Transactions (Chapter 10 Of Listing Requirements):Non Related Party Transactions
| Type | Announcement |
| Subject | TRANSACTIONS (CHAPTER 10 OF LISTING REQUIREMENTS) NON RELATED PARTY TRANSACTIONS |
| Description | SALCON BERHAD (“SALCON” or the “COMPANY”) Acceptance of Offer in relation to the proposed acquisition of lands in Daerah of Johor Bahru, Johor Darul Ta’zim by Nusantara Megajuta Sdn Bhd, a 50.01% subsidiary of Salcon (“Proposed Acquisition”) from Total Merit Sdn Bhd (“Offer”) |
1. INTRODUCTION On behalf of the Board of Directors of Salcon, AFFIN Investment Bank Berhad wishes to announce that Total Merit Sdn Bhd (“Total Merit” or “Vendor”) has today accepted an offer made by Nusantara Megajuta Sdn Bhd (“Purchaser”), a 50.01% subsidiary of Salcon, via a letter dated 8 November 2012 (“Letter of Offer”) to acquire 2 parcels of land totaling approximately 51,476 square metres held under HS(D) 482930, No. P.T.B. 22841 and HS(D) 482931, No. P.T.B. 22842 all located in the Daerah Johor Bahru, Bandar Johor Bahru, Negeri Johor Darul Ta’zim (collectively referred to as the “Sale Lands”) for a purchase consideration of RM99,699,104.16 (“Purchase Consideration”). By way of background information, the Vendor had on 15 August 2007 entered into a Development Agreement with the Government of the State of Johor Darul Ta’zim (“Johor State Government”) and the State Secretary Johor (Incorporation) (“SSI”), being the registered owner of the Sale Lands (the “Development Agreement”) whereby the Vendor has agreed to build and deliver the Consideration Premises (as defined in the Development Agreement) to the Johor State Government in return for which the rights to develop, inter-alia, the Sale Lands which have been alienated to the SSI by the Johor State Government and will be granted to the Vendor. The Vendor has represented that it will procure SSI’s consent to transfer the Sale Lands in favour of the Purchaser to facilitate the Proposed Acquisition. Presently, Jabatan Kerja Raya is in possession of the Sale Lands and under the Development Agreement, vacant possession of the Sale Lands can only be delivered by SSI once the Vendor has delivered the Consideration Premises. The Letter of Offer is subject to the execution of a definitive sale and purchase agreement (“SPA”) to be entered into between the Purchaser, SSI and Total Merit which will set out the full terms and conditions of the Proposed Acquisition on or before 7 December 2012, being 30 days from the date of acceptance of the Letter of Offer. A subsequent announcement will be made in accordance with Chapter 10 of the Main Market Listing Requirements of Bursa Malaysia Securities Berhad upon the execution of the SPA. 2. SALIENT TERMS OF THE LETTER OF OFFER The salient terms of the Letter of Offer are as follows: (i) The Purchase Consideration is payable in the following manner: (a) An earnest deposit of RM1,993,982.08 (equivalent to 2% of the Purchase Consideration) to be paid to the Vendor upon acceptance of the Letter of Offer and the same shall be treated as earnest deposit and part payment of the Purchase Consideration (“Earnest Deposit”); (b) A sum of RM7,975,928.33 (equivalent to 8% of the Purchase Consideration) to be paid to the Vendor upon execution of the SPA (“Balance Deposit”). The Balance Deposit together with the Earnest Deposit shall be treated as deposit and part payment of the Purchase Consideration; (c) Balance of RM89,729,193.75 (“Balance Purchase Price”) shall be paid in the following manner: (i) sum of RM15,729,193.75 only payable to the Vendor (by way of bank draft made in favour of the Vendor) within 14 days from the Unconditional Date (as defined in item 2(ii) below); (ii) within two (2) months from the receipt by the Purchaser’s solicitors of a duly valid and registrable memorandum of transfer for the Sale Lands in favour of the Purchaser (“MoT”) or two (2) months from the Unconditional Date (whichever is the later) but in any event not earlier than four (4) months from the date of the SPA (“Completion Period”) the Purchaser shall cause:- (aa) a Bank Guarantee / Performance Bond for the sum of RM56,000,000 only (“SSI BG”) to be issued in favour of SSI callable by SSI (and if not so called, callable by the Vendor) only after three (3) business days of delivery of vacant possession of the Sale Lands, such SSI BG to be issued by the Purchaser’s Bank upon the registration of the MoT and charge in favour of the Purchaser’s Bank. (The Purchaser shall cause a format of the said SSI BG to be delivered to the SSI together with an undertaking from the Purchaser’s Bank to cause the SSI BG to be issued upon the registration of the MoT and charge in favour of the Purchaser’s Bank, before the execution of the MoT) (bb) a Bank Guarantee / Performance Bond for the sum of RM18,000,0000 only (“Vendor’s BG”) to be issued in favour of the Vendor callable by the Vendor only after three (3) business days of delivery of vacant possession of the Sale Lands, such Vendor’s BG to be issued by the Purchaser’s Bank upon the registration of the MoT in favour of the Purchaser and charge in favour of the Purchaser’s Bank. The Balance Purchase Price shall be deemed to have been paid on the issuance of the SSI BG and Vendor’s BG. (d) The Purchaser shall be entitled to an extension of thirty (30) days from the expiration of the Completion Period to pay any part of the Balance Purchase Price and upon such extension the Purchaser shall pay late payment interest of 8% per annum on the balance outstanding from the expiration of the Completion Period till the date of deemed payment in the event of delay caused by the Purchaser; (ii) The purchase of the Sale Lands is subject to the approval of the shareholders of Salcon (“Condition Precedent”). The Purchaser will apply for the requisite shareholders’ approval within two (2) months from the date of the SPA (“Condition Period”) subject to the right of the Purchaser to an extension of a further one (1) month (“Extended Condition Period”) provided that the Purchaser shall pay the interest at the rate of 8% per annum on the Balance Purchase Price due to the Vendor, calculated from a day to day basis from the expiry of the Condition Period until the shareholders’ approval has been obtained. The date of obtaining such approval shall hereinafter be referred to as “Unconditional Date”. In the event the Condition Precedent cannot be fulfilled for any reason whatsoever within the Extended Condition Period, the Purchaser shall be entitled within the Extended Condition Period, to nominate a party in its place and failing such nomination, the Vendor shall be entitled to forfeit a sum equivalent to 5% of the Purchase Price (“Forfeiture Sum”) and thereafter all monies received by the Vendor after deducting the Forfeiture Sum shall be refunded to the Purchaser within ten (10) days from Extended Condition Period without interest; (iii) Vacant possession of the Sale Lands will be delivered to the Purchaser within twelve (12) months from the date of the SPA failing which the Vendor will pay a sum equivalent to 8% per annum of the Purchase Consideration calculated on a daily rest basis for every day of such delay in delivery; (iv) The Purchaser shall have no claim whatsoever in the Sale Lands and Earnest Deposit paid herewith shall be forfeited in the event that the Purchaser defaults in any of the terms of the Offer; and (v) The Purchaser shall be entitled at its absolute discretion to the remedies of specific performance and/or damages in lieu or liquidated damages equivalent to the Earnest Deposit in the event that the Vendor defaults in any of the terms of the Offer. 3. BACKGROUND INFORMATION ON TOTAL MERITTotal Merit is a private limited company incorporated in Malaysia on 20 August 2004 under the Companies Act, 1965 and having its registered office at Suite 801, (8th Floor), Merlin Tower, Jalan Meldrum, 80000 Johor Bahru. Its present authorised share capital is RM1,000,000 comprising 1,000,000 ordinary shares of RM1.00 each, of which RM900,000 comprising 900,000 ordinary shares of RM1.00 each have been issued and fully paid-up. The principal activity of Total Merit is property development. 4. RATIONALE FOR THE PROPOSED ACQUISITIONThe Proposed Acquisition is part of Salcon and its subsidiaries’ (“Group”) plan to diversify its revenue sources to reduce the Group’s sole dependency on its existing core business in the design, construction, operation and maintenance of water, sewerage and wastewater facilities and water concession business. The Group believes that the diversification into the property development industry, which has growth prospects, will be beneficial to the Group’s future prospects. 5. INTEREST OF DIRECTORS, MAJOR SHAREHOLDERS AND PERSONS CONNECTED TO THEMNone of the directors, major shareholders and persons connected to them has any interest, direct and/or indirect, in the Proposed Acquisition. 6. ADVISERAFFIN Investment Bank Berhad has been appointed as the adviser to Salcon for the Proposed Acquisition. 7. DOCUMENTS FOR INSPECTIONA copy of the Letter of Offer will be made available for inspection at the registered office of Salcon at 15th Floor, Menara Summit, Persiaran Kewajipan, USJ 1, 47600 UEP Subang Jaya, Selangor Darul Ehsan, during normal office hours on Mondays to Fridays (except public holidays) for a period of three (3) months from the date of this announcement. This announcement is dated 8 November 2012.
|
|
Announcement Info
| Company Name | SALCON BERHAD |
| Stock Name | SALCON |
| Date Announced | 8 Nov 2012 |
| Category | General Announcement |
| Reference No | MI-121108-AC88D |