Acquisition Of Property By Salcon Building Services Sdn. Bhd.
BackAug 03, 2007
| General Announcement |
| Reference No CC-070802-61364 |
| Company Name |
:
|
SALCON BERHAD |
| Stock Name |
:
|
SALCON |
| Date Announced |
:
|
03/08/2007 |
 |
|
|
| Type | : | Announcement |
| Subject | : | ACQUISITION OF PROPERTY BY SALCON BUILDING SERVICES SDN. BHD. |
Contents :
1. INTRODUCTION
The Board of Directors of Salcon Berhad ("Salcon" or "the Company") is pleased to announce that Salcon Building Services Sdn. Bhd. ("SBS"), a wholly-owned subsidiary of Bumi Tiga Enterprise Sdn. Bhd. which in turn is a wholly-owned subsidiary of Salcon Engineering Berhad ("SEB") and SEB is a wholly-owned subsidiary of Salcon, had on 3 August 2007 entered into a Sale and Purchase Agreement ("the Agreement") with Amway (Malaysia) Sdn Bhd (Company No. 22062-P) ("Amway"), in respect of the acquisition of property for a total consideration of RM13,500,000/- (Ringgit Malaysia Thirteen Million Five Hundred Thousand) only ("Purchase Price").
2. DETAILS OF THE ACQUISITION
2.1. Information of the Property
The Property is a piece of land held under H.S.(D) 175343 PT 34, Jalan 223, Section 20, Bandar Petaling Jaya, Selangor (formerly QTR 5855, Lot 34, Jalan 223, Section 20 Town Petaling Jaya, Selangor) measuring approximately 5,931.665 square metres together with a building erected thereon. The original cost of the Property is RM8.04 million.
The Property is currently used as a office and warehouse.
By the Agreement, SBS has agreed to purchase and Amway has agreed to sell the Property free from all encumbrances subject to the following:-
(i) the conditions of title expressed or implied; and
(ii) the existing "as is where is" condition of the Property
upon the terms and conditions as stipulated in the Agreement.
The Land is subject to a lease by Tenaga Nasional Berhad for 30 years from 17 May 1989 to 16 May 2019 (hereinafter referred to as "the Tenaga Lease"). Amway shall use its best endeavours to obtain the consent for the sale of the Land from Tenaga Nasional Berhad as the lessee of the Tenaga Lease ("Tenaga Consent") subject to the terms as stipulated in the Agreement.
Subject to the completion of the Agreement, the Property would be rented to Amway for a fixed period of two (2) years or until 31 December 2009 whichever shall first occur commencing on the commencement date as set out in the Tenancy Agreement at a rental of RM101,250/- per month with an option to renew for a further one (1) year at the same rental.
The building is approximately 19 years. The land is a leasehold land of 99 years and expiring 22 August 2070.
The latest valuation of the Property was made by HASB Consultants Sdn. Bhd. on 25 June 2007 for a market value of RM13.1 million. The net book value of the Property as at 31 December 2006 is RM5.74 million.
The Property is acquired free from encumbrances.
The Property is a piece of land held under H.S.(D) 175343 PT 34, Jalan 223, Section 20, Bandar Petaling Jaya, Selangor (formerly QTR 5855, Lot 34, Jalan 223, Section 20 Town Petaling Jaya, Selangor) measuring approximately 5,931.665 square metres together with a building erected thereon. The original cost of the Property is RM8.04 million.
The Property is currently used as a office and warehouse.
By the Agreement, SBS has agreed to purchase and Amway has agreed to sell the Property free from all encumbrances subject to the following:-
(i) the conditions of title expressed or implied; and
(ii) the existing "as is where is" condition of the Property
upon the terms and conditions as stipulated in the Agreement.
The Land is subject to a lease by Tenaga Nasional Berhad for 30 years from 17 May 1989 to 16 May 2019 (hereinafter referred to as "the Tenaga Lease"). Amway shall use its best endeavours to obtain the consent for the sale of the Land from Tenaga Nasional Berhad as the lessee of the Tenaga Lease ("Tenaga Consent") subject to the terms as stipulated in the Agreement.
Subject to the completion of the Agreement, the Property would be rented to Amway for a fixed period of two (2) years or until 31 December 2009 whichever shall first occur commencing on the commencement date as set out in the Tenancy Agreement at a rental of RM101,250/- per month with an option to renew for a further one (1) year at the same rental.
The building is approximately 19 years. The land is a leasehold land of 99 years and expiring 22 August 2070.
The latest valuation of the Property was made by HASB Consultants Sdn. Bhd. on 25 June 2007 for a market value of RM13.1 million. The net book value of the Property as at 31 December 2006 is RM5.74 million.
The Property is acquired free from encumbrances.
2.2. Basis of Determining the Purchase Price
The Purchase Price of RM13,500,000/- (Ringgit Malaysia Thirteen Million Five Hundred Thousand) only was arrived at on a willing-buyer and willing-seller basis.
The Purchase Price of RM13,500,000/- (Ringgit Malaysia Thirteen Million Five Hundred Thousand) only was arrived at on a willing-buyer and willing-seller basis.
2.3. The Salient Terms of the Agreement
2.3.1 Terms of Payment and Completion Period
(a) The deposit of 10% or RM1.35 million was paid to Amway upon signing of the Agreement.
(b) The balance sum of 90% of the Purchase Price or RM12.15 million shall be paid to Amway
? Within 60 days after the date of Tenaga Consent; or
? On the date on which the Final Title for the Land is
received
whichever shall be later.
2.3.2 Source of Funding
The Purchase Price will be satisfied by way of bank borrowings and internally generated funds. The proportion of funding has yet to be decided at this juncture.
2.3.4 Liabilities to be assumed
There are no liabilities to be assumed by Salcon for the Acquisition.
3. INFORMATION ON SALCON BUILDING SERVICES SDN. BHD. ("SBS")
SBS is a company incorporated in Malaysia having its registered office at 15th Floor, Menara Summit, Persiaran Kewajipan, USJ 1, 47600 UEP Subang Jaya, Selangor.
The authorized share capital of SBS is RM5,000,000/- comprising of 5,000,000 ordinary shares of RM1/- each, of which 1,400,000 ordinary shares of RM1/- each have been issued and fully paid-up. SBS is a wholly-owned subsidiary of Bumi Tiga Enterprise Sdn. Bhd. Bumi Tiga Enterprise Sdn. Bhd. in turn, is a wholly-owned subsidiary of Salcon Engineering Berhad ("SEB") and SEB is a wholly-owned subsidiary of Salcon.
The authorized share capital of SBS is RM5,000,000/- comprising of 5,000,000 ordinary shares of RM1/- each, of which 1,400,000 ordinary shares of RM1/- each have been issued and fully paid-up. SBS is a wholly-owned subsidiary of Bumi Tiga Enterprise Sdn. Bhd. Bumi Tiga Enterprise Sdn. Bhd. in turn, is a wholly-owned subsidiary of Salcon Engineering Berhad ("SEB") and SEB is a wholly-owned subsidiary of Salcon.
4. INFORMATION ON AMWAY (MALAYSIA) SDN. BHD. (AMWAY)
Amway is a company incorporated in Malaysia having its registered office at Level 7, Setia 1, 15, Lorong Dungun, Damansara Heights, 50490 Kuala Lumpur. Amway is a wholly-owned subsidiary of Amway (Malaysia) Holdings Berhad.
5. RATIONALE FOR THE ACQUISITION
The Acquisition of Property is for future own use.
6. RISK FACTORS
Salcon does not foresee any adverse material risk that would have significant impact to the financial of the Group as the result from the Acquisition.
7. PROSPECTS
The Acquisition of the Property will be for future own use.
8. FINANCIAL EFFECTS OF THE ACQUISITION
8.1 Share Capital and Major Shareholders
The Acquisition does not have any effect on the issued and paid-up share capital and major shareholding structure of Salcon.
The Acquisition will not have any material effect on the earnings of the Group for the financial year ending 31 December 2007.
The Acquisition will not have any significant impact on the NA of the Group for the financial year ending 31 December 2007.
8.4 Gearing
The Acquisition of the Property would not have any material impact on the gearing of the Group.
9. INTEREST OF DIRECTORS AND MAJOR SHAREHOLDINGS AND PERSONS
CONNECTED TO THEM
None of the Directors and /or Major Shareholders of the Company and / or persons connected to them, has any interest, whether direct or indirect, in the above Acquisition.
10. APPROVAL OF SHAREHOLDERS AND AUTHORITIES
The Acquisition is not subject to approval of shareholders and any relevant government authorities in Malaysia.
11. DEPARTURE FROM THE SECURITIES COMMISSION'S GUIDELINES
To the best of its knowledge and belief, the Board of Directors of Salcon confirms that there is no departure from the Policies and Guidelines on Issue/Offer of Securities issued by the Securities Commission in undertaking the Acquisition.
12. STATEMENT BY DIRECTORS
The Directors of Salcon, having taken into consideration the rationale and all relevant aspects of the Acquisition, is of the opinion that the Proposed Acquisition is in the best interest of the Company and its shareholders.
13. ESTIMATED TIME FRAME FOR COMPLETION
Completion shall be deemed to have been satisfied and discharged upon full payment in
accordance with the Agreement.
14. DOCUMENT FOR INSPECTION
A copy of the Agreement is available for inspection at the registered office of Salcon at
15th Floor, Menara Summit, Persiaran Kewajipan, USJ 1, 47600 UEP Subang Jaya,
Selangor during normal office hours from Monday to Friday (except public holidays) for
a duration of three (3) months from the date of this announcement.
This announcement is dated 3 August 2007