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The Board of Directors of Tien Wah ("Board") wishes to announce
that its wholly-owned subsidiary i.e. TWProp ("Company No.
428504-A") had on 27 January 2011 entered into a Sale and Purchase
Agreement ["SPA"] with Daijin Tech (M) Sdn Bhd (Company
No. 663138-K) ["DTM"] to sell to DTM all that piece
of freehold land held under GM 2119 for Lot 5007 in the Mukim
of Kapar, Daerah Klang, Negeri Selangor in area measuring approximately
12,140.55 square meters together with the buildings erected therein
bearing postal address known as Lot 5007, Batu 5, Jalan Meru,
41050 Klang ["Property"] for a total purchase
price of Ringgit Malaysia Nine Million and Two Hundred Thousand
(RM9,200,000.00) only ["Transaction"].
1. INFORMATION ON TWPROP AND DTM
TWProp is a limited company incorporated on 23 April 1997 under
the Companies Act, 1965 with a present authorised share capital
of RM2.00 comprising 2 ordinary shares of RM1.00 each and an issued
and paid-up share capital of RM2.00 comprising 2 ordinary shares
of RM1.00 each. TWProp is a wholly-owned subsidiary of Tien Wah.
The Directors of TWProp are Tengku Mahaleel Bin Tengku Ariff,
Mr Ong Kiok Teng and Mr Ong Liang Win.
TWProp's principal business activity is investment property holding.
DTM is a limited company incorporated on 17 August 2004 under
the Companies Act, 1965 with a present authorised share capital
of RM1,000,000.00 comprising of 1,000,000 ordinary shares of RM1.00
each and an issued and paid-up share capital of RM600,000.00 comprising
of 600,000 ordinary shares of RM1.00 each.
The Directors of DTM are Ahn Dong Jin and Linda Patricia Lim
Sooi Hong.
DTM's principal business activity is manufacturer of metal stamping.
2. DETAILS OF THE TRANSACTION
(a) Particulars of the Property
TWProp is the registered proprietor and beneficial owner of all
that piece of freehold land held under GM 2119 for Lot 5007 in
the Mukim of Kapar, Daerah Klang, Negeri Selangor in area measuring
approximately 12,140.55 square meters together with the buildings
erected therein bearing postal address known as Lot 5007, Batu
5, Jalan Meru, 41050 Klang.
The Property as at the date of the SPA is being charged to Oversea-Chinese
Banking Corporation Limited vide presentation no. 9284/2008 ["Existing
Charge"].
A portion of the Property is at the date of the SPA leased to
Tenaga Nasional Berhad vide presentation no. 3209/1992 for a period
of 30 years from 2 November 1991 and expiring on 1 November 2021
["Existing Lease"].
The Property is currently tenanted to Paper Base Converting Sdn
Bhd (Company No. 398112-V) vide a Tenancy Agreement dated the
1 September 2009 ["Tenancy"] at a monthly
rental of RM49,725-00 only for a period of three (3) years expiring
on the 31 August 2012 wherein a sum of RM174,037-50 has been paid
to TWProp as rental and utility deposits.
(b) Basis of arriving at the consideration, justification for
the consideration and manner in which the consideration will be
satisfied
TWProp has agreed to sell and DTM has agreed to purchase the
Property on an "as-is-where-is" basis with the fixtures and
fittings stated in the SPA free from all encumbrances without
vacant possession and subject to the Tenancy and to all conditions
expressed or implied in the issue document of title of the Property
and upon the terms and subject to the conditions contained in
the SPA
(c) Salient features of the SPA and valuation report
-Terms of payment
The total purchase price for the Property is the sum of Ringgit
Malaysia Nine Million and Two Hundred Thousand (RM9,200,000.00)
only ["Purchase Price"].
The SPA is in consideration of the following:-
(i) the sum of Ringgit Malaysia One Hundred and Eighty Four Thousand
(RM184,000-00) only paid by DTM as earnest moneys prior to the
execution of the SPA;
(ii) the sum of Ringgit Malaysia One Hundred and Eighty Four
Thousand (RM184,000-00) only which is equivalent to 2% of the
Purchase Price now paid by DTM to its solicitors as stakeholders
for the purpose of compliance with the Real Property Gains Tax
Act pursuant to Clause 16 of SPA; and
(iii) the sum of Ringgit Malaysia Five Hundred and Fifty Two
Thousand (RM552,000-00) only now paid by DTM to TWProp by way
of deposit and towards account of the Purchase Price
-Completion
The balance of the Purchase Price amounting to Ringgit Malaysia
Eight Million Two Hundred and Eighty Thousand (RM8,280,000-00)
only (hereinafter referred to as "the Balance Purchase Price";)
shall be paid by DTM and/or DTM's Financier (as the case may be)
to TWProp's solicitors as stakeholders within ninety (90) days
from the date of the SPA (hereinafter referred to as "the
Completion Date") PROVIDED ALWAYS that if DTM shall
be unable to pay the Balance Purchase Price within the Completion
Date, the Vendor shall automatically grant to the Purchasers and
the Purchasers shall be entitled without request to an extension
to the Completion Date for a period of thirty (30) days commencing
the day immediately following the expiry of the Completion Date
(hereinafter referred to as "the Extended Completion
Date") and in consideration thereof DTM shall pay to
TWProp interest on the Balance Purchase Price or any part thereof
outstanding and remaining unpaid at the rate of ten per centum
(10%) per annum on a daily basis calculated from the commencement
of the Extended Completion Date until the date of full payment
thereof PROVIDED further that all interest (if any) payable by
DTM to TWProp pursuant to this clause shall be paid by the DTM
to TWProp simultaneously with the payment of the Balance Purchase
Price.
(d) Highest percentage ratio applicable to the Transaction
The highest percentage ratio applicable to the Transaction based
on the Audited Financial Statements of Tien Wah for the financial
year ended 31 December 2009 pursuant to paragraph 10.02(g) of
the Main Market Listing Requirements of Bursa Malaysia Securities
Berhad is 5.9%.
(e) Net book value of the Property
The net book value of the Property as at the last audited accounts
as at 31 December 2009 stood at RM7,712,412.
3. LIABILITIES TO BE ASSUMED
None
4. ORIGINAL COST OF INVESTMENT AND DATE OF SUCH INVESTMENT
The property was acquired on 22 August 2006 at a purchase value
of RM8,140,941.
5. FINANCIAL INFORMATION ON THE PROPERTY
The gain on disposal of the property based on the last audited
accounts as at 31 December 2009 is at RM1,487,588 before defraying
estimated expenses of RM280,000.
6. FINANCIAL EFFECTS OF THE TRANSACTION
The Transaction is not expected to have any material effect on
the earnings per share, net assets per share, share capital and
substantial shareholders' shareholding of the Tien Wah Group for
the financial year ending 31 December 2010.
7. APPROVALS REQUIRED
The Transaction is not expected to require the shareholders'
approval of Tien Wah or approval from any regulatory bodies.
8. DIRECTORS AND/OR MAJOR SHAREHOLDERS AND/OR PERSONS CONNECTED
None of the Directors and/or major shareholders and/or persons
connected with them has any interest, direct or indirect, in the
Transaction.
9. RATIONALE OF THE TRANSACTION
TWProp intends to dispose this investment Property which is currently
not being used for Tien Wah Group's operations in order to enable
it to utilize the proceeds from the disposal for its repayment
of borrowings to Tien Wah.
10. ESTIMATED TIMEFRAME FOR COMPLETION
Within ninety (90) days from the date of the SPA provided always
that if DTM shall be unable to pay the Balance Purchase Price
within the Completion Date, TWProp shall automatically grant to
DTM an extension for a period of thirty (30) days commencing the
day immediately following the expiry of the Completion Date.
11. STATEMENT BY DIRECTORS
The Directors of Tien Wah are of the opinion that the Transaction
is in the best interest of the Tien Wah Group.
12. DOCUMENT(S) AVAILABLE FOR INSPECTION
The SPA is available for inspection at the registered office
of Tien Wah during office hours from Monday to Friday (except
public holidays) at Lot 6.05, Level 6, KPMG Tower 8, First Avenue,
Bandar Utama, 47800 Petaling Jaya, Selangor Darul Ehsan.
This is an announcement under Paragraph 10.06 of the Main Market
Listing Requirements of Bursa Malaysia Securities Berhad.
This announcement is dated 27 January 2011.
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