Announcement to Klse
PROTON HOLDINGS BERHAD
PROPOSED ACQUISITION OF THE REMAINING 49% EQUITY INTEREST IN PT PROTON TRACOMA MOTORS COMPRISING 10,780,000 ORDINARY SHARES OF USD1.00 EACH FOR A TOTAL CASH CONSIDERATION OF USD10,133,200.
1.INTRODUCTION
The Board of Directors (“Board”) of Proton Holdings Berhad (“PROTON” or “Company) wishes to announce that Perusahaan Otomobil Nasional Sdn Bhd (“PONSB”), a wholly-owned subsidiary company of PROTON had on 30 January 2007 entered into a conditional sale and purchase agreement (“SPA”) with Tracoma Holdings Berhad (“Tracoma”) for PONSB and/or its nominee(s) to acquire from Tracoma the remaining 49% equity interest in PT Proton Tracoma Motors (“PTPTM”) comprising 10,780,000 ordinary shares of USD1.00 each (“Share(s)”) for a total cash consideration of USD10,133,200.00 or USD0.94 per share(“Proposed Acquisition”).
2.DETAILS OF THE PROPOSED ACQUISITION
2.1Brief information on PTPTM
PTPTM is a joint venture company between PONSB (51%) and Tracoma (49%) and was established in Indonesia under the framework of Foreign Capital Investment Law No. 11/1970 based on notarial deed No. 137 of Aulia Taufani, S.H dated 23 June 2004. PTPTM’s Articles of Association were approved by the Minister of Law and Human Rights of the Republic of Indonesia in Decision Letter No. C-18641 HT.01.01 Th2004 dated 26 July 2004 and published in the Supplement to the Gazette No. 9731/2004 dated 28 September 2004.
As at the date of this Announcement, the authorised share capital of PTPTM is USD22,000,000.00 comprising 22,000,000 Shares which are fully paid-up.
The principal activity of PTPTM is that of manufacturing and assembly of motor vehicles, sales and distribution of motor vehicles in the Indonesian market and the export of motor vehicles.
PTPTM does not have any subsidiaries or associated companies.
Set out below are the board of commissioners and substantial shareholders of PTPTM and their direct and indirect shareholdings as at the date of this Announcement:
Commissioners / As at the date of this AnnouncementDirect / Indirect
No. of Shares / % / No. of Shares / %
Dato' Mohammed Azlan Bin Hashim / - / - / - / -
Dato' Syed Zainal Abidin Bin Syed Mohamed Tahir / - / - / - / -
Dato' Michael Lim Heen Peok / - / - / - / -
Mohamed Shah Bin Abu Bakar / - / - / 10,780,000a / 49.0
Mohamed Seth Bin Abu Bakar / - / - / 10,780,000a / 49.0
Datuk Kamarulzaman Bin Darus (Alternate to Dato' Syed Zainal Abidin Bin Syed Mohamed Tahir) / - / - / - / -
Substantial Shareholders / As at the date of this Announcement
Direct / Indirect
No. of Shares / % held / No. of Shares / % held
PONSB / 11,220,000 / 51.0 / - / -
Tracoma / 10,780,000 / 49.0
PROTON Holdings Berhad / 11,220,000c / 51.0
Khazanah Nasional Berhad / 11,220,000d / 51.0
Mohamed Shah Bin Abu Bakar / 10,780,000a / 49.0
Mohamed Seth Bin Abu Bakar / 10,780,000a / 49.0
Permodalan Nasional Berhad / 10,780,000b / 49.0
Notes: (a) Deemed interested by virtue of their substantial shareholdings in Tracoma.
(b)Deemed interested by virtue of its substantial shareholdings in Tracoma
(c) Deemed interested by virtue of their substantial shareholdings in PONSB
(d)Deemed interested by virtue of its substantial shareholdings in PROTON, being the holding company of PONSB
Set out below is a summary of key audited financial information on PTPTM:
Audited financial period from 23.6.2004 to 31.3.2005 / Audited financial year ended 31.3.2006 / Unaudited financial period from 1.4.2006 to 31.12.2006IDR’000 / IDR’000 / IDR’000
Revenue / - / - / 1,304,178
Loss before taxation, minority interest and exceptional item / (12,846,344) / (18,746,432) / (14,082,817)
Profit/(loss) after taxation and minority interest / (12,846,344) / 191,468,632 / (14,082,817)
Shareholders' funds/Net Assets / 191,468,633 / 172,722,201 / 158,639,384
Total borrowings / - / - / -
2.2Basis in arriving at the purchase consideration of PTPTM
The purchase consideration for PTPTM of USD10,133,200 has been arrived at on a willing-buyer willing-seller basis after taking into consideration the audited net tangible assets of PTPTM as at 31 March 2006.
2.3Source of Funding for the Proposed Acquisition
The Proposed Acquisition will be financed through internally generated funds.
2.4Salient Terms of the SPA
Conditions Precedent
The Proposed Acquisition is conditional upon fulfillment of the following conditions precedent (“CP”) within four (4) months from the date of the SPA or such extended period as may be mutually agreed upon by PONSB and Tracoma in writing:
(a)the approval of the board of directors and shareholders of Tracoma for the proposed sale of the 10,780,000 Shares (“Sale Shares”);
(b)the approval of the board of directors of PONSB for the Proposed Acquisition;
(c)the approval of Bank Negara Malaysia for the Proposed Acquisition by PONSB;
(d)the approval of the Securities Commission for the proposed disposal of the Sale Shares by Tracoma to PONSB;
(e)the approval of Badan Koordinasi Penamaan Modal/Indonesian Capital Investment Coordinating Board for the proposed disposal of the Sale Shares;
(f)the consents of the security agent/trustee/bondholders of Tracoma for the proposed disposal of the Sale Shares to PONSB;
Mode of Payment of the Purchase Consideration
The purchase consideration for PTPTM of USD10,133,200.00 shall be set-off against any amounts owing by Tracoma to PTPTM and PONSB. As at the date of this Announcement, the amount owing by Tracoma to PTPTM and PONSB is USD391,266.00.
The net purchase consideration shall be paid by PONSB to Tracoma’s solicitors within seven (7) days of the fulfilment of the Conditions Precedent, according to the prevailing foreign exchange rate imposed by Malayan Banking Berhad on the business day prior to the completion of the Proposed Acquisition.
Tracoma’s solicitors would retain a sum equivalent to five percent (5%) of the purchase consideration amounting to USD506,660.00 as required under the Indonesian law to meet with the withholding tax requirement (“Retention Sum”).
The net purchase consideration less the Retention Sum, shall be released to Tracoma by Tracoma’s solicitors on the thirtieth (30th) day from completion of the Proposed Acquisition or upon receipt of documentation that the Minister of Law and Human Rights of Indonesia’s acceptance of the Proposed Acquisition, whichever is the earlier.
The Retention Sum, after the payment of the withholding tax, if any, or in the event that an exemption from the withholding tax is given, shall be released to Tracoma by Tracoma’s solicitors after receipt of the necessary documentation.
2.5Liabilities and Encumbrances
The Shares in PTPTM shall be acquired by PONSB free from all claims, charges, liens, encumbrances and equities whatsoever together with all rights attached thereto and all dividend, rights and distribution declared paid or made in respect thereof.
Based on the audited accounts of PTPTM as at 31 March 2006, PTPTM has total liabilities of approximately IDR22,823,057,609.00 (equivalent to USD2,514,937.00) comprising amounts owing to non-trade creditors and provision for taxation. These existing liabilities of PTPTM will remain in PTPTM and will be repaid in the ordinary course of business. PONSB will not directly assume any liabilities (including contingent liabilities and guarantees) arising from the Proposed Acquisition.
3.BRIEF INFORMATION ON TRACOMA
Tracoma was incorporated on 26 September 1995 in Malaysia under the Companies Act, 1965 as a public limited company under the name of Tracoma Holdings Berhad. On 26 May 1997, the company was converted into a private limited company and changed its name to Tracoma Holdings Sdn Bhd. On 8 June 2000, it was converted back into a public limited company and assumed its present name. It was listed on the Second Board of Bursa Malaysia Securities Berhad on 24 July 2002.
As at the date of this Announcement, Tracoma has an authorised share capital of RM50,000,000.00 comprising 50,000,000 ordinary shares of RM1.00 each of which 48,000,000 ordinary shares have been fully paid up.
The principal activity of Tracoma is that of investment holding and the provision of management services. Its subsidiary companies are involved in manufacturing of automotive components, general contracting and engineering works, engineering consulting, engineering design, jig and fixture manufacturing and installation, die making and servicing, parts and car design, assembly and marketing of motorcycles and scooters, assembly and distribution of agricultural tractors.
The original cost of investment by Tracoma in PTPTM is as follows:
Date / USD / RM*23 July 2004 / 1,225,000.00 / 4,658,705.00
2 March 2005 / 9,555,000.00 / 36,547,930.00
Note:
* Inclusive of all the charges involved in remitting the funds
4.RATIONALE FOR THE PROPOSED ACQUISITION
Indonesia is viewed as a promising market for PROTON to expand its market base. With the future growth prospects of the Indonesian economy, in particular the encouraging growth of automobile sales supported by consumer confidence indicators and positive government policies, the Management of PROTON believes that PTPTM is poised to take advantage of the current and future economic climate and benefit therefrom.
The Proposed Acquisition would allow PROTON to gain full control over PTPTM, hence, contribute positively to the performance of the PROTON Group in the future.
5.FINANCIAL EFFECTS OF THE PROPOSED ACQUISITION
There will be no effect on the issued and paid-up share capital, substantial shareholding structure, net assets and gearing of the Company as the purchase consideration shall be satisfied entirely by cash.
The Proposed Acquisition is not expected to have any effects on the earnings of PROTON Group for the financial year ending 31 March 2007, as the completion date is expected to be in the second quarter of 2007. Nevertheless, the Proposed Acquisition is expected to contribute positively to the earnings of the PROTON Group in the future.
6.APPROVALS REQUIRED
The Proposed Acquisition is subject to the approvals being obtained from the following:
(i)Bank Negara Malaysia;
(ii)Badan Koordinasi Penanaman Modal; and
(iii)Any other relevant authorities/parties.
The Proposed Acquisition is not subject to the approval of the shareholders of PROTON.
7.DIRECTORS' AND SUBSTANTIAL SHAREHOLDERS' INTERESTS
None of the Directors, substantial shareholders of PROTON nor any other persons connected to them have any interest, direct or indirect, in the Proposed Acquisition.
8.DIRECTORS' STATEMENT
After considering all aspects of the Proposed Acquisition, the Board of PROTON is of the opinion that the terms of the Proposed Acquisition are fair and reasonable and are in the best interest of the PROTON Group.
9.COMPLIANCE WITH GUIDELINES
To the best knowledge and belief of the Directors, the Proposed Acquisition does not involve any departure from the Policies and Guidelines on the Issue/Offer of Securities issued by the Securities Commission.
10.SUBMISSION TO AUTHORITIES AND COMPLETION OF THE PROPOSED ACQUISITION
Applications to the relevant authorities are expected to be submitted within two (2) months from the date of this Announcement.
The Proposed Acquisition is expected to be completed in the second quarter of 2007.
11.DOCUMENT AVAILABLE FOR INSPECTION
The SPA will be available for inspection (by way of appointment) during normal business hours (from 8.00 a.m. to 5.30 p.m.) at the Company Secretary’s Office at Level 1, Center of Excellence Complex, Km 33.8 Westbound Shah Alam Expressway,47600 Subang Jaya, Selangor for a period of three (3) months from the date hereof.
This announcement is dated 30 January 2007.
-
1