Purchase of subsidiary company - Golden Envoy (M) Sdn Bhd
Announcement Details/Table Section :
1.0 Introduction
1.1 The Board of Directors of RPB wishes to announce that Meridian Haven Sdn Bhd (MHSB), the wholly-owned subsidiary of RPB has entered into a Share Sale Agreement with Mohammad Zawani Bin Abd. Wahab and Azizul Nizam Bin Bidin on 31 March 2011 for the purchase of Golden Envoy (M) Sdn Bhd (GESB), a company incorporated in Malaysia pursuant to the Companies Act 1965 for a total cash consideration of RM13 million.
1.2 GESB is principally engaged in building construction and property development and had signed an Agreement on 30 January 1999 with Lembaga Kemajuan Johor Tenggara (LKJT) to develop 165.881 acres of land at Bandar Tenggara, Mukim Ulu Sungai Johor.
2.0 The proposed acquisition
2.1 Details of the proposed acquisition :
2.1.1 The entire issued and paid up capital of GESB comprising 4,000,000 ordinary shares of RM1.00 each (Sale Shares)
2.1.2 Salient terms and conditions of the proposed Share Sale :
Terms of payment
a.
Deposit
RM2 Million
Upon execution of Share Sale Agreement
b.
Balance of Purchase Price
RM11 Million
On or before the completion date (ie. the day falling 1 month after the unconditional date)
2.1.3 Condition precedent
a. The approval of the board of directors of MHSB of the purchase in respect of the acquisition of the Sale Shares
b. The completion of Due Diligence satisfactory to the purchaser.
c. The completion of Vialibity Studies
2.2 Basis of arriving at the purchase price
The purchase price is derived after taking into account the Market and Project Development Study for the development by Henry Butcher, an independent firm of registered valuer, as well as the Financial Analysis of the Company by AljeffriDean, a Chartered Accountant firm.
2.3 Source of funds and mode of satisfaction
The purchase price will be funded through internally generated funds and / or bank existing facilities.
2.4 Liabilities to be assumed by RPB
RPB will not assume any liabilities pursuant to the proposed acquisition of the Share Sale other than that disclosed in the latest audited account as at 30th Sept 2010 of GESB.
3.0 Rationale of the proposed acquisition
3.1 The proposed acquisition is consistent with the investment and development objective and strategy of the Property Division of RPB Group.
3.2 The proposed acquisition will widen the portfolio to include mixed developments which is expected to benefit the Property Division in the long term.
4.0 Effect of the acquisiton
4.1 EPS
The proposed acquisition is expected to contribute positively to the future earning of the group.
4.2 Net asset
The proposed acquisition will have no impact or changes to the net asset per share of the group
4.3 Gearing
The purchase price is to be satisfied by internally generated funds and / or existing bank facilities. Therefore the impact to gearing is insignificant.
4.4 Share capital and substantial shareholders’ shareholding
The proposed transaction will not have any effect on the share capital and substantial shareholders’ shareholding of the company as the proposed acquisitiondoes not involve any issuance of shares.
5.0 Approval required The acquisition is not subject to the approval of the shareholders of the company and any relevant authorities
6.0 Estimated time frame for completion
6.1 Baring any unforeseen circumstances, the Board of RPB expect the proposed acquisition to be completed within two months.
7.0 Interest of directors, major shareholders and / or persons connected to them
7.1 None of the directors, major shareholders of RPB and / or persons connected to them has any interest, direct or indirect in the proposed acquisition.
8.0 Risk factors
8.1 There is no risk factors attached to the purchase except that it may be subjected to the market condition.
9.0 Documents for inspection
9.1 The Agreement is available for insepction at RPB’s registered office at Block A, Unit A-5-3, Megan Avenue II, 12 Jalan Yap Kwan Seng, 50450 Kuala Lumpur, Malaysia during normal office hours from Monday to Friday (except public holidays) for a period of three months.