; and the outcome of the financial, valuation, building and legal due diligence of the Port Klang Properties and the existing tenancies and/or leases of the Port Klang Properties (if applicable), to be completed within the Period is not acceptable to the Board of Axis REIT Managers and/or the Purchaser, as the case may be, for any reason whatsoever. Upon payment of the Deposit and Haisan s acceptance of the Letter of Offer, Haisan will not enter into any negotiations to sell the Port Klang Properties to any third parties for the Period. 2.3 Balance payment terms Eight percent (8%) of the Consideration to be paid upon the execution of the SPA to the Stakeholders, to be released to Haisan upon the Unconditional Date. Ninety percent (90%) of the Consideration to be paid within thirty (30) days from the Unconditional Date. 2.4 Condition of Sale The Letter of Offer and the SPA are conditional upon the following: (i) the successful execution of a lease agreement with the following terms: (a) (b) (c) an initial period of lease of fifteen (15) years ( Initial Period ) with an option to renew for fifteen (15) more years making a total of thirty (30) year lease; Haisan will pay an initial rent of RM336,670.50 per month for the first three (3)-year term of the Initial Period; For the rent revision for the second, third, fourth and fifth three (3) year terms (years 4-6, 7-9, 10-12 and 13-15) of the Initial Period, Haisan will agree to an eight percent (8%) increase in rent for the second term (years 4-6) and a ten percent (10%) increase in rent for each of the three (3) year terms thereafter. - 2 -
For the avoidance of doubt, the monthly rental for the following years of the Initial Period is as follows: Years 4-6 : RM363,604.10 Years 7-9 : RM399,964.55 Years 10-12 : RM439,961.00 Years 13-15 : RM483,957.10 (d) (e) (f) (g) (h) In the event the Purchaser intends to sell the Port Klang Properties during the Initial Period or any renewal period thereof, Haisan will be given a first right of refusal to purchase the Port Klang Properties upon terms to be mutually agreed upon within fourteen (14) days of written notification by the Purchaser; a six (6) month rental deposit equivalent to RM2,020,023.00 and one (1) month rent in advance of RM336,670.50 is to be paid to the Purchaser prior to the commencement of the lease with another six (6) months rental deposit equivalent to RM2,020,023.00 to be paid to the Purchaser within three (3) months of signing of the SPA. This rental deposit is to be reduced to a six (6) month rental deposit equivalent to RM2,181,624.80, from the sixth (6 th ) year onwards subject to Haisan having complied with all its obligations under the lease agreement; Haisan will be permitted to sub-let/sub-lease part of the Port Klang Properties to its existing tenants at the commencement of the lease period; Axis-REIT will be responsible for insurance coverage for the Port Klang Properties (for fire or other risks deemed expedient by the lessor) only; and Haisan will be responsible for the entire upkeep, maintenance, repairs, replacement (whether arising from routine maintenance and/or normal wear and tear) of the Port Klang Properties and procuring all required licenses and Bomba certificates, quit rent and assessment and all other outgoings attributable to the Port Klang Properties without any recourse nor contribution from the lessor for the whole duration of the lease; (ii) the approval and extension of the current leasehold term of the Port Klang Properties to a minimum of sixty (60) years unexpired lease from year 2015 or approval of the extension, whichever date is the later, for Lot No 15728, PT506 (Lot No 18491) and PT507 (Lot 15730). Haisan will be responsible for all premiums, levy and all other costs to be incurred for the purposes of extending the tenure of the leasehold period as aforesaid; - 3 -
(iii) (iv) (v) (vi) Haisan is responsible to ensure that there are approved plans for all buildings and structures comprising the Port Klang Properties (including approvals for all non-permissible buildings or structures having been obtained) and the same being issued with the relevant certificate of fitness/certificate of completion and compliance; there shall be no existing surviving contract or agreement affecting the Port Klang Properties and all current and existing contracts in respect of any sale agreement, leases, tenancies and/or other forms of legally binding contract being terminated without any claims, rights or interests against neither Haisan nor the Port Klang Properties subject to the right of Haisan to sub-lease or sub-let as provided in sub para (i) above; the consent from the relevant state authority being obtained for the transfer of the Port Klang Properties to Axis-REIT; and such other conditions precedent that may be advised by the appointed solicitors of Axis REIT Managers from time to time after the completion of the due diligence audit but prior to the execution of the SPA. 2.5 SPA The parties shall immediately upon Haisan s acceptance of the Letter of Offer, proceed to negotiate and mutually agree on all the terms and conditions of the SPA. 3. INFORMATION ON AXIS-REIT Axis-REIT is constituted by a deed dated 15 June 2005 and is principally regulated by the Securities Laws (as defined in Section 2(1) of the Securities Commission Act), the Guidelines on Real Estate Investment Trusts issued by the SC, the Listing Requirements of Bursa Securities, the rules of the Bursa Malaysia Depository Sdn Bhd and taxation laws and rulings. Axis-REIT was listed on Bursa Malaysia on 3 August 2005. Its principal activity is to invest primarily in commercial, office and office/industrial real estate. The issued fund size of Axis-REIT is 547,758,040 units. 4. ESTIMATED TIMEFRAME FOR ENTERING INTO THE SPA Subject to all terms being mutually agreed between the parties, and the other conditions stipulated in Section 2.1 above having been fulfilled within the Period, the parties shall proceed with the execution of the SPA within fourteen (14) days thereafter. Further announcements will be made to Bursa Securities upon the finalisation of the terms and conditions of the SPA and the execution of the SPA. - 4 -
5. DOCUMENTS FOR INSPECTION The Letter of Offer will be available for inspection at the Registered Office of Haisan at Lot 506, Jalan Pelabuhan Utara, Bandar Sultan Suleiman 42000 Pelabuhan Klang, Selangor Darul Ehsan during normal business hours from Monday to Friday (except state public holidays) for a period being not less than three (3) months from the date of this Announcement. This announcement is dated 22 June 2015. - 5 -