GENERAL ANNOUNCEMENT PJBUMI BERHAD DISPOSAL OF PROPERTY 1. INTRODUCTION PJBumi Berhad ( the Company or PJBumi or the Vendor ) wishes to announce that the Company has entered into a Sale and Purchase Agreement ( SPA ) with Northern Jewel Sdn. Bhd. (Company No. : 964993-K) ( the Purchaser ) on 7 th January 2016 to dispose a piece of land (hereinafter referred to as the Property ) for a total consideration of RM4,000,000.00 (Ringgit Malaysia : Four Million Only). 2. DETAILS OF THE PROPERTY A description of the Property is as follows :- (i) The postal address or identification HS(D) 35971 PT 60595 Mukim Sungai Petani, Daerah Kuala Muda, Kedah with an area measuring approximately 20291 sq meter, equivalent to 218,392 sq feet. (ii) A brief description The Property is a piece of land. (iii) The existing use (whether rented out or own use) and proposed use The property is a vacant land and for own use. (iv) Terms of the tenure; if leasehold, the expiry date of the lease The property is a freehold land (v) Whether any valuation was carried out on the real estate; if so, the name of the independent registered valuer, date and method of valuation and quantification of the market value There was no recent valuation report carried out on the property. The last valuation was carried out on 15 th March 2013 by W.M.Malik & Kamaruzaman using comparison method of valuation. The property was valued at RM3,300,000.00. - 1 -
(vi) The net book value based on latest audited financial statements The net book value for the property on the latest audited financial statements ending 31 December 2014 is RM3,300,000.00. (vii) The encumbrances, if any. The Property is currently charged to RHB Bank Berhad (hereinafter referred to as the Chargee ) under Charge presentation Nos. 4313/2002, 30452/2002, 24938/2004 & 24939/2004 as security for banking facility granted by the Chargee. 3. INFORMATION ON THE DISPOSAL Details of the Purchaser Northern Jewel Sdn Bhd (Company No. : 964993-K) is a private limited company incorporated in Malaysia on 20 October 2010 and it is currently a dormant company. Its registered address is located at 1 st Floor, B2 & B3, Jalan Bakar Arang, 08000 Sungai Petani, Kedah. 4. TOTAL CONSIDERATION a) Basis of arriving at the sale consideration The Consideration was arrived at on a willing buyer-willing seller basis after arm s length negotiation between the parties and on normal commercial terms by reference to the prevailing market price of comparable properties and properties at nearby location. b) Justification for the consideration The purchaser s offer price is competitive and within the market price of properties of nearby location. c) The sale consideration of RM4,000,000.00 shall be satisfied as follows :- a) A sum of Ringgit Malaysia One Million and Five Hundred Thousand (RM1,500,000.00) Only by way of deposit and part payment of the total purchase price shall be paid by the Purchaser upon the execution of SPA to the Pruchaser s Solicitors as Stakeholder. The Purchaser s Solicitors are authorized to deal with the purchase price paid in the following manner :- (i) A sum of Ringgit Malaysia Two Hundred and Eighty Thousand (RM280,000.00) Only being seven percent (7%) of the total purchase price shall be paid to the Vendor as deposit to account of the total purchase price; - 2 -
(ii) a sum of Ringgit Malaysia One Million and One Hundred Thousand (RM1,100,000.00) only being twenty seven point five percent (27.5%) of the total purchase price shall be paid to the Chargee within seven (7) days from the date of receipt by the Purchaser s Solicitors of a letter of undertaking cum redemption statement from the Chargee addressed to the Purchaser confirming that the outstanding redemption sum is less than the balance purchase price; In the event that the outstanding redemption sum exceeds the balance purchase price, the Vendor shall make payment of the differential sum to the Chargee and procure a revised letter of undertaking cum redemption statement from the Chargee, the Purchaser s Solicitors shall release the sum of Ringgit Malaysia One Million and One Hundred Thousand (RM1,100,000.00) to the Chargee within seven (7) days from the date of receipt of the revised letter of undertaking cum redemption statement; and (iii) The balance sum of Ringgit Malaysia One Hundred and Twenty Thousand (RM120,000.00) Only (hereinafter referred to as the said Retention Sum being three percent (3%) of the total purchase price) shall be forwarded to Inland Revenue Board to account of Real Property Gains Tax payable by the Vendor in respect of the disposal of the said Property. Should any portion of the said Retention Sum paid be refunded by the Inland Revenue Board to the Purchaser, such refunded sum shall be paid by the Purchaser to the Vendor within fourteen (14) days from the date of receipt of same. For the purpose of this clause, the Vendor agree and undertake to procure the letter of undertaking cum redemption statement or the revised letter of undertaking cum redemption statement, as the case may be, within one (1) month from the date of the SPA. b) The balance purchase price shall be paid within four ( 4 ) months from the date of execution of the SPA or one (1) month after the receipt by the Purchaser s Solicitors of the certificate of practical completion for the construction of the said Road and the said Drainage, whichever happen later with an automatic extension of a further duration of one (1) month subject to payment of agreed interest at the rate of six percent (6.0%) per annum on the outstanding balance purchase price calculated on a daily basis during the period of extension and shall accrue from day to day and payable on the date of full payment of the balance purchase price by the Purchaser (hereinafter referred to as The Completion Date ) to the Vendor s Solicitors as Stakeholder and such payment if made by cheque in favour of the Vendor's Solicitors, the receipt of the said cheque shall be sufficient discharge to the Purchaser of such payment subject to - 3 -
clearance of the said cheque. The Purchaser shall pay the Bank Commission incurred, if any. c) The Vendor s Solicitors are authorized by the parties hereto to deal with the balance purchase price in the following manner and priority :- (i) (ii) Firstly to settle for and on behalf of the Vendor all sums and fees payable for the purpose of discharging any charge(s), encumbrances and caveats (if any) over the said Property save and except for those encumbrances and caveats created by the Purchaser, the Purchaser s financier and/or due to or for the benefit of the Purchaser; Secondly to settle for and on behalf of the Vendor all fees, charges, expenses and other payments, if any, payable by the Vendor by virtue of these presents; (iii) Thirdly to release the differential sum between the balance purchase price and the loan amount paid to the Vendor; and (iv) Lastly to release the remaining balance thereof to the Vendor after deduction of agreed liquidated damages for late delivery (if any) and upon delivery of vacant possession of the said Property to the Purchaser. 5. THE EFFECT OF THE TRANSACTION ON PJBUMI a) Earning per share The Proposed Disposal of Lands is not expected to have any effects on the earnings and EPS of PJBUMI Group for the FYE 31 December 2015 in view that the Proposed Disposal of Lands is expected to be completed by the second quarter of 2016. However, the Proposed Disposal of Lands is expected to improve the earnings and EPS of the Company for the FYE 31 December 2016. The calculation of the net gain from the Proposed Disposal of Lands is as follows: RM 000 Disposal Consideration 4,000 Less: (i) Net book value of the Land 3,300 (ii) Estimated expenses for the Proposed Disposal of Lands 339 (iii) Real property gains tax 183 Net gain from the Proposed Disposal of land 178-4 -
For the purpose of illustration only, based on the audited consolidated financial statements of PJBumi for the FYE 31 December 2014 and assuming that the Proposed Disposal of Lands is completed on 1 January 2015, being the beginning of the financial year of PJBumi, the proforma effects of the Proposed Disposal of Lands on the consolidated earnings and EPS of PJBumi are as follows: Audited profit after tax attributable to the owners of the parent of the Company Add : Proforma gain from the proposed disposal of land Adjusted audited profit after tax attributable to the owners of the parent of the Company Proforma consolidated earnings Proforma consolidated EPS* 1,851 3.70 178 0.35 2,029 4.05 Note: Based on the total issued and paid-up share capital of PJBumi of 50,000,000 as at 31 December 2014. b) Net assets per share and Gearing Audited as at FYE 31 December 2014 Proforma Effect After the Proposed Disposal RM 000 RM 000 Share capital 25,000 25,000 Reserves 12,605 12,605 Accumulated losses (17,639) (i) (17,461) Shareholder s fund / NA 19,966 20,144 Net assets per share (sen) 39.93 40.29 Total borrowings (interest bearing debts) 8,884 (ii) 6,799 Gearing ratio (times) 0.44 (iii) 0.34 Notes:- (i) After taking into account the estimated net gain on disposal of approximately RM178,000 arising from the Proposed Disposal. - 5 -
(ii) After taking consideration the repayment of the term loan outstanding with RHB of RM2,084,786. (iii) Calculated based on total interest-bearing borrowings divided by the corresponding shareholders funds. c) Share capital and substantial shareholders shareholding The disposal of property is not expected to have any impact on the share capital and substantial shareholders shareholding as the Disposal does not involved any issuance of the Company s share. d) The disposal of the property is not expected to have any material effect on the operation aspect of the Group. 6. FINANCIAL EFFECTS OF THE SALE TRANSACTION a) The expected profit on the proposed disposal is RM 177,755. b) The sale proceed of RM 4,000,000.00 shall be shall be utilised in the manner as set out below: Proposed Utilisation Note RM 000 Expected utilisation timeframe Repayment of bank borrowing (i) 2,080 Immediate Estimated expenses in relation to the Proposed Disposal (ii) 339 Within one (1) month Estimated tax payable (iii) 183 Within two (2) months Repayment of creditor (iv) 1,398 Within three (3) months Notes: i) PJBumi intends to utilize approximately RM2,080,000 of the Disposal Consideration for the full settlement of the term loan with RHB to enable the discharge of the Property. The term loan outstanding as at the date of this announcement is approximately RM2,080,000. ii) The estimated expenses consist of professional fees, fees payable to authorities, expenses relating to infra work for the land and other incidental expenses. Any variation in the actual amount of the estimated expenses will be adjusted against the portion of the Disposal Consideration to be utilised for repayment of creditor and vice versa. iii) Computed based on Real Property Gain Tax rate of 5% for the disposal more than five (5) years after the date of acquisition of the Property. iv) Repayment of outstanding creditors and for on-going operational activities. c) There are no liabilities, including contingent liabilities and guarantees, to be assumed by the Purchaser. - 6 -
7. APPROVAL REQUIRED The Disposal is not subject to the approval of PJBumi shareholders and relevant governmental authorities. 8. DIRECTORS AND MAJOR SHAREHOLDERS INTEREST None of the Directors and/or major shareholders of the Company or persons connected with a Director or major shareholder of the Company has any interest, direct or indirectly, in the proposed disposal. 9. RATIONALE FOR THE DISPOSAL The Proposed Disposal provides an opportunity for the Company to unlock the immediate value of the Property which is currently not generating any income for the Group. The Board is of the opinion that the Proposed Disposal is in the best interest of PJBumi as the Proposed Disposal will enable PJBumi to reduce certain bank borrowings and the balance to repay its creditors. 10. SALIENT TERMS OF THE AGREEMENTS / DOCUMENTS FOR INSPECTION The salient terms of the Agreements are as follows :- a) the date of the Agreement : 7 th January 2016 b) the name of the Vendor : PJBumi Berhad c) the name of the Purchaser : Northern Jewel Sdn. Bhd. d) the Description of the property : all that piece of land currently known as HS(D) 35971 PT 60595 Mukim Sungai Petani, Daerah Kuala Muda, Kedah with an area measuring approximately 20291 sq meter, equivalent to 218,392 sq feet. e) Consideration : RM4,000,000.00 f) Conditions of sale : (i) The Vendor shall deliver registrable title of the said Property sold and any defect in title shall be rectified at the expense of the Vendor; (ii) the Vendor shall at their own cost and expenses within two (2) months from the date of the execution of this Agreement commence the - 7 -
construction of an access road measuring approximately 40 feet by 800 feet (hereinafter referred to as the said Road ) with drainage of two (2) feet wide five (5) feet deep more accurately described by the portion colour red in the plan annexed hereto marked as Schedule 1 (hereinafter referred to as the said Drainage ) and complete the same within four (4) months from the date of this agreement; (iii) The Purchaser shall contribute a sum of Ringgit Malaysia Fifty Thousand (RM50,000-00) only towards the costs of the construction of the said Road and such payment shall be paid by the Purchaser to the Vendor on or before the Completion Date; (iv) The Purchaser shall at their own cost and expenses construct the drainage serving the said Property; (v) Upon the completion the construction of the said Road and the said Drainage, the Vendor shall deliver to the Purchaser s Solicitors a certificate of practical completion issued by the consultant engineer certifying that the construction of the said Road and the said Drainage has been completed. 11. DOCUMENTS AVAILABLE FOR INSPECTION The SPA is available for inspection at the Registered Office of PJBumi at Level 15-2, Bangunan Faber Imperial Court, Jalan Sultan Ismail, 50250 Kuala Lumpur during normal office hours from Monday to Friday (except public holidays) for a period of three (3) months from the date of this announcement. 12. DIRECTORS STATEMENT The Board, having considered all aspect of the disposal, is of the opinion that the disposal is in the best interest of the Company. 13. ESTIMATED TIME FRAME FOR THE COMPLETION The estimated time frame for the completion of the transaction is six (6) months. 14. PERCENTAGE RATIO The highest percentage ratio applicable for the Disposal pursuant to Chapter 10.06 of the Main Market Listing Requirement of Bursa Securities is 20.03%. This announcement is dated 7 th January 2016. - 8 -