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Reply to query |
| Reply to Bursa Malaysia's Query Letter - Reference ID |
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ZO-100825-52378 |
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| ADDITIONAL INFORMATION IN RESPECT OF THE ACQUISITION OF YIZHENG RONG XIN WASTEWATER TREATMENT COMPANY LIMITED BY JIANGSU SALCON WATER & ENVIRONMENTAL DEVELOPMENT COMPANY LIMITED, A 66.67% SUBSDIARY |
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Further to the announcement of 23 August 2010 and the letter from Bursa Malaysia Securities Berhad (“Bursa Securities”) dated 25 August 2010 in relation to the acquisition of Yizheng Rong Xin Wastewater Treatment Company Limited (“RXWT”) by Jiangsu Salcon Water & Environmental Development Company Limited, Salcon Berhad (“Salcon” or “the Company”) wishes to provide clarification and additional information as follows:-
I. Clarification Pertaining to the Announcement Released on 23 August 2010 (“Announcement”)
(a) the word “CA” used in Paragraph 3.5.1 of the Announcement is an abbreviation of “Concession Agreement”.
(b) the word “earnings” appears in Paragraph 8.3 of the Announcement should be “net assets” and the amended Paragraph 8.3 is as follows:-
8.3 Net Assets per Share
The Acquisition will not have any significant effect on the net assets per share of Salcon Group for the financial year ending 31 December 2010.
(c) Paragraph 3.4.1 shall read together with Paragraph 3.4.4 of the Announcement.
“other debts” as disclosed in Paragraph 3.4.1 of the Announcement and “other liabilities” as disclosed in Paragraph 3.4.4 (c) of the Announcement shall exclude the liabilities of up to RMB5 million to be assumed by the Purchaser.
II. Additional Information Requested by Bursa Securities
1. Information for Q1
(a) 1.49 times of net assets value (“NAV”) as at 31 December 2009 was derived as follows:-
Purchase Price of RMB44 million (approximately RM20.28 million) / NAV of RMB29.58 million (approximately RM13.64 million)
(b) 1.52 times of NAV as at 30 June 2010 was derived as follows:-
Purchase Price of RMB44 million (approximately RM20.28 million) / NAV of RMB29.03 million (approximately RM13.38 million)
The above premium over NAV was arrived after taking into the consideration the intense competition in water and wastewater business in the People’s Republic of China to secure a reasonable concession.
2. Information for Q2 and Q4
Based on the latest management accounts as at 30 June 2010, the amount of other liabilities/debts of RXWT is RMB10.09 million (approximately RM4.65 million).
Save for the bank borrowing of RMB21 million (approximately RM9.68 million) and other liabilities of up to RMB5 million (approximately RM2.31 million), which will be assumed by the Purchaser, the remaining liabilities/debts amounting to RMB5.09 million (approximately RM2.35 million) as at 30 June 2010 shall be settled by the Vendor prior to the Transfer Date.
The details of the remaining liabilities/debts amounting to RMB5.09 million (approximately RM2.35 million) to be settled by the Vendor prior to the Transfer Date are largely made up of operating expenses and overheads.
However, the actual amount of the remaining liabilities/debts to be settled by the Vendor prior to the Transfer Date cannot be quantified at this juncture.
3. Information for Q3
The amount of cash in hand and deposit in bank of RXWT based on the latest management accounts as at 30 June 2010 and the latest audited accounts as at 31 December 2009 are as follows:-
30 June 2010 31 December 2009
Cash in Hand and RMB2.06 million RMB4.15 million
Deposit in Bank (approximately (approximately
RM0.95 million) RM1.91 million)
4. Information for Q5
The amount of treatment fee outstanding from the People’s Government of Yizheng, based on the latest audited account as at 31 December 2009 and latest management accounts as at 30 June 2009, which is to be settled by its Finance Department is as follows:-
30 June 2010 31 December 2009
Amount of Outstanding RMB806,000 RMB4.32 million
Treatment Fee (approximately (approximately
RM371,566) RM1.99 million)
5. Information for Q6
Subject to the completion of the Acquisition, the expansion of the wastewater treatment plant from 25 MLD to 50 MLD is expected to be commenced in October 2010 and completed by 31 January 2011.
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We refer to your Company's announcement dated 23 August 2010 in respect of the
above mattter.
In this connection, kindly furnish Bursa Malaysia Securities Berhad ("Bursa
Securities") with the following additional information for public release:-
The basis in arriving at 1.49 times and 1.52 times of the NAV of RXWT as at 31
December 2009 and 30 June 2010 respectively.
The amount of RXWT's other debts that will be settled in full by the vendor
prior to the Transfer Date.
The amount of RXWT's cash in hand and deposit in bank respectively based on
RXWT's latest management accounts as at 30 June 2010 and latest audited
accounts as at 31 December 2009.
The details of RXWT's other liabilities that will be settled by the vendor
prior to the Transfer Date and the amount thereof.
The amount of treatment fee outstanding from the People's Government of
Yizheng, based on RXWT's latest audited accounts as at 31 December 2009 and
latest management accounts as at 30 June 2010 which is to be settled by the
Finance Department of the People's Governement of Yizheng.
The expected commencement and completion date of expansion of the WWTP from 25
MLD to 50 MLD.
Please furnish Bursa Securities with your reply via an announcement within one
(1) market day from the date hereof.
Yours faithfully
TAN YEW ENG
Head, Issuers
Listing Division, Regulation
TYE/ZOOS
c.c.General Manager & Head, Market Surveillance Department, Securities
Commission (via fax) |
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