Company Name : TROPICANA CORPORATION BERHAD Stock Name : TROP Stock Code : 5401 Type : Announcement Subject : TRANSACTION Description : TROPICANA CORPORATION BERHAD ( TROPICANA ) DISPOSAL OF OFFICE PREMISES BEARING THE POSTAL ADDRESS OF UNIT A-3A-10, BLOCK A, DAMANSARA INTAN, NO.1 JALAN SS20/27 47400 PETALING JAYA SELANGOR TOGETHER WITH ACCESSORY PARCELS COMPRISING APPROXIMATELY 1,519 CAR PARKING BAYS AND SUCH OTHER FIXTURES AND EQUIPMENTS INSTALLED AND AFFIXED ON VARIOUS AREAS WITHIN THE COMPLEX, BY DICORP LAND SDN. BHD., A WHOLLY-OWNED SUBSIDIARY OF BAKAT RAMPAI SDN. BHD., WHICH IN TURN IS A WHOLLY-OWNED SUBSIDIARY OF TROPICANA, TO SCP ASSETS SDN. BHD., FOR A CASH CONSIDERATION OF RM24,902,650 1. INTRODUCTION The Board of Directors of Tropicana wishes to announce that Dicorp Land Sdn. Bhd. ( Dicorp or Vendor ), a wholly-owned subsidiary of Bakat Rampai Sdn. Bhd. ( BRSB ), which in turn is a wholly-owned subsidiary of Tropicana Corporation Berhad ( Tropicana ), had on 1 September 2016, entered into a sale and purchase agreement ( SPA ) with SCP Assets Sdn. Bhd. ( SCP or Purchaser ) for the disposal of all that parcel of all that office premises held under Hakmilik Strata Geran 54975/M1-A/5/113, No. Petak 113, Tingkat No. 5, Bangunan No.M1-A, Lot No.9, Pekan Sungai Penchala, Daerah Petaling, Negeri Selangor and bearing the postal address of Unit A-3A-10, Block A, Damansara Intan, No. 1 Jalan SS20/27 47400 Petaling Jaya, Selangor ( Complex ) and measuring in area approximately 107 square metres ( Unit ) together with accessory parcels Nos. A1 to A338 and A341 to A676 as endorsed on the strata title to the said Unit, comprising approximately 1,519 car parking bays ( Car Parks ) ( Property ), and boom gates, ticket issuing machines, auto pay stations, exit verifiers and such other car parking equipments and machineries and signages as the same are listed in the SPA installed and affixed on various areas within the Complex ( Car Park Equipment ), for a cash consideration of RM24,902,650 ( Sale Consideration ) ( Disposal ). 2. INFORMATION OF THE DISPOSAL 2.1 Information on the Vendor The Vendor is a private limited company incorporated on 17 May 1994 in Malaysia under the Companies Act, 1965 ( Act ). The present authorised share capital of the Vendor is RM5,000,000 comprising 5,000,000 ordinary shares of RM1.00 each, for which 2,200,000 ordinary shares of RM1.00 each have been issued and fully paid-up. The principal activity of the Vendor is that of property development. 2.2 Information on the Purchaser The Purchaser is a private limited company incorporated on 16 August 2013 in Malaysia under the Act. The present authorised share capital of the Purchaser is RM400,000 comprising 390,000 ordinary shares of RM1.00 each and 10,000 preference shares of RM1,00, for which 10,000 ordinary shares of RM1.00 each and 10,000 preference shares of RM1.00 each have been issued and fully paid-up. The principal activity of the Vendor is that of property investment holding. 1
2.3 Details of the Property Further information on the Property are as follows: Proprietor : Dicorp Land Sdn. Bhd. Postal address and identification : Hakmilik strata geran 54975/M1-A/5/113, No. Petak 113, Tingkat No. 5, Bangunan No.M1-A, Lot No.9, Pekan Sungai Penchala, Daerah Petaling, Negeri Selangor and bearing the postal address of Unit A-3A-10, Block A, Damansara Intan, No. 1 Jalan SS20/27 47400 Petaling Jaya, Selangor Built-up area : Approximately 107 square metres for the Complex Existing Use : Operating and managing of the Car Parks Restriction-in-interest : None Tenure : Freehold Net book value as at 31 December 2015 : RM235,414 Encumbrances : None Original cost of investment / Date of investment Approximate age of Unit : 16 years Valuation : N/A : RM235,414 / January 2000 2.4 Basis of the Sale Consideration The Sale Consideration was arrived based on negotiations between the parties on a willingbuyer willing-seller basis after taking into consideration, among others, the following: The yield derived from the Property; and The prevailing market value of the Property and Car Park Equipment. 2.5 Salient Terms of the Disposal The salient terms of the SPA include, amongst others, the following: 2.5.1 Basis of Sale The Property and Car Park Equipment are to be sold to the Purchaser with vacant/legal possession (as the case may be) free from all encumbrances on an as is where is basis, but subject to the condition of title whether express or implied and the existing category of land use affecting the Property at the Sale Consideration and subject to the terms and conditions contained in the SPA. 2.5.2 Payment terms of the Sale Consideration The Sale Consideration is payable in full by the Purchaser as follows: 2
(iii) (iv) (v) Prior to the execution of the SPA, the Purchaser has paid to the Vendor the sum of RM498,053 only being earnest deposit and towards part payment of the Sale Consideration ( Earnest Deposit ). Upon the execution of the SPA, the Purchaser has paid the sum of RM1,992,212 only to the Vendor being the balance deposit and part payment towards the Sale Consideration ( Balance Deposit ). The Earnest Deposit and the Balance Deposit shall constitute as deposit and towards part payment of the Sale Consideration ( Deposit ). The Purchaser shall pay the balance Sale Consideration amounting to the sum of RM22,412,385 only ( Balance Sale Consideration ) to the Vendor s solicitors as stakeholders within three (3) months from the date of the SPA ( Completion Period ). In the event that the Purchaser fails to pay or procure the payment of the Balance Sale Consideration on or before the Completion Period, the Vendor shall grant to the Purchaser an extension of a further one (1) month to pay the same ( Extended Completion Period ) provided always that the Purchaser shall pay to the Vendor interest at the rate of eight per centum (8%) per annum on the outstanding and unpaid Balance Sale Consideration calculated on a day to day basis from the day following the expiry of Completion Period to the date of actual payment thereof, which payment shall be paid at the same time and together with the outstanding of the Balance Sale Consideration. Upon the receipt of the Balance Sale Consideration together with any late payment interest and Goods and Services Tax ( GST ) ( Completion Date ), the Vendor s solicitors are hereby irrevocably authorised by the parties hereto to release the Balance Sale Consideration to the Vendor after deductions of all outgoings to be borne by the Vendor (if any) and upon the following: (a) (b) In the event that the Purchaser obtains a loan to part finance the purchase of the said Property, the Vendor s solicitors are hereby expressly authorised by the parties hereto to release to the Vendor the Balance Sale Consideration upon receipt of the same; In the event that the Purchaser is purchasing the said Property by cash term upon the expiry of seven (7) working days from the date of the presentation of the Transfer (as defined below) in favour of the Purchaser for registration with the appropriate land office/registry provided always that the following documents: (1) the original strata title to the Property free from encumbrances; (2) a valid and registrable but unstamped Memorandum of Transfer in respect of the Property in favour of the Purchaser ( Transfer ) duly executed by the Vendor in favour of the Purchaser unless the same shall already have been delivered to the Purchaser s solicitors; (3) certified true copies of the quit rent and assessment receipts (certified by the Vendor s solicitors) for such payments made or to be made in respect of the Property for the current year, unless the same shall have been delivered to the Purchaser s solicitors; (4) such other documents as may be necessary to register the Transfer in favour of the Purchaser that are incumbent upon the Vendor to furnish to effect the Transfer; (collectively, the Transfer Documents ) 3
have been presented for registration within five (5) days from the receipt of the Transfer Documents by the financier solicitors, whichever is earlier; and (c) Provided always that the tax invoice to be issued by the Vendor pursuant to Section 33 of the GST Act 2014 for the Balance Sale Consideration shall have been issued and delivered by the Vendor to the Vendor s solicitors for their onward transmission to the Purchaser s solicitors. (vi) In the event that the Purchaser obtains a loan from the financier to assist them in the payment of the Balance Sale Consideration, then notwithstanding any other provision herein, upon the Vendor receive the letter from the financier undertaking to pay the loan to the Vendor s solicitors upon the presentation at the relevant land office of the Transfer (as defined below) in favour of the Purchaser and the Memorandum of Charge in favour of the financier ( Financier s Letter of Undertaking ), the Purchaser s solicitors shall be authorised to forward to the financier or its solicitors the Transfer Documents subject to the condition that the differential sum between the balance of the Sale Consideration and the loan amount, if any ( Differential Sum ) shall have been paid to the Vendor s solicitors prior to the release of the Transfer Documents provided always nothing herein shall be interpreted to extend time for payment of the balance of the Sale Consideration beyond the Completion Period or the Extended Completion Period. 2.6 Expected net gain and utilisation of proceeds The expected gain from the Disposal is approximately RM18.2 million (net of tax payable); and The net proceeds of approximately RM18.6 million after payment of taxes and any related expenses arising from the Disposal are expected to be utilised for the working capital and/or repayment of bank borrowings of Tropicana and its group of companies ( Tropicana Group ). 2.7 Liabilities to be assumed by Purchaser There is no liability to be assumed, including any contingent liability and guarantee, by the Purchaser pursuant to the Disposal. 3. RATIONALE The rationales for the Disposal are: to realise gain via sale of Property and Car Park Equipment; and to raise funds as working capital and/or repayment of bank borrowings of Tropicana Group. The Disposal is also in line with Tropicana Group s de-gearing exercise to strengthen its financial footing. 4. EFFECTS OF THE DISPOSAL 4.1 Share capital and substantial shareholders shareholding The Disposal will not have any effect on the issued and paid-up share capital of Tropicana and the substantial shareholders shareholding in Tropicana, as the Disposal does not involve any issuance of shares in Tropicana. 4
4.2 Earnings, earnings per share, net assets per share and gearing The Disposal will not have significant effect on earnings per share and net assets per share of Tropicana for the financial year ending 31 December 2016. 5. APPROVALS REQUIRED There is no approval required for the Disposal. 6. INTERESTS OF DIRECTORS, MAJOR SHAREHOLDERS AND/OR PERSONS CONNECTED None of the Directors and/or major shareholders of Tropicana and its subsidiaries and/or persons connected to them have any interest, direct or indirect, in the Disposal. 7. DIRECTORS RECOMMENDATION The Board of Directors, having considered all aspects of the Disposal, is of the opinion that the Disposal is in the best interest of Tropicana. 8. HIGHEST PRECENTAGE RATIO The highest percentage ratio applicable to the Disposal pursuant to Paragraph 10.02(g) of the Bursa Malaysia Securities Berhad s Main Market Listing Requirements is approximately 0.8% based on the latest audited financial statements of Tropicana as at 31 December 2015. 9. ESTIMATED TIMEFRAME FOR COMPLETION Barring any unforeseen circumstances, the Disposal is expected to be completed in the 4 th quarter of 2016. 10. DOCUMENTS FOR INSPECTION The SPA is available for inspection by the shareholders of Tropicana at the registered office of Tropicana at Lot LG-A1, Lower Ground Floor, Tropicana City Mall, No. 3 Jalan SS20/27, 47400 Petaling Jaya, Selangor Darul Ehsan, during normal business hours from Mondays to Fridays (except public holidays) for a period of 3 months from the date of this announcement. This announcement is dated 1 September 2016. 5