Serial No. 001
INFORMATION MEMORANDUM INFORMSTRICTLYATI PRIVATEON MANDE CONFIDENTIALMORA NDUM IIINNNSTRICTLYFFFOOORRRMMMAA APRIVATETTTIIIOOONNN MMMANDEEEMM MCONFIDENTIALOOORRRAAANNNDDDUUUMMM ThisIN InformationFO RMemorandumMAT is notIO an offerN toM sell securitiesEMO and Ris notA solicitingND anU offerM to buy STRICTLYSTRICTLYsecurities described PRIVATEhereinPRIVATE in any jurisdiction ANDAND where CONFIDENTIAL CONFIDENTIALthe offer or sale is not permitted STRICTLY PRIVATE AND CONFIDENTIAL
(Company No. 47908-K) (Incorporated in Malaysia under the Companies Act, 1965) (Company (Company(Company No. No.No. 47908-K) 47908-K)47908-K) (IncorporatedAMMB in Malaysia (Company(Company HOLDINGS under No.No. the 47908-K)47908-K) Companies BERHAD Act, 1965) Proposed(Incorporated(Incorporated (Incorporatedissue of, in ininoffer Malaysia MalaysiaMalaysia (Company for under underunder s No.ubscription the thethe 47908-K) Companies CompaniesCompanies Act,or Act,Act, purchase1965) 1965)1965) of or (Incorporated in Malaysia(Company under No: 223035-V)the Companies Act, 1965) invitation to(Incorporated subscribe(Incorporated in Malaysia forin Malaysia or underpurchase under thethe CompaniesCompanies of the Act, Act, 1965)Bank 1965) Guaranteed ProposedProposed issueissue of,of, offeroffer forfor ssubscriptionubscription oror purchasepurchase ofof oror CommercialProposed issue Papers of, offerand/or for Me subscriptiondium Term Notesor purchase (“CP/MTN”) of or 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Agent Programme Programme”)Programme”) of up to RM500.0 million in nominal value (“CP/MTN Programme”) IN RELATIONPrincipal TO THE Adviser PROPOSED and Facility ISSUE, Agent OFFER FOR PrincipalPrincipalRHB INVESTMENT AdviserAdviser andand BANK FacilityFacility BERHAD AgentAgent SUBSCRIPTIONPrincipal OR PURCHASE(Company Adviser No.and 19663-P) Facility OF, ORAgent INVITATION TO RHBRHB INVESTMENTINVESTMENT BANKBANK BERHADBERHAD SUBSCRIBE FORRHB OR INVESTMENT PURCHASE(Company No. BANK 19663-P) OF BERHAD UP TO RM2.0 BILLION RHB INVESTMENT(Company(Company(Company No. No.No. 19663-P) BANK 19663-P)19663-P) BERHAD (Company No. 19663-P) NOMINAL VALUE OF SENIOR(Company No.MEDIUM 19663-P) TERM NOTES AND/OR SUBORDINATED MEDIUM TERM NOTES PURSUANT TO A (A Participating Organisation of Bursa Malaysia Securities Berhad) MEDIUM TERM NOTES PROGRAMME Joint(A Participating Lead Arrangers Organisation of and Bursa Joint Malaysia Lead Securities Managers Berhad) (A(A(A Participating ParticipatingParticipating Organisation OrganisationOrganisation of ofof Bu BuBursarsarsa Malaysia MalaysiaMalaysia Securities SecuritiesSecurities Berhad) Berhad)Berhad) (A Participating Organisation of Bursa Malaysia Securities Berhad) (A Participating Organisation of Bursa Malaysia Securities Berhad) Joint Lead Arrangers and Joint Lead Managers AmINVESTMENTJointJoint BANK LeadLead BERHAD ArrangersArrangers andand JointJointRHB LeadLead INVESTMENT ManagersManagers BANK BERHAD (CompanyJoint No. 23742-V) Lead Arrangers and Joint Lead(Company Managers No. 19663-P) AmINVESTMENTAmINVESTMENT BANKBANK BERHADBERHAD RHBRHB INVESTMENTINVESTMENT BANKBANK BERHADBERHAD AmINVESTMENT(Company No. BANK 23742-V) BERHAD RHB INVESTMENT(Company No. BANK 19663-P) BERHAD AmINVESTMENT(Company(Company(Company No. No.No. BANK 23742-V) 23742-V)23742-V) BERHAD RHB INVESTMENT(Company(Company(Company No. No.No. 19663-P) BANK 19663-P)19663-P) BERHAD (Company No. 23742-V) (Company No. 19663-P) (Company No. 23742-V) (Company No. 19663-P) (A Participating Organisation of Bursa Malaysia Securities (A Participating Organisation of Bursa Malaysia Securities Berhad) Principal Adviser, Lead Arranger and Lead ManagerBerhad) (A Participating Organisation of Bursa Malaysia Securities (A(A(A Participating ParticipatingParticipating Organisation OrganisationOrganisation of ofof Bursa BursaBursa Malaysia MalaysiaMalaysia Securities SecuritiesSecurities (A Participating Organisation of Bursa Malaysia Securities (A Participating OrganisationBerhad) of Bursa Malaysia Securities (A(A(A Participating ParticipatingParticipating Organisation OrganisationOrganisation of ofof Bursa BursaBursa Malaysia MalaysiaMalaysia Securities SecuritiesSecurities (A Participating OrganisationBerhad)Berhad) of Bursa Malaysia SecuritiesFinancial Adviser(A Participating OrganisationBerhad) of Bursa Malaysia Securities Berhad) (A Participating OrganisationBerhad)Berhad) of Bursa Malaysia Securities Berhad) Berhad) Berhad) Financial Adviser ASTRAMINAFinancialFinancial ADVISORY AdviserAdviser SDN BHD (CompanyFinancial No. Adviser 810705-K) ASTRAMINAASTRAMINA ADVISORYADVISORY SDNSDN BHDBHD ASTRAMINA(Company ADVISORY No. 810705-K) SDN BHD ASTRAMINA(Company(Company(Company ADVISORY No. No.No. 810705-K) 810705-K)810705-K) SDN BHD AmInvestment(Company No. Bank810705-K) Berhad (Company(Company No. No. 810705-K) 23742-V) (a member of AmInvestment Bank Group)
This Information Memorandum is dated 23 October 2012 This Information Memorandum is dated 17 July 2012 This Information Memorandum is dated 23 October 2012 TTThhhisiissIInInnffofoorrrmmmaaattitoiioonnnMMMeeemmmooorrraaannnddduuummmisiissdddaaatteteeddd222333OOOcccttotoobbbeeerrr222000111222 APPROVAL OF THE SECURITIESThis Infor m COMMISSIONation Mem o SHOULDrandum NOTis d a BEte d TAKEN23 O c TOto b INDICATEer 2012 THAT THE SECURITIES COMMISSION RECOMMENDSThis I n THEform SUBSCRIPTIONation Memo ra ORnd u PURCHASEm is dat e OFd 2 THE3 O c NOTEStober 2 ISSUED012 UNDER THE CP/MTN PROGRAMME, WHICH ARE THE SUBJECT OF THIS INFORMATION MEMORANDUM. INVESTORS SHOULD RELY ON THEIR APPROVAL OF THE SECURITIES COMMISSION SHOULD NOT BE TAKEN TO INDICATE THAT THE SECURITIES APPROVALAPPROVALOWN EVALUATION OF OF THE THE TO SECURITIES SECURITIESASSESS THE COMMISSIONMERITS COMMISSION AND RISKS SHOULD SHOULD OF ANY NOT NOT INVESTMENT. BE BE TAKEN TAKEN TO TO INDICATE INDICATE THAT THAT THE THE SECURITIES SECURITIES APPROVALCOMMISSION OF RECOMMENDS THE SECURITIES THE COMMISSION SUBSCRIPTION SHOULD OR PURCHASE NOT BE OF TAKEN THE TO NOTES INDICATE ISSUED THAT UNDER THE THE SECURITIES CP/MTN COMMISSIONAPPROVALCOMMISSION OF RECOMMENDS RECOMMENDS THE SECURITIES THE THE SUBSCRIPTION COMMISSION SUBSCRIPTION SHOULD OR OR PURCHASE PURCHASE NOT BE OF OF TAKEN THE THE NOTESTO NOTES INDICATE ISSUED ISSUED THAT UNDER UNDER THE THE THE SECURITIES CP/MTN CP/MTN COMMISSIONPROGRAMME, RECOMMENDSWHICH ARE THE THE SUBJECT SUBSCRIPTION OF THIS INFORMATION OR PURCHASE MEMORANDUM. OF THE NOTES INVESTORS ISSUED SHOULD UNDER RELY THE ON CP/MTN THEIR PROGRAMME,COMMISSIONPROGRAMME, WHICH RECOMMENDSWHICH ARE ARE THE THE THE SUBJECTSUBJECT SUBSCRIPTION OF OF THIS THIS INFORMATIONINFORMATION OR PURCHASE MEMORANDUM.MEMORANDUM. OF THE NOTES INVESTORSINVESTORS ISSUED SHOULD SHOULD UNDER RELYRELY THE ON ON CP/MTN THEIR THEIR PROGRAMME,OWN EVALUATION WHICH TO AREASSESS THE THE SUBJECT MERITS OF AND THIS RISKS INFORMATION OF ANY INVESTMENT. MEMORANDUM. INVESTORS SHOULD RELY ON THEIR OWNPROGRAMME,OWN EVALUATION EVALUATION WHICH TO TO ASSESS ASSESSARE THE THE THE SUBJECT MERITS MERITS OF AND AND THIS RISKS RISKS INFORMATION OF OF ANY ANY INVESTMENT. INVESTMENT. MEMORANDUM. INVESTORS SHOULD RELY ON THEIR OWN EVALUATION TO ASSESS THE MERITS AND RISKS OF ANY INVESTMENT. OWN EVALUATION TO ASSESS THE MERITS AND RISKS OF ANY INVESTMENT. Information Memorandum Dijaya Corporation Berhad
RESPONSIBILITY STATEMENT
This Information Memorandum has been approved by the directors of Dijaya Corporation Berhad (“Dijaya” or “Issuer”) and they collectively and individually accept full responsibility for the accuracy of the information given and confirm that, after having made all reasonable enquiries, and to the best of their knowledge, information and belief, there are no false or misleading statements or other material facts the omission of which would make any statement in this Information Memorandum false or misleading and that there are no material omissions in this Information Memorandum.
IMPORTANT NOTICE AND GENERAL STATEMENTS OF DISCLAIMER
This Information Memorandum is being furnished on a confidential basis to prospective investors falling within any one or more of the categories of persons specified in Schedule 6 or Section 229(1)(b), Schedule 7 or Section 230(1)(b) read together with Schedule 9 or Section 257(3) of the Capital Markets and Services Act 2007 as amended from time to time (“CMSA”) for the sole purpose of assisting them to decide whether to subscribe for or purchase of the bank guaranteed commercial papers (“CPs”) and/or medium term notes (“MTNs”) (collectively “Notes”) pursuant to a bank guaranteed CP/MTN Programme of up to RM500.0 million in nominal value (“CP/MTN Programme”).
None of the information or data contained in this Information Memorandum has been independently verified by RHB Investment Bank Berhad (“RHB Investment Bank”) and AmInvestment Bank Berhad (“AmInvestment Bank”) as the joint lead arrangers for the CP/MTN Programme (“Joint Lead Arrangers”). Dijaya has authorised the Joint Lead Arrangers to distribute this Information Memorandum and accordingly, no representation or warranty, express or implied, is given or assumed by the Joint Lead Arrangers with respect to the completeness or accuracy of any information and data contained in this Information Memorandum. In addition, no representation or warranty, express or implied, is made such that the information remains unchanged in any respect as of any date or dates after those stated herein, with respect to any matter concerning Dijaya or any statement made in this Information Memorandum.
Dijaya, having made all reasonable enquiries, confirms that this Information Memorandum contains all information with respect to Dijaya and the CP/MTN Programme, which is material in the context of the CP/MTN Programme. The statements contained in this Information Memorandum relating to Dijaya are in every material respect true and accurate and not misleading. The opinions and intentions expressed in this Information Memorandum with regards to Dijaya are honestly held, have been reached after considering all relevant circumstances and are based on reasonable assumptions and there are no other facts in relation to Dijaya or the CP/MTN Programme the omission of which would, in the context of the issuance and offering of the CP/MTN Programme, make any statement in this Information Memorandum misleading in any material respect and all reasonable enquiries have been made by Dijaya to ascertain such facts and to verify the accuracy of all such information and statements. Dijaya accepts full responsibility for the information and data contained in this Information Memorandum.
Neither the delivery of this Information Memorandum nor the offering, sale or delivery of any Notes (as defined herein) shall in any circumstance imply that the information and data contained herein concerning Dijaya is correct at any time subsequent to the date hereof or that any other information supplied in connection with the Notes is correct as of any time subsequent to the date indicated in the document containing the same. The Joint Lead Arrangers do not undertake to review the financial condition or affairs of Dijaya during the tenure of the Notes nor do they advise any participants in the CP/MTN Programme of any information coming to their respective attention.
Confidential I Information Memorandum Dijaya Corporation Berhad
This Information Memorandum is not intended by Dijaya and/or the Joint Lead Arrangers (or any of them) to provide the sole basis for any credit or other evaluation, and should not be considered as a recommendation by Dijaya and/or the Joint Lead Arrangers (or any of them) to the recipient to subscribe for or purchase the Notes under the CP/MTN Programme. In determining whether to participate in the CP/MTN Programme, each potential participant is urged to make its own assessment of the relevance and adequacy of the information and data contained in this Information Memorandum and to make such independent investigation as it deems necessary for the purposes of such determination. Each potential participant is also advised to seek independent financial advice in determining whether to participate in the CP/MTN Programme or otherwise. No person should subscribe for, purchase or otherwise invest in the Notes unless he is personally convinced and/or advised by a qualified adviser of his own choosing that this investment is financially suitable for him. No representation, warranty or undertaking, expressed or implied, is made and no responsibility is accepted by Dijaya and/or the Joint Lead Arrangers (or any of them), its officers or employees as to the appropriateness or otherwise of any participation in the CP/MTN Programme. Further, neither Dijaya nor the Joint Lead Arrangers (or any of them) nor their respective officers or employees represent or warrant that any information and data contained herein will remain unchanged subsequent to the date of this Information Memorandum. Nothing contained in this Information Memorandum is, or should be relied upon as, a promise or representation as to the future. Prospective investors and participants are urged to request for any additional information which they may consider necessary to make an informed investment decision.
The distribution or possession of this Information Memorandum in or from certain jurisdictions may be restricted by law. Each recipient is required by Dijaya and the Joint Lead Arrangers to seek appropriate professional advice regarding, and to observe, any such restriction or prohibition. Neither Dijaya nor the Joint Lead Arrangers (and each of them) accept any responsibility or liability to any person in relation to the distribution or possession of this Information Memorandum in or from any jurisdiction.
This Information Memorandum has not been and will not be made to comply with the laws of any foreign jurisdiction, and has not been and will not be lodged, registered or approved pursuant to or under any legislation of (or with or by any regulatory authorities or other relevant bodies in) any foreign jurisdiction and it does not constitute an issue or offer of, or an invitation to subscribe for or purchase, the Notes or any other securities of any kind by any party in any foreign jurisdiction.
This Information Memorandum is not and is not intended to be a prospectus. Unless otherwise specified in this Information Memorandum, the information and data contained in this Information Memorandum is current as at the date hereof.
By accepting delivery of this Information Memorandum, each recipient agrees to the terms upon which this Information Memorandum is provided to such recipient as set out in this Information Memorandum, and further agrees and confirms that (a) it will keep confidential all of such information and data; (b) it is lawful for the recipient to subscribe for or purchase the Notes under all jurisdictions to which the recipient is subject; (c) the recipient has complied with all applicable laws in connection with such subscription or purchase of the Notes; (d) Dijaya, RHB Investment Bank and AmInvestment Bank and their respective directors, officers, employees and professional advisers are not and will not be in breach of the laws of any jurisdiction to which the recipient is subject as a result of such subscription or purchase of the Notes, and they shall not have any responsibility or liability in the event that such subscription or purchase of the Notes is or shall become unlawful, unenforceable, voidable or void; (e) it is aware that the Notes can only be offered, sold, transferred or otherwise disposed of directly or indirectly in accordance with the relevant selling restrictions and all applicable laws; (f) it has sufficient knowledge and experience in financial and business matters to be capable of evaluating the merits and risks of subscribing for or purchasing the Notes, and is able and is prepared to bear the economic and financial risks of investing in or holding the Notes; and (g) it is a person falling within any one or more of the categories of persons specified in Schedule 6 or Section
Confidential II Information Memorandum Dijaya Corporation Berhad
229(1)(b), Schedule 7 or Section 230(1)(b) read together with Schedule 9 or Section 257(3) of the CMSA. Each recipient is solely responsible for seeking all appropriate expert advice as to the laws of all jurisdictions to which it is subject.
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Confidential III Information Memorandum Dijaya Corporation Berhad
STATEMENTS OF DISCLAIMER – SECURITIES COMMISSION
In accordance with the CMSA as amended from time to time, a copy of this Information Memorandum will be deposited with the Securities Commission, who takes no responsibility for its contents.
The approval of the Securities Commission for the CP/MTN Programme was granted on 26 September 2012. The issue, offer or invitation in relation to the Notes are also subject to the fulfilment of various other conditions precedent and shall not be binding until all regulatory approvals have been obtained and these conditions have been fulfilled. Each recipient of this Information Memorandum acknowledges and agrees that the approval of the Securities Commission shall not be taken to indicate that the Securities Commission recommends the subscription or purchase of the Notes issued under the CP/MTN Programme.
Each issuance of the Notes under the CP/MTN Programme will carry different risks and prospective investors are strongly encouraged to evaluate each issuance of the Notes on its own merit. It is recommended that prospective investors consult their financial, legal and other advisers before purchasing or acquiring or subscribing for the Notes. Each prospective investor should determine for itself the relevance of the information in this Information Memorandum and its investment should be and shall be deemed to be based upon such investigation as it deems necessary.
The Securities Commission shall not be liable for any non-disclosure on the part of Dijaya and assumes no responsibility for the correctness of any statements made or opinions or reports expressed in this Information Memorandum.
FORWARD-LOOKING STATEMENTS
All statements contained in this Information Memorandum, statements made in press releases and oral statements that may be made by Dijaya or its officers, directors or employees acting on Dijaya’s behalf that are not statements of historical fact constitute “forward-looking statements”. Certain figures included in this Information Memorandum have been subject to rounding adjustments; accordingly, figures shown for the same category presented in different tables may vary slightly and figures shown as totals in certain tables may not be an arithmetic aggregation of the figures which precede them. All statements other than statements of historical facts included in this Information Memorandum, including, without limitation, those regarding the financial position of the Dijaya Group, business strategy plans and objectives of management for future operations, are forward- looking statements.
Investors can identify some of these forward-looking statements by terms such as “expect”, “believe”, “plan”, “intend”, “estimate”, “anticipate”, “may”, “will”, “would” and “could” or similar words. However, investors should note that these words are not the exclusive means of identifying forward- looking statements.
All statements regarding Dijaya’s expected financial position, business strategy, plans and prospects are forward-looking statements. These forward-looking statements are only predictions and involve known and unknown risks, uncertainties and other factors that may cause Dijaya’s actual results, performance or achievements to be materially different from any future results, performance or achievements expressed or implied by these forward-looking statements.
These forward-looking statements speak only as at the date of the Information Memorandum. Given the risks and uncertainties that may cause Dijaya’s actual future results, performance or achievements to be materially different than expected, expressed or implied by the forward-looking statements in
Confidential IV Information Memorandum Dijaya Corporation Berhad this Information Memorandum, investors are advised not to place undue reliance on those statements. Dijaya does not represent or warrant to investors that its actual future results, performance or achievements will be as discussed in those statements. Dijaya expressly disclaims any obligation or undertaking to release publicly any updates or revisions to any forward-looking statement contained herein to reflect any change in the Dijaya’s expectations with regard thereto or any change of events, conditions or circumstances on which any such statement was based.
CONFIDENTIALITY
This Information Memorandum and its contents are strictly confidential and are made strictly on the basis that they will remain confidential. Accordingly, this Information Memorandum and its contents, or any information, which is made available in connection with any further enquiries, must be held in complete confidence.
In the event that there is any contravention of this confidentiality undertaking or there is reasonable likelihood that this confidentiality undertaking may be contravened, Dijaya may, at its discretion, apply for any remedy available to Dijaya whether at law or equity, including without limitation, injunctions. Dijaya is entitled to fully recover from the contravening party all costs, expenses and losses incurred and/or suffered, in this regard. For the avoidance of doubt, it is hereby deemed that this confidentiality undertaking shall be imposed upon the recipient, the recipient’s professional advisors, directors, employees and any other persons concerned with the Notes.
The recipient must return this Information Memorandum and all reproductions whether in whole or in part and any other information in connection therewith to the Joint Lead Arrangers which had forwarded the same to the recipient promptly upon such request of the Joint Lead Arrangers, unless that recipient provides proof of a written undertaking satisfactory to the Joint Lead Arrangers with respect to destroying these documents as soon as reasonably practicable after the said request from the Joint Lead Arrangers.
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TABLE OF CONTENTS
GLOSSARY OF DEFINITIONS AND ABBREVIATIONS...... II 1. EXECUTIVE SUMMARY ...... 1 1.1 Information on Dijaya ...... 1 1.2 Brief Description of the Programme ...... 1 1.3 Brief Description of the BG Facilities...... 2 1.4 Rating...... 3 1.5 Utilisation of Proceeds ...... 3 1.6 SC Approval...... 4 2. PRINCIPAL TERMS AND CONDITIONS OF THE CP/MTN PROGRAMME ...... 5 3. BACKGROUND INFORMATION ON THE ISSUER...... 27 3.1 Corporate History and Principal Activities ...... 27 3.2 Share Capital Structure...... 27 3.3 Shareholding Structure...... 28 3.4 Profile of the Board of Directors...... 29 3.5 Profile of Key Management ...... 35 3.6 Information on Subsidiaries, Associated Companies and Jointly-Controlled Entities ...... 38 4. CORE BUSINESS AND OVERVIEW OF DIJAYA GROUP ...... 46 4.1 Principal Activities of Dijaya Group...... 46 4.2 Main Businesses...... 46 4.3 Property Development and Resort Operations ...... 47 4.4 Property Investment ...... 51 4.5 Investment Holding and Others...... 51 4.6 Future Plans and Prospects of Dijaya Group...... 52 4.7 Financial Highlights of Dijaya Group ...... 54 4.8 Amalgamation Exercise ...... 54 5. INVESTMENT CONSIDERATIONS...... 56 5.1 Risks Relating to the CP/ MTN Programme ...... 56 5.2 Risks Relating to the Issuer...... 58 5.3 Risks Inherent in Property Investment and Property Development...... 60 5.4 Forward-Looking Statements...... 61 6. INDUSTRY REVIEW ...... 62 6.1 Overview of the Malaysian Economy ...... 62 6.2 Overview and Outlook of the Malaysian Property Market...... 63 7. OTHER MATERIAL INFORMATION...... 65 7.1 Contingent Liabilities...... 65 7.2 Material Litigation...... 65 7.3 Material Contracts...... 66 7.4 Conflict of Interest and the Appropriate Mitigating Measures...... 68 APPENDIX I AUDITED FINANCIAL STATEMENTS FOR 31 DECEMBER 2011, 31 DECEMBER 2010 AND 31 DECEMBER 2009/ ANNUAL REPORT OF DIJAYA...... 72
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GLOSSARY OF DEFINITIONS AND ABBREVIATIONS
In this Information Memorandum, the words and phrases below, unless the context otherwise requires, shall bear the following meanings assigned to them:
Acquisitions : Acquisitions by Dijaya and/or its nominee(s) of the entire equity interest in the Identified Companies and the Identified Properties from the respective Vendors for a total consideration of RM934,681,436 which was satisfied partly in cash and partly via the issuance of RCULS Amalgamation : Assets amalgamation and rationalisation exercise involving Exercise the amalgamation of the assets and properties of the Dijaya Group with the Identified Companies and the Identified Properties of the respective Vendors AmBank : AmBank (M) Berhad (Company No. 8515-D) AmInvestment : AmInvestment Bank Berhad (Company No. 23742-V) Bank Astramina : Astramina Advisory Sdn Bhd (Company No. 810705-K) BNM : Bank Negara Malaysia BG : Unconditional and irrevocable bank guarantee issued by the Guarantor Banks BG Facilities : Bank guarantee facilities of up to RM500 million in respect of the CP/MTN Programme provided by the Guarantor Banks as follows: (i) BG Facility 1 Up to RM300 million bank guarantee facility provided by RHB Bank; and
(ii) BG Facility 2 Up to RM200 million bank guarantee facility provided by AmBank Board : Board of Directors of Dijaya Bonus Shares : Up to 122,825,664 bonus shares to be issued pursuant to the Rights Issue Bursa Depository : Bursa Malaysia Depository Sdn. Bhd. Bursa Securities : Bursa Malaysia Securities Berhad (Company No.635998-W) CDS Account(s) : Account established by Bursa Depository for a depositor for the recording of deposit of securities and dealings in such securities by that depositor of securities CMSA : Capital Markets and Services Act 2007, as amended from time to time Companies Act : Companies Act 1965, as amended from time to time
Confidential Page ii Information Memorandum Dijaya Corporation Berhad
CP/MTN : Bank guaranteed commercial papers and/or medium term Programme or notes programme of up to RM500.0 million in nominal value Programme comprising: a) Up to RM300.0 million CP/MTN to be guaranteed by RHB Bank (“Tranche 1”); and b) Up to RM200.0 million CP/MTN to be guaranteed by AmBank (“Tranche 2”). CP(s) : Commercial papers Definitive : Collectively, the 23 conditional SPAs and 17 conditional Agreements SSAs in relation to the Amalgamation Exercise which was completed on 30 August 2012 Dijaya or Issuer : Dijaya Corporation Berhad (Company No. 47908-K) Dijaya Group : Dijaya and its subsidiaries Entitled : Shareholder(s) of Dijaya whose name(s) appear in Dijaya’s Shareholders Record of Depositors on the Entitlement Date Entitlement Date : 5.00 p.m. on 24 September 2012, being the time and date on which Dijaya’s shareholders must be registered in Dijaya’s Record of Depositors in order to be entitled to participate in the Rights Issue FAST : Fully Automated System for Issuing/Tendering, a centralised system for the origination of the debt securities operated by MyClear and governed by the MyClear Procedures FPE : Financial Period Ended FYE : Financial Year(s) Ended/Ending Financing : Legal documents in relation to the CP/MTN Programme Documents GDC : Gross Development Cost GDSB : Golden Diversity Sdn Bhd (Company No. 329212-V) GDV : Gross Development Value Guarantor Banks : Collectively, RHB Bank and AmBank IASB : Impeccable Ace Sdn Bhd (Company No. 323230-W) Identified : Collectively, Ambang Cendana Sdn Bhd, Asas Kenari Sdn Companies Bhd, Coastal Recreation Centre Sdn Bhd, Daya Petaling Sdn Bhd, Dijaya Plaza Sdn Bhd, Ebony Legacy Sdn Bhd, Istima Budi Sdn Bhd, Image Pertiwi Sdn Bhd, IRSB, Kuasa Cekapmas Sdn Bhd, Potensi Cekap Sdn Bhd, Punca Klasik Sdn Bhd, Quantum Peace Sdn Bhd, Star Triangle Network Sdn Bhd, Taraf Permata Sdn Bhd, Ultimate Support Sdn Bhd and Windmax Region Sdn Bhd
Confidential Page iii Information Memorandum Dijaya Corporation Berhad
Identified : Collectively, the real properties held by D & I Corporation Properties Sdn Bhd, D & I Enterprise Sdn Bhd, Desa Setia Sdn Bhd, Dynamic Sensation Sdn Bhd, Germewah Jaya Sdn Bhd, Glorade Sdn Bhd, Happy Graphic Recreation Sdn Bhd, Lion Establishment Sdn Bhd, Moretune Corporation Sdn Bhd, Metro Laris Sdn Bhd, Mutiara Cempaka Sdn Bhd, Profile Wide Sdn Bhd, Prospect Region Sdn Bhd and Unique Dynasty Sdn Bhd IRSB : Intan Recreation Sdn Bhd (Company No. 39603-V) Joint Lead : Collectively, RHB Investment Bank and AmInvestment Bank Arrangers Joint Lead : Collectively, RHB Investment Bank and AmInvestment Bank Managers Listing : Main Market Listing Requirements of Bursa Securities Requirements MTN(s) : Medium term notes MyClear : Malaysian Electronic Clearance Corporation Sdn Bhd (Company No. 836743-D), a wholly owned subsidiary of Bank Negara Malaysia MyClear : The Operational Procedures for Securities Services in FAST Procedures and RENTAS MyClear Rules : The Participation and Operational Rules for Payments and Securities Services MyClear Rules and : Collectively, MyClear Rules and MyClear Procedures, issued Procedures by MyClear, as amended from time to time Notes : Collectively, the CPs and/or the MTNs to be issued under the CP/MTN Programme Noteholders : The holders of the Notes Option Committee : The option committee established to administer Dijaya’s employee share option scheme PAT : Profit After Tax Primary : The primary subscribers of the MTNs will be determined Subscribers prior to each issuance Property Lease : 26 conditional property lease agreements all dated 6 July 2012 Agreement(s) between certain existing subsidiaries of Dijaya and certain Identified Companies with Desa Setia Sdn Bhd, D&I Enterprise Sdn Bhd, D&I Corporation Sdn Bhd, Happy Graphic Recreation Sdn Bhd, Lion Establishment Sdn Bhd, Unique Dynasty Sdn Bhd and IB Mentari Management Sdn Bhd for the letting / tenancy of the various properties acquired by Dijaya and / or its nominee(s) pursuant to the Acquisitions (after taking into consideration the lettable areas already tenanted by external parties) in order to fulfil the rental yield obligations provided by TSDTCS
Confidential Page iv Information Memorandum Dijaya Corporation Berhad
Principal : RHB Investment Bank Adviser/Facility Agent PSDCST : Puan Sri Datin Chan Shao Tsiu Purchase : The purchase consideration payable to the Vendors in relation Consideration to the Acquisitions amounting to RM934,681,436 RAM Ratings : RAM Rating Services Berhad (Company No. 763588-T) RCULS : 10-year 3% redeemable convertible unsecured loan stocks in Dijaya RENTAS : Real Time Electronic Transfer of Funds and Securities System, operated by MyClear on behalf of BNM Rights Issue : Renounceable rights issue of up to 491,302,655 new Rights Shares at an issue price of RM1.20 per Rights Share, together with a bonus issue of up to 122,825,664 Bonus Shares to be credited as fully paid up, on the basis of four (4) Rights Shares for every five (5) existing Dijaya Shares held as at the Entitlement Date and one (1) Bonus Share for every four (4) Rights Shares subscribed for Rights Share(s) : Up to 491,302,655 new Shares to be issued pursuant to the Rights Issue RM : Ringgit Malaysia RHB Bank : RHB Bank Berhad (Company No. 6171-M) RHB Investment : RHB Investment Bank Berhad (Company No. 19663-P) Bank SC : Securities Commission of Malaysia Share(s) or Dijaya : Ordinary share(s) of RM1.00 each in Dijaya Share(s) SPA(s) : Sale and purchase agreement(s) dated 9 April 2012 between Dijaya and the respective Vendors in relation to the sale and purchase of the Identified Properties pursuant to the Acquisitions Sq Ft : Square feet Sq m : Square meter SSA(s) : Share sale agreement(s) dated 9 April 2012 and 6 July 2012 (in respect of the share sale agreement entered into for the acquisition of IRSB) between Dijaya and the respective Vendors in relation to the sale and purchase of the entire equity interest in the Identified Companies pursuant to the Acquisitions TPM : Tender Panel Members Trust Deed : The trust deed to be entered into by Dijaya and the Trustee constituting the CP/MTN Programme Trustee : Pacific Trustees Berhad (Company No. 317001-A)
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TSDTCS : Tan Sri Dato’ Tan Chee Sing Underwriters : A consortium of eligible financial institutions to be arranged by the Joint Lead Arrangers on a best effort basis Vendors : Collectively, TSDTCS, PSDCST, Dickson Tan Yong Loong, Diana Tan Sheik Ni, Fortune First Limited, Sky City Budget Sdn Bhd, D&I Corporation Sdn Bhd, D&I Enterprise Sdn Bhd, Desa Setia Sdn Bhd, Dynamic Sensation Sdn Bhd, Germewah Jaya Sdn Bhd, Glorade Sdn Bhd, Happy Graphic Recreation Sdn Bhd, Lion Establishment Sdn Bhd, Metro Laris Sdn Bhd, Moretune Corporation Sdn Bhd, Mutiara Cempaka Sdn Bhd, Profile Wide Sdn Bhd, Prospect Region Sdn Bhd and Unique Dynasty Sdn Bhd in relation to the Acquisitions
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1. EXECUTIVE SUMMARY
This summary highlights selected information from this Information Memorandum and may not contain all of the information that may be important to you. You should read this Information Memorandum, including our financial statements and related notes in its entirety before making an investment decision.
1.1 Information on Dijaya
Dijaya was incorporated on 2 June 1979 in Malaysia under the Companies Act as a private limited company under the name of Itama Sdn Berhad. On 4 February 1982, its name was changed to IGB Fibre-Cement Products Sdn Bhd and subsequently to Jasa Megah Industries Sdn Berhad on 30 July 1984. On 1 July 1991, it was converted to a public limited company under the name of Jasa Megah Industries Berhad before assuming its present name as Dijaya Corporation Berhad on 3 June 1997. Dijaya was officially listed on the Main Board of Bursa Securities on 18 August 1992. Dijaya is principally involved in investment holding and provision of management services.
On 6 March 2012, Dijaya announced the Amalgamation Exercise which entails the Acquisitions, Rights Issue and the establishment of the CP/MTN Programme. The Acquisitions were completed on 30 August 2012.
1.2 Brief Description of the Programme
The CP/MTN Programme has a programme limit of RM500.0 million in nominal value which comprises the following:
(i) up to RM300.0 million CP/MTN to be guaranteed by RHB Bank (“Tranche 1”); and (ii) up to RM200.0 million CP/MTN to be guaranteed by AmBank (“Tranche 2”).
The BG Facilities granted by the Guarantor Banks shall guarantee the redemption of the Notes of up to RM500.0 million in nominal value including one coupon payment of the MTNs, if applicable. For the avoidance of doubt, the BG Facilities are a separate arrangement from the CP/MTN Programme and shall be entered into separately between the Issuer and the Guarantor Banks.
The tenure for the CP/MTN Programme shall be up to 7 years from the date of first issue, provided that the first issue of the Notes shall not be later than 2 years from the date of the SC’s approval.
The Issuer may issue the CPs with maturities from 1 to 12 months and the MTNs with maturities from more than 1 year and up to 7 years from the issuance date, as the Issuer may determine, provided that no CPs or MTNs shall mature beyond the expiry of the CP/MTN Programme.
The Notes shall be issued via competitive tender by the TPMs or direct placement on a best effort basis or on a bought deal basis or book-building/ bookrunning on a best effort basis.
The CP/MTN Programme shall be unsecured. However, the Notes to be issued under the CP/MTN Programme shall be backed by the BG Facilities provided by the Guarantor Banks.
The CPs will be issued at a discount to their face value. The coupons for the MTNs are payable at semi-annual intervals in arrears with the first coupon payment commencing six (6)
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months from the issue date of the MTNs and the last coupon payment ending on the date falling on the maturity of the MTNs.
The CPs may be partially or fully underwritten by the Underwriters, if the Issuer and the Joint Lead Arrangers mutually agree based on terms and conditions, including those relating to the underwritten rate and the participation and underwriting fees, to be agreed. The Underwriters severally commit themselves to purchase the CPs not taken up by the TPMs at the underwritten rate, pro-rated to their respective underwriting commitment. Each of the Underwriters’ commitment shall be reduced by the nominal value of the CPs subscribed by that particular Underwriter, in its capacity as a TPM.
The aggregate nominal value of Notes outstanding including one (1) coupon of the MTNs (if any) shall not exceed RM500.0 million at any point in time, and subject to the following reduction schedule:
At the end Reduction Amount Programme Size of year* after Reduction % of the RM Million Programme limit (RM Million) 1 – 3 Nil Nil 500.0 4 15 75.0 425.0 5 15 75.0 350.0 6 30 150.0 200.0 7 40 200.0 Nil Total 100 500.0 * from first issuance of the Notes
The programme size will also be reduced in accordance with the Accelerated Reduction Amount in a direct order of the reduction schedule. The “Accelerated Reduction Amount” is defined as the nominal amount of Notes early redeemed by the Issuer from monies standing to the credit of the proceeds account to be opened and operated under the BG Facilities.
Please refer to Section 2 of this Information Memorandum for further details of the principal terms and conditions of the CP/MTN Programme.
1.3 Brief Description of the BG Facilities
RHB Bank and AmBank (i.e. the Guarantor Banks) will collectively make available a bank guarantee facility of up to RM500.0 million to irrevocably and unconditionally guarantee the redemption of the nominal value of the Notes to be issued under the CP/MTN Programme, and in the case of MTNs issued, including one coupon payment of the MTNs. Each Guarantor Bank will provide the BG Facilities in accordance with the following guarantee commitment:
(i) BG Facility 1 comprising of up to RM300.0 million bank guarantee facility provided or to be provided by RHB Bank; and (ii) BG Facility 2 comprising of up to RM200.0 million bank guarantee facility provided or to be provided by AmBank.
The Guarantor Banks shall have the right to assign their rights and/or transfer by novation any portion of its guarantee commitment either for BGs already issued or its commitment under the respective BG Facilities to another guarantor bank(s) provided always that:
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(a) there shall not be any adverse change to the rating for such CPs and MTNs issued or to be issued under the CP/MTN Programme which are backed or to be backed by the BGs as a result of such assignment and/or transfer; and
(b) at least 30 days prior written notice is given to the Issuer and, if the BGs have been issued, to the Trustee.
The tenure of each BG shall be for a period beginning from the date of issuance of such Note guaranteed by the respective BG and shall end on the maturity date of such Note.
In addition to being the Trustee for the Noteholders, Pacific Trustees Berhad is also the security agent in relation to the BG Facilities.
Trustee’s Rights on an Event of Default
Under the Trust Deed, the Trustee shall automatically, without the need to seek further instructions or directions from the Noteholders, declare an event of default (“Event of Default”) has occurred and, amongst others, shall call on the BGs, under the following events:
(i) if the Issuer is unable to pay any coupon and principal amount due under the CP/MTN Programme on the due date or, if so payable, on demand; and
(ii) if the Issuer is unable to pay any amount due other than the coupon and principal under any of the transaction documents in relation to the establishment of the CP/MTN Programme on the due date or, if so payable, on demand within fourteen (14) business days of such due date.
Other than the abovementioned events, the Trustee, may at its sole and absolute discretion, and shall, if directed to do so by the Noteholders pursuant to an extraordinary resolution, declare that an Event of Default has occurred.
1.4 Rating
RAM Ratings has accorded a short-term rating of P1(bg) and long term rating of AA2(bg) in respect of the Notes to be issued under Tranche 1 whilst a short-term rating of P1(bg) and long term rating of AA3(bg) in respect of the Notes to be issued under Tranche 2.
1.5 Utilisation of Proceeds
The proceeds raised from the CP/MTN Programme is proposed to be utilised for the following:
(a) to refinance Dijaya’s revolving credit facility of up to RM100.0 million granted by RHB Bank;
(b) to pay for fees and expenses incidental to the issuance and establishment of the CP/MTN Programme of up to RM8.5 million; and
(c) to fund the working capital and general corporate purposes of Dijaya and/or its subsidiaries.
Any amount not utilised for item (a) and (b) can be utilised for item (c).
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Proceeds from any subsequent issues (other than the first issuance) of the Notes may be utilised by the Issuer to redeem any maturing CPs and/or MTNs under the CP/MTN Programme and /or for the purposes in (b), if applicable, and (c) above.
1.6 SC Approval
The CP/MTN Programme was approved by the SC on 26 September 2012.
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2. PRINCIPAL TERMS AND CONDITIONS OF THE CP/MTN PROGRAMME
The information set out in this section are the principal terms and conditions approved by the SC and is qualified in its entirety by, and must be read in conjunction with, further information appearing elsewhere in this Information Memorandum. Words and expressions used and defined in this section shall, in the event of inconsistency with the Definitions section of this Information Memorandum, only be applicable for this section.
The CP/MTN Programme was authorised by a resolution of the Board passed on 5 March 2012 and 1 October 2012. The Notes are constituted by the Trust Deed. The principal terms and conditions of the CP/MTN Programme include summaries of, and are subject to, the detailed provisions of the Trust Deed. A copy of the Trust Deed is available for inspection at the registered office of the Trustee, being the date hereof at 11 October 2012. The Noteholders are entitled to the benefit of the Trust Deed and are bound by, and are deemed to have notice of all the provisions of the Trust Deed applicable to them.
Principal Terms and Conditions of the CP/MTN Programme
(a) Names of parties involved in the CP/MTN Programme (i) Principal Adviser RHB Investment Bank
(ii) Joint Lead : RHB Investment Bank and AmInvestment Bank Arrangers
(iii) Co-arranger : Not applicable
(iv) Solicitors : Due Diligence Solicitors Mah-Kamariyah & Philip Koh
Legal Documentation Solicitors Albar & Partners
(v) Financial adviser : Astramina Advisory Sdn Bhd
(vi) Technical adviser : Not applicable
(vii) Trustee : Pacific Trustees Berhad
(viii) Guarantor(s) : The payment obligations of the Issuer in respect of the CP/MTN Programme will be guaranteed by irrevocable and unconditional bank guarantees to be issued under the following bank guarantee facilities (each is defined as “BG Facility”, and collectively, as “BG Facilities”) granted by the following financial institutions:
Tranche 1 (as defined herein) Guarantee Commitment RHB Bank Up to RM300.0 million including 1 coupon payment of the MTNs, where applicable.
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Tranche 2 (as defined herein) Guarantee Commitment AmBank Up to RM200.0 million including 1 coupon payment of the MTNs, where applicable.
AmBank and RHB Bank (each is defined as a“Guarantor Bank” and collectively as the “Guarantor Banks”)
The Guarantor Banks shall have the right to transfer or novate any of its guarantee commitment to another guarantor bank subject to always that there shall not be any adverse change to the rating for the CP/MTN Programme as a result of such novation or transfer.
(ix) Valuer(s) : Not applicable
(x) Facility agent : RHB Investment Bank
(xi) Primary subscriber : Bank Guaranteed Commercial Papers (“CPs”) (under a bought- Not applicable deal arrangement) and amount Bank Guaranteed Medium Term Notes subscribed (“MTNs”) The first issuance of the MTNs will be made on a bought deal basis to be subscribed by AmBank and RHB Investment Bank on a proportionate basis in accordance with the following commitment amount:
Primary Subscriber Commitment Amount (Up to RM million) AmBank 200.0 RHB Investment 300.0 Bank
Note: The CPs and MTNs shall collectively be referred to as the “Notes”.
(xii) Underwriter and : CPs amount The CPs may be underwritten if the Issuer and underwritten the Joint Lead Arrangers mutually agree based on terms and conditions, including those relating to the underwritten rate and the participation and underwriting fees, to be agreed.
In the event underwriting (either partial or full) is required, the CPs shall be underwritten by a consortium of eligible financial institutions
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(“Underwriters”) to be arranged by the Joint Lead Arrangers on a best effort basis.
The Underwriters severally commit themselves to purchase the CPs not taken up by the Tender Panel Members (“TPMs”) at the underwritten rate, pro-rated to their underwriting commitment. Each of the Underwriters’ commitment shall be reduced by the nominal value of the CPs subscribed by that particular Underwriter, in its capacity as a TPM.
MTNs The first issuance of MTNs will be issued on a bought deal basis.
(xiii) Central depository : BNM
(xiv) Paying agent : BNM
(xv) Reporting : Not applicable accountant
(xvi) Calculation agent : Not applicable
(xvii) Others : Joint Lead : RHB Investment Bank and AmInvestment Bank Managers (“JLMs”)
Tender Panel : To be arranged by the Joint Lead Arrangers, Members (“TPM”) comprising a selection of financial institutions licensed under the Banking and Financial Institutions Act 1989 and/or Islamic Banking Act 1983, insurance companies licensed under the Insurance Act 1996 and/or Takaful Act 1984, approved corporations and such other persons as specified in Schedule 6 (or Section 229(1)(b)), Schedule 7 (or Section 230(1)(b)) read together with Schedule 9 (or Section 257(3)) of the CMSA, as amended from time to time. The composition of the TPM may be varied from time to time by the JLMs subject to agreement of the Issuer.
(b) Facility description : Bank guaranteed Commercial Papers and/or Medium Term Notes issuance pursuant to an up to RM500.0 million Bank Guaranteed CP/MTN Programme (“CP/MTN Programme”) comprising the following tranches:
(i) Up to RM300.0 million CP/MTN to be guaranteed by RHB Bank (“Tranche 1”); and
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(ii) Up to RM200.0 million CP/MTN to be guaranteed by AmBank (“Tranche 2”).
(c) Issue/programme : Up to RM500.0 million in nominal value. size The aggregate nominal value of CPs and MTNs outstanding including one (1) coupon of the MTNs (if any) shall not exceed RM500.0 million at any point in time, and subject to the following reduction schedule (“Reduction Schedule”):
At the Reduction Amount Program end of % of the RM me Size year* Programme Million after limit Reduction (RM Million) 1-3 Nil Nil 500.0 4 15 75.0 425.0 5 15 75.0 350.0 6 30 150.0 200.0 7 40 200.0 0.0 Total 100 500.0 * from first issuance of the Notes
Subject to early redemption clause in item (u)(ii), the programme size will be reduced in accordance with the Accelerated Reduction Amount (as defined herein) in direct order of the Reduction Schedule.
“Accelerated Reduction Amount” is defined as the nominal amount of Notes early redeemed by the Issuer from monies standing to the credit of the proceeds account to be opened and operated under the BG Facilities.
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(d) Tenure of issue/debt : CP/MTN Programme programme (or Up to seven (7) years from the date of first facility) issuance provided that the first issue of the CPs/MTNs shall not be later than two (2) years from the date of the SC approval.
CPs One (1) to twelve (12) months as may be determined by the Issuer and the Joint Lead Arrangers.
MTNs More than one (1) year and up to seven (7) years or such other periods as may be determined by the Issuer and the Joint Lead Arrangers.
For the avoidance of doubt, no Notes shall mature beyond the tenure of the CP/MTN Programme.
(e) Availability period : The period commencing from the date of of debt programme completion of all documentation and compliance (or facility) of all conditions precedent and other applicable conditions to the satisfaction of the Joint Lead Arrangers and shall end on the expiry of the CP/MTN Programme.
(f) Interest / coupon : CPs rate Not applicable. However, the coupon refers to the difference between its nominal value and discount value.
MTNs The MTNs will be issued at par or at a premium or at a discount. The coupon rate shall be determined and agreed by the Issuer and JLMs prior to each issuance of the MTNs.
(g) Interest/coupon : CPs payment frequency Not applicable as the CPs will be issued at a discount.
MTNs The coupons are payable at semi-annual intervals in arrears with the first payment commencing six (6) months from the issue date of the MTNs and the last ending on the date falling on the maturity of the MTNs.
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(h) Interest/coupon : CPs payment basis Not applicable.
MTNs The coupon will be calculated on the basis of the actual number of days in the relevant period divided by 365 days and in any event, in accordance with the Operation Procedures for Securities Services issued by Malaysian Electronic Clearing Corporation Sdn Bhd (“MyClear”), as amended or substituted from time to time.
(i) Security/collateral : Clean.
The Notes shall be backed by irrevocable and unconditional bank guarantees (“BGs”) to be issued under the BG Facilities provided by the Guarantor Banks.
(j) Details on : The proceeds from the issuance of the Notes utilisation of shall be utilised for the following: proceeds by Issuer and originator (in (i) To refinance Dijaya’s revolving credit the case of ABS). If facility of up to RM100.0 million granted proceeds are to be by RHB Bank; utilised for project or capital (ii) To pay for fees and expenses incidental to expenditure, the issuance and establishment of the description of the CP/MTN Programme of up to RM8.5 project or capital million; and expenditure, where applicable (iii) To fund the working capital and general corporate purpose of the Issuer and/or its subsidiaries.
Any amount not utilised for item (i) and (ii) can be utilised for item (iii).
Proceeds from any subsequent issues (other than the first issuance) of the Notes may be utilised by the Issuer to redeem any maturing CPs and/or MTNs under the CP/MTN Programme and/or for the purposes in (ii), if applicable, and (iii) above.
(k) Sinking fund and : None. designated accounts (if any)
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(l) Rating : Tranche 1 • Credit rating(s) Short term rating of P1(bg) and long term rating assigned of AA2(bg).
Tranche 2 Short term rating of P1(bg) and long term rating of AA3(bg).
• Name of rating RAM Rating Services Berhad (“RAM”) agency
(m) Mode of issue : Competitive tender by the TPMs or direct placement on a best effort basis or a bought deal basis or book-building/bookrunning on a best efforts basis.
(n) Selling restriction, : The CPs and/or MTNs are tradable but shall not including be offered, sold, transferred or otherwise tradability (i.e. disposed, directly or indirectly other than to tradable or non- persons falling within any of the categories of tradable) persons or in the circumstances specified under the following schedules of the CMSA:
(i) at the point of issuance of the Notes: Schedule 6 or Section 229(1)(b), Schedule 7 or Section 230 (1)(b) read together with Schedule 9 or Section 257(3).
(ii) after the issuance of the Notes: Schedule 6 or Section 229(1)(b) read together with Schedule 9 or Section 257(3) of the CMSA.
(o) Listing status and : The Notes will not be listed on Bursa Malaysia types of listing Securities Berhad (“Bursa Malaysia”) or any other stock exchanges.
(p) Other regulatory : Not applicable. approvals required in relation to the issue, offer or invitation and whether or not obtained (please specify)
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(q) Conditions : The issuance of the Notes shall be subject to the precedent following conditions including but not limited to:
For establishment of the CP/MTN Programme:
(i) Receipt of the following by the Joint Lead Arrangers and the Facility Agent:
(a) Certified true copies of the board resolution from the Issuer, authorising, amongst others, the establishment of the CP/MTN Programme, the issuance of the Notes, the execution of all the relevant legal documentation in relation to the CP/MTN Programme;
(b) Certified true copies of the Issuer’s Forms 24, 44 & 49, Memorandum & Articles of Association and a list of its authorised signatories and their specimen signatures;
(c) Satisfactory company search report on the Issuer;
(d) Satisfactory report of the winding-up search on the Issuer;
(ii) Completion and execution of the transaction documents in relation to the establishment of the CP/MTN Programme (“Transaction Documents”) and, where applicable, stamped and presented for registration;
(iii) All necessary approvals and consents, if required, (including but not limited to the existing financiers/lenders of the Issuer) for the implementation of the CP/MTN Programme have been obtained and compliance with all conditions to such approvals;
(iv) Receipt of redemption letter from RHB Bank in relation to item (j)(1) confirming the redemption amount;
(v) Approval from the SC shall have been obtained;
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(vi) Evidence that the BG Facilities have been put in place so as to be effective on the issue date;
(vii) The CP/MTN Programme have been assigned ratings of at least AA2(bg) (long term) and P1(bg) (short term) for Notes to be issued under Tranche 1 and at least AA3(bg) (long term) and P1(bg) (short term) for Notes to be issued under Tranche 2 from the rating agency;
(viii) Evidence that all relevant fees due and payable by the Issuer in connection with the CP/MTN Programme have been paid in full or will be paid in a manner agreed by the transaction parties;
(ix) Legal opinion from the Legal Documentation Solicitors confirming that (a) the Transaction Documents are legally valid, binding and enforceable; and (b) all conditions precedent to the CP/MTN Programme have been fulfilled to the satisfaction of the Joint Lead Arrangers; and
: (x) Such other conditions precedent as may be advised by the Legal Documentation Solicitors.
For each issuance(s) of the Notes, shall include:
(i) Evidence that the BGs under the BG Facilities for the Notes are available for the entire tenure (plus any relevant claim period) of the issuance;
(ii) Confirmation from the Issuer that it is in compliance with all relevant representations and warranties;
(iii) No Event of Default has occurred or is continuing; and
(iv) Such other conditions precedent as may be advised by the Legal Documentation Solicitors.
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(r) Representations : Representations and warranties applicable to and warranties each issue include but are not limited to the following:
(i) The Issuer is a company duly incorporated and existing under Malaysian law and has the power and authority to enter into the business in which it is engaged;
(ii) The Issuer (to the extent where it is a party) has the power to enter into, exercise its rights under and perform its obligations under the Transaction Documents to which it is a party;
(iii) All necessary actions, authorisations and consents required by the Issuer under the Transaction Documents to which it is a party by the Issuer have been taken, fulfilled and obtained and remain in full force and effect;
(iv) The Issuer’s entry into the Transaction Documents (to which it is a party), exercise of its rights under and performance of the Transaction Documents do not and will not violate any existing law or any agreements to which it is a party;
(v) The Transaction Documents to which it is a party create valid and binding obligations which are enforceable against the Issuer;
(vi) The Issuer’s audited financial statements will be and are prepared in accordance with approved accounting principles and standards in Malaysia and fairly represent its financial position;
(vii) There has been no change in the business or condition (financial or otherwise) of the Issuer or its subsidiaries since the date of its last audited financial statements which might have a material adverse effect;
(viii) No event that would constitute a contravention of or default under the Transaction Documents has occurred;
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(ix) No litigation or arbitration is current or, to the best of the Issuer’s knowledge, information and belief, is threatened, which if adversely determined would have a material adverse effect; and
(x) Such other representations and warranties as may be advised by the Legal Documentation Solicitors.
(s) Events of default : Events of Default applicable to each issue (or enforcement include but are not limited to the following: event, where applicable) (i) The Issuer is unable to pay any coupon and principal amount due under the CP/MTN Programme on the due date or, if so payable, on demand;
(ii) The Issuer is unable to pay any amount due other than the coupon and principal under any of the Transaction Documents on the due date or, if so payable, on demand within fourteen (14) business days of such due date;
(iii) If any step or action is taken for the winding-up, dissolution or liquidation of the Issuer (including, without limitation, the presentation of a petition for the winding-up of the Issuer where no action is taken in good faith to set aside such petition within thirty (30) days from the date of service of such winding-up petition or the making of any order or the passing of any resolution for the winding-up, dissolution or liquidation of the Issuer);
(iv) If any step or action is taken for the winding-up, dissolution or liquidation of any of the Issuer’s subsidiary which may have a material adverse effect;
(v) If the Issuer enters into a scheme of arrangement under Section 176 of the Companies Act 1965 or such a scheme has been instituted against the Issuer (other than for the purpose of a scheme of reconstruction, amalgamation, consolidation or merger, unless during or following such reconstruction, amalgamation, consolidation or merger the Issuer becomes or is declared to be insolvent);
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(vi) If an encumbrancer takes possession of or a receiver, liquidator or similar officer is appointed over the whole or a substantial part of the assets or undertaking of the Issuer;
(vii) If the Issuer commits any breach of or omits to observe any of the obligations or undertakings expressed to be assumed by the Issuer under the CP/MTN Programme (other than its payment obligations) and in respect of any such breach or omission which:
(a) has a material adverse effect; and (b) is capable of remedy,
the Trustee does not determine within thirty (30) days after becoming aware of the failure, that the breach or omission has been remedied to its satisfaction;
(viii) If the Issuer makes any representation or warranty which is incorrect in any material respect when made or repeated;
(ix) If any indebtedness of the Issuer become (after the expiration of any applicable grace period) due and unpaid or is declared due before its stated maturity or where the security created for any other indebtedness becomes enforceable;
(x) If the Issuer ceases to carry on the whole or substantially the whole of its business or where there is expiry or withdrawal, revocation, termination, withholding or modification of their subsidiaries’ licences, permits, consents, authorisations or approvals that impair or prejudice the Issuer’s ability to comply with the Transaction Documents to which it is a party or the terms of the CP/MTN Programme;
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: (xi) If it becomes unlawful or illegal for the Issuer to perform or comply with their obligations under the Transaction Documents to which it is a party or any of the provisions of the said Transaction Documents becomes void, voidable or unenforceable;
(xii) If the Issuer repudiates any of the Transaction Documents or any agreement relating to the CP/MTN Programme or does any act or thing evidencing an intention to do so;
(xiii) If any agency, authority or governmental body seizes, compulsorily acquires, expropriates or nationalises any assets, undertakings, rights or revenue of the Issuer;
(xiv) Any of the Guarantor Banks has served a notice to require the Trustee to make a demand or claim on any BGs pursuant to and in accordance with the terms of the BG Facility;
(xv) Issuer fails to satisfy any judgment which has a material adverse effect passed against it by any court of competent jurisdiction and no appeal against such judgment has been made to the appropriate appellate court within the time prescribed by law or such appeal has been dismissed; and
(xvi) Such other events as may be advised by the Legal Documentation Solicitors.
The occurrence of any of the following events in respect of any of the Guarantor Banks:
(a) any BG ceases to be, or is claimed by the Guarantor Bank not to be, in full force and effect;
(b) it is or will become unlawful for the Guarantor Bank to perform or comply with any one or more of its obligations under the BG;
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(c) a resolution being passed or an order of court is made that the Guarantor Bank be wound up or similar proceedings which are reasonably determined by the Trustee to be analogous in effect being instituted or a bona fide petition (which for the avoidance of doubt, excludes frivolous or vexatious petition) is presented for the winding-up or dissolution of the Guarantor Bank by an order of a court of competent jurisdiction unless an application to stay, withdraw or dismiss such petition has been filed by the Guarantor Bank with the relevant authority within thirty (30) days of its presentation and such petition is stayed, withdrawn or dismissed within seventy five (75) days of its presentation;
(d) the Guarantor Bank ceases to carry on its business operation;
(e) Such other events as may be advised by the Legal Documentation Solicitors.
Upon the occurrence of an Event of Default referred to in item (s)(i) and/or (s)(ii), the Trustee shall without the need to seek further instructions or directions from the Noteholders, declare that such Event of Default has occurred in respect of the Notes whereby:
(i) no further issuance of Notes may be made under the CP/MTN Programme and all of the outstanding Notes together with all other sums payable shall become immediately due and payable;
(ii) the Trustee shall have recourse to all remedies made available under the Transaction Documents and the Issuer will reimburse all parties for all losses and expenses incurred in consequence of the Event of Default;
(iii) the Trustee may call on the BGs under the BG Facility for all payments due and payable under the CP/MTN Programme; and/or
(iv) the Trustee shall take proceedings as it may think fit to enforce immediate payment of all outstanding CPs/MTNs issued.
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Upon the occurrence of any Event of Default (other than the Event of Default referred to in item (s)(i) and (s)(ii)), the Trustee may at its sole and absolute discretion and shall if directed to do so by the Noteholders pursuant to a special resolution, declare that such Event of Default has occurred in respect of the Notes, whereby:
(i) no further issuance of Notes may be made under the CP/MTN Programme and all of the outstanding Notes together with al other sums payable shall become immediately due and payable;
(ii) the Trustee shall have recourse to all remedies made available under the Transaction Documents and the Issuer will reimburse all parties for all losses and expenses incurred in consequence of the Event of Default;
(iii) the Trustee may call on the BGs under the BG Facility for all payments due and payable under the CP/MTN Programme; and/or
(iv) the Trustee shall take proceedings as it may think fit to enforce immediate payment of all outstanding CPs/MTNs issued.
(t) Covenants Positive Covenants : Standard positive covenants for a facility of this nature, including but not limited to:-
(i) The Issuer will preserve and keep in full force and effect all consents and rights necessary for the conduct of its business;
(ii) The Issuer shall exercise reasonable diligence in carrying out its business in a proper and efficient manner which should ensure, amongst others, that all necessary approvals or relevant licences are obtained;
(iii) The Issuer shall deliver to the Trustee such information as requested by the Trustee, including but not limited to the following:
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(1) as soon as they become available (and in any event within one hundred and eighty (180) calendar days after the end of each financial year) copies of its financial statements for that financial year which shall contain the income statement, balance sheet and cash flow statement of the Issuer and which are audited and certified without qualification by independent accountants permitted under applicable laws;
(2) as soon as they become available (and in any event within ninety (90) calendar days after the end of each quarter of its financial year) copies of its unaudited quarterly financial statements for that period which shall contain the income statement, balance sheet and cash flow statement of the Issuer which are duly certified by any one of the directors;
(3) at least on an annual basis, a certificate confirming that it has complied with all its obligations under the Transaction Documents and the terms and conditions of the CP/MTN Programme, and that there did not exist or had not existed, from the date the Notes were first issued or date of the previous certificate as the case may be, any Event of Default, and if such is not the case to specify the same;
(4) to the extent permitted by law, such information relating to the Issuer’s affairs which the Trustee may require in order to discharge its duties and obligations as trustee under the Transaction Documents;
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(iv) The Issuer shall notify the Trustee in the event that the Issuer becomes aware of the following:-
(1) any Event of Default or that such other right or remedy under the terms, provisions and covenants of the transaction documents have become immediately enforceable;
(2) any circumstance that has occurred that would materially prejudice the Issuer or any security included in or created by the Transaction Documents (where applicable);
(3) any change in withholding tax position or taxing jurisdiction of the Issuer;
(4) any change in the Issuer’s Board of Directors; and
(5) any other matter that may materially prejudice the interest of the Noteholders;
(v) The Issuer will at all times maintain a paying agent for the Notes in Malaysia, and the Issuer shall cause and procure such paying agent to notify the Trustee (through a facility agent) in the event the paying agent does not receive payment from the Issuer on the due dates as required under the Notes;
(vi) The Issuer will keep proper books and accounts at all times and to provide the Trustee and any person appointed by it to have access to such books and accounts;
(vii) The Issuer will comply with all provisions and perform all its obligations under the Transaction Documents;
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(viii) Ensure that all loans or advances from its directors, shareholders and related corporation and affiliates are subordinated to the CP/MTN Programme. However, the Issuer shall be entitled to redeem any redeemable convertible unsecured loan stocks (“RCULS”) issued by it provided that all covenants under the CP/MTN Programme and the BG Facilities are complied with before and after such redemption; and
(ix) Such other covenants as may be advised by the Legal Documentation Solicitors.
Negative covenants : Standard negative covenants for a facility of this nature, including but not limited to the following:-
(i) no substantial change in the nature of the business of the Issuer;
(ii) no change in the utilisation of proceeds of the Notes as set out in the Programme Agreement and the Trust Deed;
(iii) the Issuer shall not lend or make advances to any person other than to its subsidiaries or its related or associated companies;
(iv) the Issuer shall not incur, assume or permit to exist any loans or advances from its directors or shareholders unless these loans and advances are subordinated to the CP/MTN Programme;
(v) The Issuer shall not permit any amendment, supplement or variation to its Memorandum and Articles of Association in a manner which may be materially prejudicial to the interests of the Noteholders;
(vi) The Issuer shall not surrender, transfer, assign, relinquish or otherwise dispose of any of its rights and interests or transfer any of its obligations under any of the Transaction Documents;
(vii) The Issuer shall not reduce its authorised and issued and paid-up capital; and
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(viii) The Issuer shall not enter into a transaction, whether directly or indirectly with any interested persons (as defined in the Main Market Listing Requirements of Bursa Securities (“Listing Requirements”) (“Interested Persons”) unless:
(1) such transaction shall be on terms that are no less favourable to the Issuer than those which could have been obtained in a comparable transaction from persons who are not Interested Persons; and
(2) with respect to any transaction involving an aggregate payment or value equal to or greater than the prescribed percentage ratio as provided in the Listing Requirements, the Issuer shall obtain certification from an independent adviser that the transaction is carried out on fair and reasonable terms;
PROVIDED that the Issuer certifies to the Trustee that the transaction complies with sub- paragraph (1) above, that the Issuer has received certification referred to in sub-paragraph (2) above (where applicable) and that the transaction has been approved by the majority of the board of directors or shareholders in a general meeting as the case may require; and
(3) with respect to any transaction constituting a recurrent related party transaction of a revenue or trading nature (“RRPT”) which is provided for and permitted under the Listing Requirements;
PROVIDED that the Issuer certifies to the Trustee that the transaction complies with sub- paragraph (1) above, that the Issuer has obtained or renewed, where applicable, the shareholders’ mandate in accordance with the Listing Requirements and that the Issuer furnishes at least one (1) certificate to the Trustee in respect of the RRPT contemplated under one (1) shareholders’ mandate; and
(ix) Such other covenants as may be advised by the Legal Documentation Solicitors.
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(u) Provisions on buy- back and early redemption of bonds (i) Redemption on : Unless previously redeemed, purchased and maturity cancelled, the Notes shall be redeemed at 100% of their nominal value on their respective maturity dates.
(ii) Early redemption : Subject to the consent of the Noteholders by an extraordinary resolution in accordance with the terms of the Trust Deed, the Issuer may redeem the Notes (in whole or in part) prior to their maturity by giving the requisite notice set out in the Trust Deed at a redemption price to be mutually agreed between the Issuer and the Noteholders PROVIDED THAT in the case of the early redemption of such Notes which is funded by the Accelerated Reduction Amount (which shall be redeemed in the natural order of maturity), only the consent of 75% of the holders of such relevant Notes is required.
(v) Other principal terms and conditions for the issue
(i) Purchase and : The Issuer or its subsidiaries or its agent(s) may cancellation at any time purchase the Notes at any price in the open market or by private treaty, but these purchased Notes shall be cancelled and cannot be reissued.
(ii) Interested persons : The Notes held by the Issuer or any interested person of the Issuer shall not be counted for purposes of voting at any meeting of the Noteholders. Interested persons shall include directors, major shareholders and chief executive as defined under the SC’s Trust Deeds Guidelines but will not include the categories of major shareholders as provided under the exception in paragraph 22.04 of the SC’s Trust Deeds Guidelines.
(iii) Late payment : Additional 1.0% p.a. above the coupon rate (for penalty the MTNs) and/or above the successful weighted average cost of fund (for the CPs) on the outstanding amount due of the relevant Notes from the due date up to the actual payment date (inclusive).
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(iv) Transaction : Shall include but not limited to: Documents (i) Programme Agreement;
(ii) Trust Deed;
(iii) Securities Lodgement Form for Central Securities Depository and Paying Agency Services; and
(iv) Any other relevant documents as advised by the Solicitors.
(v) Taxation : All payments by the Issuer shall be made without withholding or deductions for or on account of any present or future tax, duty or charge of whatsoever nature imposed or levied or on behalf of Malaysia or other applicable jurisdictions, or any authority thereof or therein having power to tax, unless such withholding or deduction is required by law, in which event the Issuer shall be required to make such additional amount so that the payee would receive the full amount which the payee would have received if no such withholding or deductions were made.
(vi) Trustee’s : The Issuer shall set up a “Trustees’ Reimbursement Reimbursement Account” for Noteholders’ Account actions with a sum of RM30,000 (which shall be maintained at all times throughout the tenure of the CP?MTN Programme). The account shall be operated solely by the Trustee and the money shall only be used strictly by the Trustee in carrying out its duties in relation to the occurrence of an Event of Default which are to be provided in the relevant Transaction Documents.
(vii) Governing Law and : Laws of Malaysia and non-exclusive jurisdiction Jurisdiction of the Courts of Malaysia.
(viii) Principal terms and : conditions of the BG Facility
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(a) Type of Facility : Unconditional and irrevocable bank guarantee to guarantee the redemption of the nominal value of the Notes to be issued by the Issuer under the CP/MTN Programme and in the case of MTNs issued, including one coupon payment of the MTNs (“Guaranteed Amount”) Provided Always that the aggregate BGs issued (including one coupon payment of the MTNs) by the Guarantor Banks shall not exceed the limit of the BG Facilities.
(b) Tenure : The tenure of each BG shall be for a period beginning from the date of issuance of such Notes guaranteed by such BG and shall end on the maturity date of such Notes.
(c) Other Terms : Such other terms as may be imposed by the Guarantor Banks and agreed with the Issuer.
(d) BG Facility Limit : The limit of the BG Facility shall be reduced in Reduction accordance with the Reduction Schedule under the CP/MTN Programme.
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3. BACKGROUND INFORMATION ON THE ISSUER
3.1 Corporate History and Principal Activities
Dijaya was incorporated on 2 June 1979 in Malaysia under the Companies Act as a private limited company under the name of Itama Sdn Berhad. On 4 February 1982, its name was changed to IGB Fibre-Cement Products Sdn Bhd and subsequently to Jasa Megah Industries Sdn. Berhad on 30 July 1984. On 1 July 1991, it was converted to a public limited company under the name of Jasa Megah Industries Berhad before assuming its present name as Dijaya Corporation Berhad on 3 June 1997. Dijaya was officially listed on the Main Board of Bursa Securities on 18 August 1992.
The principal activities of Dijaya are investment holding and provision of management services. The principal activities of its subsidiaries and associated company are, amongst others, property investment, property development, property management and maintenance services, credit and leasing, investment holding, real property and resort development, management of car parking facilities, education services and manufacture and sale of explosives, chemicals and blasting accessories.
3.2 Share Capital Structure
The authorised, issued and paid-up share capital of Dijaya as at 7 September 2012 are as follows:
Type No. of Shares Par Value (RM) Total (RM)
Authorised Dijaya Shares 3,000,000,000 1.00 3,000,000,000
Issued and paid-up Dijaya Shares 460,670,720 1.00 460,670,720
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3.3 Shareholding Structure
The substantial shareholders and their shareholdings in Dijaya as per the Register of Substantial Shareholders of Dijaya as at 7 September 2012 are as follows:
Country of Direct Interest Indirect Interest Substantial Shareholders Incorporation/ Nationality No. of Shares %* No. of Shares %*
(2) TSDTCS Malaysian 140,043,934 30.40 165,840,769 36.00 IASB Malaysia 82,007,76117.80 - -
GDSB Malaysia 83,833,00818.20 - -
TAEL One Partners Ltd Cayman Islands 33,000,000 7.16 - - (“TAEL”)(1)
United Overseas Bank Ltd Singapore - - 33,000,000(3) 7.16 (“UOBL”)
Tan Sri Dato’ Seri Vincent Tan Malaysian - - 31,600,000(4) 6.86 Chee Yioun
Berjaya Corporation Berhad Malaysia - - 31,600,000(5) 6.86
Berjaya Group Berhad Malaysia - - 31,600,000(6) 6.86
Juara Sejati Sdn Bhd Malaysia - - 31,600,000(7) 6.86
Notes:
(1) TAEL is acting in its capacity as general partner of The Asian Entrepreneur Legacy One, L.P. (2) Deemed interested by virtue of his interests in IASB and GDSB pursuant to Section 6A of the Companies Act. (3) Deemed interested by virtue of its investment in The Asian Entrepreneur Legacy One, L.P. pursuant to Section 6A of the Companies Act. (4) Deemed interested by virtue of his interest in Berjaya Corporation Berhad, the ultimate holding company of Berjaya Sompo Insurance Berhad and his interest in Berjaya Assets Berhad, the holding company of Sublime Cartel Sdn Bhd. (5) Deemed interested by virtue of its 100% interest in Berjaya Group Berhad, the penultimate holding company of Berjaya Sompo Insurance Berhad and its deemed interest in Berjaya Assets Berhad, the holding company of Sublime Cartel Sdn Bhd. (6) Deemed interested by virtue of its deemed interest in Berjaya Capital Berhad, the holding company of Berjaya Sompo Insurance Berhad and its deemed interest in Berjaya Assets Berhad, the holding company of Sublime Cartel Sdn Bhd. (7) Deemed interested by virtue of its interest in Berjaya Capital Berhad, the holding company of Berjaya Sompo Insurance Berhad and its deemed interest in Berjaya Assets Berhad, the holding company of Sublime Cartel Sdn Bhd.
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3.4 Profile of the Board of Directors
The Board of Directors has the ultimate responsibility for the administration of the affairs of Dijaya. The profiles of the Directors of Dijaya as at 7 September 2012 are as follows:
Dato’ Rohana Binti Tan Sri Mahmood (Aged 58) (Independent Non-Executive Chairman)
Dato’ Rohana Binti Tan Sri Mahmood, a Malaysian aged 58, was appointed to the Board on 10 November 2004 and was later appointed as the Chairman of the Board on 22 January 2010.
Dato’ Rohana holds a Bachelor of Arts Degree (Hons) in Politics from the University of Essex, United Kingdom and Masters in International Relations from the University of Sussex, United Kingdom.
Dato’ Rohana’s working experience encompasses both the private and government sectors and she has extensive political and business network in Malaysia and the Asia Pacific region. She is the Chairman and co-founder of Ethos Capital, a Malaysian private equity fund that invests in Asian companies since 2007. She is the Chairman of RM Capital Partners Sdn Bhd and OMNI Petromaritime Sdn Bhd, and a board member of various private and listed companies, including AMMB Holdings Berhad, Paramount Corporation Berhad, AmWater Investments Management Pte Ltd, KDU University College Sdn Bhd and YIM Technology Resources Sdn Bhd. She is the President and founding member of the Kuala Lumpur Business Club, a Distinguished Fellow and a board member of the Institute of Strategic and International Studies Malaysia (“ISIS”). Prior to ISIS, she was attached to the Ministry of Foreign Affairs Malaysia. She is a member of Board of Trustees of the Asia Society, New York and a board member of Pacific Basin Economic Council. She is also a member of the board of trustee of Dijaya Tropicana Foundation, member founder and member of Board of Trustees of Yayasan Innovasi Malaysia, member of the Malaysian Committee of the Council for Security Cooperation in the Asia Pacific and member of the National Information Technology Council and also a member of Trustees of Malaysian Youth Orchestra Foundation.
Dato’ Rohana does not have any family relationship with any Directors and/or major shareholders of Dijaya, nor any personal interest in any business arrangement involving Dijaya. She has not been convicted of any offence within the past 10 years.
Tan Sri Dato’ Tan Chee Sing (Aged 57) (Group Chief Executive Officer)
Tan Sri Dato’ Tan Chee Sing, a Malaysian aged 57, was appointed to the Board on 5 July 1995. He is currently the Group Chief Executive Officer of Dijaya. He is a businessman and entrepreneur having a wide spectrum of businesses with extensive experience in property development, resort management, restaurants, leisure and entertainment operations through his investments in public and private limited corporations.
He is also the Chief Executive Officer of Tropicana Golf & Country Resort Berhad and the Executive Vice-Chairman of TT Resources Bhd. He is the Chairman of Sports Toto Malaysia Sdn Bhd and also a Director of U Mobile Sdn Bhd, a 3G mobile service provider. In addition, he is a member of the board of trustee of Dijaya Tropicana Foundation.
His son, Mr Dickson Tan Yong Loong and daughter, Ms Diana Tan Sheik Ni, are also members of the Board. Save as disclosed, TSDTCS does not have any family relationship with any other Directors and/or major shareholders of Dijaya, nor any personal interest in any business arrangement involving Dijaya except for certain recurrent related party transactions
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of a revenue or trading nature which are necessary for the day-to-day operations of Dijaya Group. He has not been convicted of any offence within the past 10 years.
Dato’ Tong Kien Onn (Aged 53) (Managing Director)
Dato’ Tong Kien Onn, a Malaysian aged 53, was appointed to the Board on 18 January 2002. He was appointed as the Managing Director of Dijaya on 10 May 2007. He is also the Chairman of the Option Committee of Dijaya.
Dato’ Tong is an Accountant by profession and an Associate member of The Chartered Institute of Management Accountants, United Kingdom.
Dato’ Tong has more than 25 years of experience in the finance and accounting fields through his employments with a number of Malaysian companies including United Prime Corporation Berhad. He joined Dijaya in 1991 as Senior Finance Manager, primarily responsible for Dijaya Group’s finance, accounting and treasury functions. He was promoted as General Manager of Finance and Administration in 2000 and was then promoted as Senior General Manager of Finance and Administration in the same year before he was appointed as an Executive Director in 2002. He sits on the board of Tropicana Golf & Country Resort Berhad, Berjaya Corporation Berhad Group and other private limited companies. He is also a member of the board of trustee of Dijaya Tropicana Foundation.
Dato’ Tong does not have any family relationship with any Directors and/or major shareholders of Dijaya, nor any personal interest in any business arrangement involving Dijaya. He has not been convicted of any offence within the past 10 years.
Mr Dickson Tan Yong Loong (Aged 31) (Deputy Managing Director)
Mr Dickson Tan Yong Loong, a Malaysian aged 31, was appointed to the Board on 20 May 2009 and was subsequently appointed as the Executive Director of Dijaya on 1 April 2010. He was designated as Deputy Managing Director of Dijaya on 8 October 2010. He is also a member of the Option Committee and Investment Committee of Dijaya.
Mr Tan graduated with a Bachelor of Science (Honours) in Business Management from King’s College, University of London, United Kingdom in 2002. He obtained a Master of Science in Internal Auditing and Management from Cass Business School, City University, United Kingdom in 2003.
Mr Tan started his career with CIMB Securities Sdn Bhd as an Equities Analyst in 2004 and joined Dijaya as Business Development Manager in 2005. He is presently overseeing group corporate strategy, planning and risk management of Dijaya Group. He currently serves on the board of Tropicana Golf & Country Resort Berhad, Berjaya Corporation Berhad, Berjaya Sports Toto Berhad, Berjaya Land Berhad, Berjaya Assets Berhad and several other local and international private limited companies involving manufacturing, services, media, leisure, retail, property development and property investment.
Mr Tan is affiliated with certain non-profit organisations, including as a member of the board of trustee of Dijaya Tropicana Foundation, a member of the Kuala Lumpur Business Club and a member of the Malaysian Institute of Management.
His father, TSDTCS, is the Group Chief Executive Officer, an Executive Director and a major shareholder of Dijaya. His sister, Ms Diana Tan Sheik Ni is a non-independent non-executive Director of Dijaya. Save as disclosed, he does not have any family relationship with any other Directors and/or major shareholders of Dijaya, nor any personal interest in any business
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arrangement involving Dijaya except for certain recurrent related party transactions of revenue or trading nature which are necessary for the day-to-day operations of Dijaya Group by virtue of him being the son of TSDTCS. He has not been convicted of any offence within the past 10 years.
Mr Kong Woon Jun (Aged 49) (Executive Director)
Mr Kong Woon Jun, a Malaysian aged 49, was appointed to the Board as an Executive Director on 1 March 2011. He is also a member of the Option Committee of Dijaya.
Mr Kong graduated with a Bachelor of Architecture (Honours) in 1989 from the University of Wales Institute of Science and Technology, Wales, United Kingdom. He is a Member of the Architects Registration Board in the United Kingdom and a corporate member of Pertubuhan Akitek Malaysia.
Mr Kong has more than 20 years of experience in property development and construction industry. He started his career as a Senior Architect in BEP Arkitek Sdn Bhd in-charge of high end property developments in year 1994. He served as the Director of Project and Product Planning of Perdana Parkcity Sdn Bhd from year 2003 to 2008, where he played a major role in the planning and designing of the township called Desa Park City, Kuala Lumpur. Prior to joining Dijaya, he joined TA Global Berhad in April 2008 as the Director of Planning & Design and was promoted to Chief Operating Officer in August 2008. With his experience in township master plan, he was actively involved in concept planning and product design for the projects under his supervision.
Mr Kong does not have any family relationship with any Directors and/or major shareholders of Dijaya, nor any personal interest in any business arrangement involving Dijaya. He has not been convicted of any offence within the past 10 years.
Mr Koong Wai Seng (Aged 45) (Executive Director)
Mr Koong Wai Seng, a Malaysian aged 45, was appointed to the Board as an Executive Director on 8 July 2011. He is also a member of the Option Committee of Dijaya.
He is an Accountant by profession and a member of the Malaysia Institute of Certified Public Accountant and Malaysian Institute of Accountants.
He has more than 17 years of financial management experience in a variety of industries including audit, financial advisory, leisure, hospitality, health care, property development and property investment. He started his career in Arthur Anderson & Company. Later, he was with Sunway City Berhad for 13 years and was promoted to Chief Financial Officer. Subsequently, he joined Sunway Holdings Berhad as Finance Director and Director of Investment with 1Malaysia Development Berhad prior to joining Dijaya.
Mr Koong does not have any family relationship with any Directors and/or major shareholders of Dijaya, nor any personal interest in any business arrangement involving Dijaya. He has not been convicted of any offence within the past 10 years.
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Dato’ Khoo Poh Chye (Aged 45) (Executive Director)
Dato’ Khoo Poh Chye, a Malaysian aged 45, was appointed to the Board as an Executive Director on 15 July 2011. He obtained the certification of Masters in Business Administration (Marketing) from Heriot Watt University, Edinburgh, Scotland in 1993 and his diploma in Accounting & Finance, Chartered Association of Certified Accountants (ACCA, UK) in 1992.
He has over 20 years of experience in the property industry including a 7 year stint with Pengurusan Danaharta Nasional Berhad (Danaharta), Malaysia’s National Asset Management Agency as the Deputy General Manager of its Property Division.
He has held several key management positions among others, as the Managing Director of GLM REIT Management Sdn Bhd (a wholly-owned subsidiary of Guocoland Malaysia Berhad), the Manager of Tower Real Estate Investment Trust, a real estate investment trust listed on Bursa Malaysia, Executive Director of Guocoland Malaysia Berhad, Hong Leong Malaysia’s property development company listed in Bursa Malaysia and the Executive Director of SunwayMas Sdn Bhd, the property division of Sunway Holdings Berhad. He does not hold any other directorship in other public company.
Dato’ Khoo does not have any family relationship with any Directors and/or major shareholders of Dijaya, nor any personal interest in any business arrangement involving Dijaya. He has not been convicted of any offence within the past 10 years.
Mr Loh Chen Peng (Aged 58) (Independent Non-Executive Director)
Mr Loh Chen Peng, a Malaysian aged 58, was appointed to the Board on 22 March 2004. He has been a member of the Audit Committee since 16 August 2004 and was subsequently re- designated as Chairman of the Audit Committee on 1 July 2011. He is also the Chairman of the Remuneration Committee and Investment Committee and a member of the Nomination Committee of Dijaya.
Mr Loh is an accountant by profession and a member of the Malaysian Institute of Certified Public Accountants (MICPA). He started his career with an international accounting firm in 1975 and gained membership to MICPA. He then joined a merchant banking group in 1980 and for the next 13 years, held senior management positions in the areas of corporate finance and corporate banking. Thereafter, he had a short stint with a stock broking group. In 1994, he helped establish a commercial bank and served on its Executive Committee of Directors until 2001.
He is currently involved in several private ventures. He also sits on the board of Berjaya Media Berhad, Berjaya Auto Berhad, AmInvestment Bank, AmIslamic Bank Berhad, AmFamily Takaful Berhad and several other private limited companies.
Mr Loh does not have any family relationship with any Directors and/or major shareholders of Dijaya, nor any personal interest in any business arrangement involving Dijaya. He has not been convicted of any offence within the past 10 years.
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Mr Tang Vee Mun (Aged 39) (Independent Non-Executive Director)
Mr Tang Vee Mun, a Malaysian aged 39, was appointed to the Board on 13 November 2009. He was appointed a member of the Audit Committee on 24 November 2011 and also a member of the Investment Committee of Dijaya.
He is the principal of Mettiz Capital Limited, an investment firm with particular focus on private equity and alternative investments.
He sits on the boards of several companies where he contributes time to their businesses with the objective of achieving strategic and corporate improvements. Beyond the business sphere, he is a trustee of 1Malaysia Community Alliance Foundation, a charitable foundation dedicated to crisis relief and community services, an investment committee member of Koperasi Jayadiri Berhad, an education loans and micro credit provided to the underprivileged, a committee member of the Gold Coast Dharma Realm Incorporated, and a disciplinary committee member of the Royal Selangor Golf Club.
Mr Tang graduated with a Bachelor of Laws (Honours) Degree from the London School of Economics and Political Science, University of London and was admitted as a Barrister-at- Law of the Honourable Society of Lincoln’s Inn, London.
Mr Tang does not have any family relationship with any Directors and/or major shareholders of Dijaya, nor any personal interest in any business arrangement involving Dijaya. He has not been convicted of any offence within the past 10 years, other than traffic offences.
Datuk Seri Panglima Mohd Annuar Bin Zaini (Aged 61) (Independent Non-Executive Director)
Datuk Seri Panglima Mohd Annuar Bin Zaini, a Malaysian aged 61, was appointed to the Board on 27 January 2010. He is a member of several committees of Dijaya such as Audit Committee, Nomination Committee, Remuneration Committee and Investment Committee.
Datuk Seri Panglima holds a Master of Arts in Law & Diplomacy from The Fletcher School of Laws & Diplomacy, Tufts University, United States of America and a Bachelor of Arts with honours in Economics from University Kebangsaan Malaysia.
He began his career in the government service as an Administrative and Diplomatic Officer in 1977. He served at various ministries and departments in the Malaysian Government and also the Perak State Government until he chose to take an optional retirement from the government service in 1999.
He was the Advisor and Chief Executive of Northern Corridor Implementation Authority from 2007 to 2009 and the Chairman of Malaysian National News Agency (BERNAMA) from February 2004 to January 2010. In February 2004, His Royal Highness The Sultan of Perak consented his appointment as Member of the Council of Elders to His Royal Highness Sultan of Perak. He is a Member of the Perak Council of Islamic Religion and Malay Customs and the Perak State Islamic Economic Development Corporation. He is also a Distinguished Fellow to Institute of Strategic and International Studies (ISIS) Malaysia and Adjunct Professor of Northern Corridor Economic Region Research Centre, Universiti Utara Malaysia. He sits on the board of Manulife Holdings Berhad and several private limited companies.
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Datuk Seri Panglima does not have any family relationship with any Directors and/or major shareholders of Dijaya, nor any personal interest in any business arrangement involving Dijaya. He has not been convicted of any offence within the past 10 years.
Dato’ Ng Tian Sang @ Ng Kek Chuan (Aged 65) (Independent Non-Executive Director)
Dato’ Ng Tian Sang @ Ng Kek Chuan, a Malaysian aged 65, was appointed to the Board on 29 March 2011. He was appointed as member of the Audit Committee of Dijaya on 1 July 2011. In addition, he is the Chairman of the Nomination Committee and a member of the Remuneration Committee of Dijaya.
Dato’ Ng graduated with a Bachelor of Commerce degree from the University of Western Australia in 1971. He is a member of the Malaysian Institute of Accountants and Australian Association of Certified Practising Accountants. He is a member of the Australian Institute of Company Directors.
Dato’ Ng was attached with IBM World Trade Corporation from 1973 to 1979 as a Business Controller. From 1980 to 1992, he ventured as an entrepreneur involved in real estate development and other businesses.
Dato’ Ng was the Executive Deputy Chairman of PanGlobal Bhd and Chairman of PanGlobal Insurance Bhd from 1995 to 1999. From 1996 to 1999, Dato’ Ng was the Executive Chairman of Econstate Bhd. He was the Deputy President of the Real Estate and Housing Developers’ Association from 1997 to 1999. He was accorded the International Honorary President of the Western Australia Chinese Chamber of Commerce in 1997. He was appointed as the Chairman and Chief Executive Officer of Datong Bhd and was also a director of TT Resources Bhd from July 2001 to November 2008. He was the Executive Director of Midwest Corporation Ltd (“MidWest”) from 2006 to 2009. MidWest is involved in iron ore mining in West Australia.
Dato’ Ng does not have any family relationship with any Directors and/or major shareholders of Dijaya, nor any personal interest in any business arrangement involving Dijaya. He has not been convicted of any offence within the past 10 years.
Ms Diana Tan Sheik Ni (Aged 26) (Non-Independent Non-Executive Director)
Ms Diana Tan Sheik Ni, a Malaysian aged 26, was appointed to the Board on 28 February 2012.
Ms Diana Tan graduated with a Bachelor of Laws (LLB) from King's College, University of London, United Kingdom in 2007.
She is an Executive Director of TT Resources Bhd where she oversees the strategic planning and management of TT Resources Bhd Group's business operations.
She is a director of Tropicana Golf & Country Resort Bhd and also holds directorships in other private limited companies. She also sits on the board of trustee of Dijaya Tropicana Foundation, a non-profit organisation.
Her father, TSDTCS, is the Group Chief Executive Officer and major shareholder of Dijaya. Her brother, Mr Dickson Tan Yong Loong, is the the Deputy Managing Director of Dijaya. Save as disclosed, she does not have any family relationship with any other Directors and/or major shareholders of Dijaya, nor any personal interest in any business arrangement involving Dijaya except for certain recurrent related party transactions of revenue or trading nature
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which are necessary for the day-to-day operations of Dijaya Group by virtue of her being a daughter of TSDTCS. She has not been convicted of any offence within the past 10 years.
3.5 Profile of Key Management
As at 7 September 2012, the key management of Dijaya and their respective profiles are as follows:
Mr Leslie Kho (Executive Director, Property Development of Tropicana Danga Bay at Johor Bahru)
Mr Leslie Kho holds a MBA in Construction and Real Estate (Reading, United Kingdom), Post Graduate Diploma in Project Management (RICS, UK), BBA in Valuation and Land Economy (Curtin, Australia), Membership of Royal Institution of Chartered Surveyors (United Kingdom), Membership of Royal Institution of Surveyors, Malaysia and a Registered Valuer Estate Agent and Property Manager with the Board of Valuers, Appraisers and Estate Agents Malaysia. He has over 22 years of experience in property consultancy, development, marketing and management. Prior to joining Dijaya, Mr Kho was a director at Knight Frank Malaysia and also previously worked with public-listed developer companies in Malaysia and Singapore at senior management level.
Mr Daniel Teh (General Manager, Property Development)
Mr Teh holds a Bachelor of Architecture (Hons II), Newcastle, New South Wales, Australia and Bachelor of Science (Arch), Newcastle, New South Wales, Australia. He commenced his career practising architecture from 1989 with various architecture firms as Project Architect for Veritas Architects, Akitek Binarjaya and CS Lim. In the year 2004, he joined Gerbang Perdana Selatan Bersepadu to head their Design Management team, as part of the “Design & Built” contract under the Government of Malaysia. On completing the project, Daniel seized an opportunity in Dubai, UAE with the reputable Nakheel Group, one of the prime developers to plan the New Waterfront City in Jebel Ali. On return to Malaysia in 2009, he joined 1Malaysia Development Berhad (1MDB), as a Director, Project Management, to conceptualise their flagship developments, Sungai Besi Airport Redevelopment and Kuala Lumpur International Financial District in Jalan Imbi. In 2010, he joined Dijaya as General Manager of Property Development.
Mr Herman Tan Kar Eng (Senior General Manager, Tropicana Golf & Country Resort)
Mr Herman Tan has wide experience in the food & beverage hospitality and club industry having served as Food & Beverage Manager of Federal Hotel, Ferringhi Hotel, Phoenix Hotel Singapore and Hotel Manager Renaissance Cruise. His Club and Resort Management experience include being the General Manager of Bukit Kiara Equestrian & Country Resort and Kelab Darul Ehsan. He joined Tropicana Golf & Country Resort as Deputy General Manager in April 2003 and was promoted to General Manager in 2005 and Senior General Manager in 2009.
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Mr Eason Phan (Senior General Manager, Property Development)
Mr Phan has more than 16 years of experience in construction and property development. He began his career with local conglomerate Sunway Construction Berhad as Graduate Engineer and rose through the ranks, from being a hands-on engineer to holding various senior managerial roles in planning, operation management, business development, process improvement and his last position was Head of Special Unit at group level. Prior to joining Dijaya, he was with a boutique developer involved with niche high-end property developments. Mr Phan’s principles were influenced by the many successes he and his team achieved in turning around businesses and development projects, through sound engineering practices and continuous improvement.
Mr You Boon Peng (Senior General Manager, Property Development of Tropicana Ivory at Penang)
Mr You is a civil engineering graduate from University of Manchester Institute of Science and Technology, United Kingdom and is currently a member of the Institute of Engineers Malaysia and a professional engineer with the Board of Engineers, Malaysia. He has 31 years of working experiences in engineering and property development and this includes a 14-year stint at Horsedale Development Berhad (a subsidiary of DRB-Hicom). His last position before joining Dijaya was of a General Manager at Plenitude Berhad in Kedah and Penang.
Mr Lee Wee Kee (Senior General Manager, Property Development)
Mr Lee is a graduate in BE (Hons) in Civil Engineering from University of Malaya. He is also a Graduate Member of Institute of Engineers Malaysia and the Board of Engineers Malaysia. Mr Lee has more than 21 years of property development experience and has extensive exposure in handling large scale integrated mixed developments and high-end residential or commercial projects. Prior to joining Dijaya, he was the General Manager of GuocoLand (M) Bhd, heading the commercial/integrated development division.
Mr Yap Kian Leong (General Manager, Finance)
Mr Yap is a Chartered Accountant of Malaysian Institute of Accountants and Fellows of Chartered Association of Certified Accountants and Chartered Institute of Management Accounts. Mr Yap has more than 20 years of financial accounting and management experience in audit, property development, IT, broadcasting and media. He started his career in London as a Trainee Accountant with Newman & Co, before returning to Malaysia to joint Ernst & Young. Thereafter, he went into commercial industries and was in various roles as Senior Manager, Group Financial Controller, Principal Consultant and Partner in an accounting practice. Prior to joining Dijaya, he was the Head of Financial Services & Reporting with Astro Malaysia.
Mr Allan Ngu (General Manager, Group Corporate and Investment)
Mr Allan Ngu has 11 years of working experience in corporate finance and equity investments, covering mainly mergers and acquisitions, corporate and debt restructuring exercises, as well as debt and equity fund raising exercises. He started his career with the corporate finance department of Southern Investment Bank Berhad in 2001. He then joined Kuwait Finance House (M) Berhad as Assistant Manager, Investment Banking in 2006. Subsequently, he joined the Equities Dealing department of RHB Investment Bank Berhad in 2007 as Manager. He then left RHB Investment Bank Berhad to join Dijaya as Deputy
Confidential Page 36 Information Memorandum Dijaya Corporation Berhad
General Manager of Group Corporate & Investment in 2010 and was promoted to his current position in 2011.
Mr Jeffrey Tan (Deputy General Manager, Group Legal)
Mr Jeffrey Tan holds a LLB, BCommerce from Monash University, Australia and MSc (Information Technology in Business) from University of Lincoln, United Kingdom. He brings with him expertise and experience in corporate and commercial transactions, conveyancing, intellectual property commercialisation and technology procurement. Formerly a partner in a leading law firm in Kuala Lumpur, he now heads Group Legal at Dijaya.
Mr Ho Hon Chiap (General Manager, Property Management)
Mr Ho worked as a Construction Manager and Quantity Surveyor (Purchasing) for 11 years in Statecom Development Sdn Bhd and Amedeo Development Sdn Bhd (Brunei) after graduating from Tunku Abdul Rahman College. Upon completing his MSc. Property Asset Management from Sheffield Hallam University, Mr Ho joined Cempaka Asset Management Services Sdn Bhd as a Building Manager and served a tenure of 8 years before starting his employment with Dijaya.
Mr Yew Kong Chee (Deputy General Manager, Sales Administration)
Mr Yew has 17 years of sales and administrative experience in property industry. He had worked with SP Setia Berhad for 11 years as a sales executive and later promoted as Senior Manager. He joined Dijaya in year 2007 as Senior Manager and currently holds the position of a Deputy General Manager.
Ms Adelynn Chan (Senior General Manager, Group Human Resource)
Ms Chan holds Certified Professional with Australian Human Resource Institute, and Bachelor of Arts from University of Western Australia, Australia. She has over 16 years of human resource experience in the information communications technology/ telecommunications, manufacturing, automotive and professional services industries. She started her career in Berjaya Land Bhd. Later she was with Goon Huat Holdings for 3 years. She joined Tan Chong Motors as Assistant Manager for 4 years and was promoted to Human Resource Manager. Subsequently, she joined Nasioncom as Assistant Vice President, Human Resource, Atos Origin Services as Senior Manager, Human Resource and Head of Human Resource with SGL Carbon before joining Dijaya.
Ms Serena Lim (Senior Manager, Communications and Promotions)
Ms Lim gained experience in the communications, promotions and media industry during her tenure as an Account Manager with both local and international advertising agencies for more than 6 years. Prior to this, Ms Lim also worked with various international hotels such as The Ritz Carlton Kuala Lumpur and Renaissance Kuala Lumpur. Ms Lim joined Dijaya in 2005 and was appointed as a Manager in Communications and Promotions department. She was promoted to her current position in 2011.
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Ms Joanne Lee (Procurement Director, Group Procurement)
Ms Lee holds a Bachelor of Business Administration from National University of Malaysia and Diploma in Purchasing and Materials Management from the Malaysian Institute of Purchasing and Materials Management. She has 18 years of procurement, purchasing and logistic experience in various industries including property development, construction (overseas and local), manufacturing, hospitality, leisure and entertainment, shopping mall management, food and beverage and healthcare. With her vast procurement experience in the multinational companies and public listed companies, she successfully established the Group Procurement Division for IGB, Nam Fatt and Dijaya Group.
Ms Teh Peng Peng (General Manager, Group Company Secretary)
A chartered secretary of The Malaysian Institute of Chartered Secretaries and Administrators, Ms Teh has approximately 20 years of corporate secretarial practice and exposure in both the secretarial services industry as well as the commercial environment.
3.6 Information on Subsidiaries, Associated Companies and Jointly-Controlled Entities
As at 7 September 2012, Dijaya’s subsidiaries, associated companies and jointly-controlled entities are as follows:
Name Date and place of Issued and paid- Effective Principal activities incorporation up share capital equity (RM) interest (unless otherwise % stated)
Advent Nexus Sdn Bhd 10.05.2012 1,000,000 100 Property investment Malaysia
Aliran Peluang Sdn Bhd 10.05.2012 10 80 Property investment Malaysia
Arah Pelangi Sdn Bhd 14.09.1992 1,000,000 100 Property development Malaysia
Tropicana Serdang 30.03.1994 500,000 100 Property development Suria Sdn Bhd Malaysia (formerly known as Aspek Analisa Sdn. Bhd.)
Dijaya Credit & Leasing 18.03.1997 1,000,000 100 Credit and leasing Sdn Bhd Malaysia
Dijaya Development 06.05.1997 750,000 100 Property development Sdn Bhd Malaysia and investment holding
Dijaya Management 18.07.1996 2 100 Property management Services Sdn Bhd Malaysia and maintenance services
Dijaya Property Sdn 25.01.1995 5,250,002 100 Property development Bhd Malaysia
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Name Date and place of Issued and paid- Effective Principal activities incorporation up share capital equity (RM) interest (unless otherwise % stated)
Dijaya Tropicana Cove 08.07.1993 50,000 100 Investment holding Sdn Bhd (formerly Malaysia known as Accroway Sdn Bhd)
Terbit Berkat Sdn Bhd 18.09.1992 1,000,000 100 Investment holding Malaysia
Tropicana Education 27.10.2009 2 100 Dormant Sdn Bhd Malaysia
Tropicana Education 05.05.1997 500,000 70 Education services Management Sdn Bhd Malaysia
Tropicana Kampar 08.09.1994 1,000,000 100 Dormant Development Sdn Bhd Malaysia
Tropicana KL 11.08.2010 252,500 100 Property development Development Sdn Bhd Malaysia (comprising and property (formerly known as investment holding 250,000 ordinary Ace Rhythm Sdn Bhd) shares of RM1.00 each and 250,000 redeemable non- cumulative preference shares of RM0.01 each)
Tropicana Land Sdn 23.05.1989 50,000 100 Property investment Bhd Malaysia
Tropicana Senibong Sdn 18.04.2011 2 100 Property development Bhd (formerly known Malaysia and property as Aman Petaling Sdn investment Bhd)
Tropicana Subang 03.12.1996 50,002 100 Property development Development Sdn Bhd Malaysia (comprising 2 ordinary shares of RM1.00 each and 5,000,000 redeemable non- cumulative preference shares of RM0.01 each)
Dijaya Tropicana Danga 28.06.1996 2 100 Investment holding Bay Sdn Bhd Malaysia (“DTDBSB”)
Confidential Page 39 Information Memorandum Dijaya Corporation Berhad
Name Date and place of Issued and paid- Effective Principal activities incorporation up share capital equity (RM) interest (unless otherwise % stated)
Tropicana Development 25.11.1994 2 100 Investment holding (Penang) Sdn Bhd Malaysia (“TDPSB”) (formerly known as Seleksi Kembara Sdn Bhd)
Sumber Saujana Sdn 07.09.1989 1,235,000 100 Investment holding Bhd (“SSSB”) Malaysia
Tropicana Golf & 27.08.1990 10,000,000 100 Real property and Country Resort Berhad Malaysia resort development (“TGCRB”)
Bakat Rampai Sdn Bhd 03.11.1994 1,010,000 100 Investment holding (“BRSB”) Malaysia
Star Honour Limited 21.04.2010 United States 100 Investment holding Cayman Islands Dollars (“USD”) 50,000
Dijaya (Mauritius) 17.10.2006 USD2 100 Investment holding Limited (“DML”) Mauritius
Delta Maple View 15.04.1994 500,000 100 Property development Development Sdn Malaysia Bhd*
Alpha Renown Sdn 08.08.2012 2 100 Property investment Bhd* Malaysia
Quantum Summer Sdn 08.08.2012 2 100 Property investment Bhd* Malaysia
Ultra Radiant Sdn Bhd* 18.06.2012 2 100 Property investment Malaysia
Radiant Niche Sdn 10.05.2012 2 100 Property investment Bhd* Malaysia
Golddust Fortune Sdn 08.08.12 2 100 Property investment Bhd* Malaysia
Nextwealth 10.05.2012 2 100 Property investment Development Sdn Malaysia Bhd*
Everise Symphony Sdn 08.08.2012 2 100 Property investment Bhd* Malaysia
Jubilee Potential Sdn 08.08.2012 2 100 Property investment Bhd* Malaysia
Galakan Daya Sdn Bhd* 10.05.2012 2 100 Property investment Malaysia
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Name Date and place of Issued and paid- Effective Principal activities incorporation up share capital equity (RM) interest (unless otherwise % stated)
Aras Permata Sdn Bhd* 18.07.2012 2 100 Property investment Malaysia
Rentas Tegas Sdn Bhd* 08.08.2012 2 100 Property investment Malaysia
Precious Nation Venture 28.03.2012 2 100 Property investment Sdn Bhd* Malaysia
Tetuan Bintang Sdn 10.05.2012 2 100 Property investment Bhd* Malaysia
Upper Benefits Sdn 10.05.2012 2 100 Property investment Bhd* Malaysia
Phoenix Stellar Sdn 18.06.2012 2 100 Property investment Bhd* Malaysia
Golddust Master Sdn 18.06.2012 2 100 Property investment Bhd* Malaysia
Everest Dynamic Sdn 10.05.2012 2 100 Property investment Bhd* Malaysia
Angkasa Istima Sdn 18.06.2012 2 100 Property investment Bhd* Malaysia
Ambang Cendana Sdn 16.12.1995 5,000,000 100 Investment holding # Bhd Malaysia and renting of properties
Asas Kenari Sdn Bhd# 09.08.2005 2,000,000 100 Property development Malaysia
Coastal Recreation 16.01.1989 1,000,000 100 Property holding # Centre Sdn Bhd Malaysia
Daya Petaling Sdn Bhd# 06.01.2005 1,500,000 100 Property investment Malaysia and provision of car park services
Dijaya Plaza Sdn Bhd# 16.04.1990 1,000,000 100 Investment holding Malaysia
Ebony Legacy Sdn Bhd# 09.11.2009 100,000 100 Investment holding Malaysia
Istima Budi Sdn Bhd# 09.08.2005 1,500,000 100 Letting of properties Malaysia and property development
Image Pertiwi Sdn Bhd# 05.07.1995 50,000 100 Property development Malaysia and investment holding
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Name Date and place of Issued and paid- Effective Principal activities incorporation up share capital equity (RM) interest (unless otherwise % stated)
Intan Recreation Sdn 25.05.1978 15,000,000 100 Property investment, # Bhd Malaysia letting of properties and provision of car park services
Kuasa Cekapmas Sdn 17.07.2007 2,000 100 Property investment # Bhd Malaysia
Potensi Cekap Sdn Bhd# 20.09.2007 100,000 100 Property investment Malaysia
Punca Klasik Sdn Bhd# 03.05.1991 18,575,000 100 Property development Malaysia
Quantum Peace Sdn 29.10.1996 500,000 100 Property management # Bhd Malaysia
Star Triangle Network 13.06.1995 500,000 100 Property development # Sdn Bhd Malaysia
Taraf Permata Sdn Bhd# 08.01.2009 100,000 100 Investment holding Malaysia
Ultimate Support Sdn 30.09.1997 300,000 100 Investment holding # Bhd Malaysia
Windmax Region Sdn 03.03.2009 5,000 100 Investment holding # Bhd Malaysia
Subsidiaries of DTDBSB
Tropicana Danga Bay 17.06.2010 24,414,440 60 Property development Sdn Bhd (“TDBSB”) Malaysia (comprising 1,000,000 ordinary shares of RM1.00 each, 40,000,000 redeemable cumulative preference shares of RM0.10 each and 1,941,444,000 redeemable preference shares Series A of RM0.01 each)
Desiran Realiti Sdn Bhd 22.07.1996 100,000 100 Investment holding Malaysia
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Name Date and place of Issued and paid- Effective Principal activities incorporation up share capital equity (RM) interest (unless otherwise % stated)
Subsidiary of TDPSB
Dijaya Wangsa Sdn Bhd 05.02.1994 5,000,000 60 Dormant Malaysia
Subsidiary of SSSB
Dijaya Tenaga Kimia 18.08.1972 2,000,000 100 Investment holding Sdn Bhd (formerly Malaysia known as Sinbor Corporation Sdn Bhd)
Subsidiaries of TGCRB
Tropicana Management 03.06.1991 10,000 100 Property management Services Sdn Bhd Malaysia and maintenance services
Tropicana Sungai Buloh 13.06.1991 5,000,000 100 Property development Sdn Bhd Malaysia
Tropicana Desa Mentari 19.08.1994 1,000,000 100 Property development Sdn Bhd Malaysia and property investment
Subsidiaries of BRSB
Dicorp Land Sdn Bhd 17.05.1994 2,200,000 100 Property development Malaysia
Tropicana City Sdn Bhd 08.09.1994 13,000,000 100 Property development (“TCSB”) Malaysia and property investment
Dijaya Indah Sdn Bhd 08.04.1991 1,666,000 100 Investment holding (“DISB”) Malaysia
Subsidiary of DML
Dijaya-Malind JV 17.10.2006 USD100 72 Investment holding (Mauritius) Limited Mauritius (“DMJVML”)
Subsidiary of Daya Petaling Sdn Bhd
Reka Bahagia Sdn Bhd 28.10.1988 100,000 100 Dormant Malaysia
Subsidiary of TDBSB
Bintan Holding Pte Ltd 28.10.2011 Singapore dollars 100 Facilitate the setting up Singapore 100,000 of a show gallery in Singapore
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Name Date and place of Issued and paid- Effective Principal activities incorporation up share capital equity (RM) interest (unless otherwise % stated) Subsidiaries of TCSB
Dicasa Management 13.11.2001 2 100 Property management Services Sdn Bhd Malaysia and maintenance services
Tropicana City 23.06.1997 200,000 100 Property management Management Sdn Bhd Malaysia
Tropicana City Parking 07.11.1994 3 100 Management of car Sdn Bhd Malaysia parking facilities
Tropicana Kajang Hill 12.07.1996 1,000,000 100 Property development Sdn Bhd (formerly Malaysia known as Tropicana City Service Suites Sdn Bhd)
Subsidiary of DISB
Tropicana Indah Sdn 06.03.1991 20,000,000 70 Property development Bhd Malaysia
Subsidiary of DMJVML
Dijaya-Malind 27.02.2007 Rupee 9,208,300 74 Property development Properties (India) India (comprising Private Limited 100,000 ordinary shares of Rupee 10.00 each and 820,830 preference shares of Rupee 10.00 each)
Associated company:-
Tenaga Kimia Sdn Bhd 02.01.1976 32,000,000 33 Manufacture and sale Malaysia of explosives, chemicals and blasting accessories
Jointly-controlled entities:-
Tropicana Danga Cove 11.03.2011 2,559,800 50 Property development Sdn Bhd (formerly Malaysia (comprising known as Magical 250,000 ordinary Heights Sdn Bhd) shares of RM1.00 each and 230,980,000 redeemable preference shares Series A of RM0.01 each
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Name Date and place of Issued and paid- Effective Principal activities incorporation up share capital equity (RM) interest (unless otherwise % stated)
Tropicana Ivory Sdn 30.09.2011 770,067 55 Property development Bhd (“TISB”) Malaysia (comprising 250,000 ordinary shares of RM1.00 each and 52,006,700 redeemable non- cumulative preference shares of RM0.01 each
Subsidiary of TISB
Tropicana Ivory Realty 12.07.2012 2 55 Property investment Sdn Bhd Malaysia and the provision of related support services Foundation
Dijaya Tropicana 23.05.2011 - - - Foundation Malaysia
Note:-
* Acquired on 29 August 2012, further details of which have been announced by Dijaya on 30 August 2012. # Acquired on 30 August 2012 pursuant to the Acquisitions.
THE REST OF THIS PAGE HAS BEEN INTENTIONALLY LEFT BLANK
Confidential Page 45 Information Memorandum Dijaya Corporation Berhad
4. CORE BUSINESS AND OVERVIEW OF DIJAYA GROUP
4.1 Principal Activities of Dijaya Group
The principal activities of Dijaya are investment holding and provision of management services. The principal activities of its subsidiaries and associated companies are, amongst others, property investment, property development, property management and maintenance services, credit and leasing, investment holding, real property and resort development, management of car parking facilities, education services and manufacture and sale of explosives, chemicals and blasting accessories. However, property and resort development remains Dijaya Group’s core business and key contributor to profitability.
4.2 Main Businesses
The Dijaya Group’s main businesses are as set out below:
4.2.1 Property Development and Resort Operations
The core business of Dijaya is property development. Over the last 10 years, Dijaya’s assets have increased five-fold from RM500 million to RM2.5 billion, with unbilled sales in excess of RM636 million as at 30 June 2012. Dijaya also enjoys a commanding position in the property market attributable to the 913 acres of quality land bank with an approximate total GDV of over RM38 billion.
With a strong foundation of past and present successes in property and resort development, Dijaya is committed to building fine, resort-theme lifestyle developments and commercial properties for discerning customers.
Dijaya’s signature developments include Tropicana Golf & Country Resort, Tropicana City and Tropicana Indah Resort Homes, all located in Petaling Jaya, Selangor.
4.2.2 Property Investment
The Dijaya Group currently owns Tropicana City Mall & Office Tower that sets the base of recurring income for the Dijaya Group. Following the Amalgamation Exercise (described further in Section 4.8 below), the asset portfolio mix for Dijaya will provide a more stable and recurring income for Dijaya, generated from the longterm lease arrangement attached to the injected investment properties. Dijaya’s investment properties’ lettable areas will increase from approximately 550,000 sq ft to 1.4 million sq ft. As a result of the Amalgamation Exercise, Dijaya would be able to diversify its property and assets portfolio, covering more land areas and key demographic areas, while providing better access to larger scale business opportunities in the Klang Valley, Johor and Sabah.
4.2.3 Investment Holding and Others
Dijaya's varied business activities are streamlined and managed through an investment holding company. By monitoring the market for high-potential business investment opportunities, the investment holding arm is committed to creating value and maximising returns to shareholders.
Confidential Page 46 Page 47 Page From highly tinues to provide tinues to provide 6.5 6.5 5.2 5.2 3.4 3.4 0.8 0.8 Size Size 5.73 5.73 0.89 0.89 Land (Acres) (Acres) f Dijaya Group are as Dijaya Corporation Berhad Dijaya Corporation
ivate pool, detached car car detached ivate pool, apartments or condominiums –apartments or condominiums Dijaya con Built-up 2,283 rangingfrom 5,800 ft to sq sq ft
16 exclusive 3-storey linked villas villas with each units of 3-storey semi-detached 54 lift and pool private individual Totalbungalows 12 with 3 different design Totalunits 296 24 spread over storeys Built-up4,0983,392unit of sq ft to ft per sq Built7,2955,526 up of sq ft to ft sq Built-up 8,172 rangingfrom 8,759 ft to sq sq ft Fourgolf-fronted luxury with condominium towers units 328 only Final block of Casa Tropicana Condominium Development Each bungalowEach has own pr forecourt grand a and porch
• •
• • • • • • • •
Brief Property Description Description Brief Property Comprises: Comprises: 454 units of service apartments suites of office 205 units units of retail 64 • t maintaining the key elements from its architectural heritage. Type of Development and Commercial and Commercial Residential Residential Residential tial, retail and leisure facilities, to urban Project Name Name Project Grande Tropicana Residential Link Villas Casa Tropicana Block E E Block Tropicana Casa Residential Avenue Tropicana Residential Mixed Pool Villas Grand Villas
4.3.1 Current Property Developments nd future property development and resort operations projects o operations projects and resort property development current and future of the notable quality,and sustainability. style Some Many of Dijaya’s developments combineMany leading edge design whils of Dijaya’s Location Tropicana Golf & Country Resort, Selangor Resorts Indah Tropicana SelangorHome, complex developments, that combine residen follows: Information Memorandum 4.3 Property Development and Resort Operations Confidential Page 48 Page 1.3 1.3 227 Size Size 11.1 11.1 1.70 1.70 37.27 66.00 14.84 Land (Acres) (Acres) Dijaya Corporation Berhad Dijaya Corporation houses, terrace houses, terrace houses, 12 units of 3-storey zero-lot bungalows Comprisingof 3-storey terrace houses and 3-storey with clubhouse. houses semi-detached 3-storey bungalows, zero-lot 3-storey of Comprising houses link 3-storey and houses semi-detached Collaboration with Starwood& ResortHotels known hotel room 150- a develop to Inc Worldwide as W Hotel blocks 3 of comprises Residences Tropez 6-acre The ofhigh rise condominium with total of1,149 units built-upwith 1,789 ranging 463 from sq ft to ft sq Cove Danga Oasis @ Tropicana The 38-acre comprises of 350 units of office lots 3- house, semi-detached 3-storey of Comprising offices shop 4-storey and house link storey Built-up 7,079 rangingfrom 9,310 ft to sq sq ft rooms hotel 150 & residences serviced of units 353 of comprises development of the The remaining serviced apartment, officeblocks and shopping mall of comprises development the of remaining The bungalow, semi-detached serviced apartments and shop offices offices and shop apartments serviced
• • • • • • • • • • •
Brief Property Description Description Brief Property
and Commercial and Commercial Type of Development Residential Mixed and Commercial Residential Mixed and Commercial and Commercial and Commercial Residential Mixed Residential Residential Mixed Mixed Residential Residences W Hotel and The and Hotel W Project Name Name Project Tropicana Cheras Residential Bay Danga Tropicana Cove Danga Golf Villas
Location Balakong, Selangor Sungai Long, Cheras, Tropicana Bayou Kuala Lumpur Kuala Ampang, Jalan Residential Lumpur Danga Bay, Johor Bahru Tropez Residences, Danga Johor Cove, Bahru @ Tropicana Oasis Bukit Penang Mertajam, Villa Aston Information Memorandum Confidential Page 49 Page Dijaya Corporation Berhad Dijaya Corporation Size Size 17.6 17.6 4.05 4.05 88.49 Land 198.52 198.52 102.56 102.56 (Acres) (Acres) ), hotel and offices, Comprising of bungalow, semi-detached houses, superlink and condominiums Comprising of service apartments, small office (“SOHO” office/home lifestyle retail space Brief Property Description Description Brief Property Comprising of serviced apartment, office tower tower office apartment, serviced of Comprising and retail spaces retail and apartments serviced of Comprising components Comprising of condominiums, serviced serviced condominiums, of Comprising medical office and retail spaces, apartments, hotel centre and l l and Commercial and Commercial Development Development and Commercial and Commercial and Commercial and Commercial and Commercial Mixed Residential THE REST OF THIS PAGE HAS BEEN INTENTIONALLY LEFT BLANK Project Name Name Project Type of Tropicana Metropark Tropicana Gardens Gardens Tropicana Residential Mixed 4.3.2 4.3.2 Future Property Developments Location Kota Damansara, Selangor Subang, Selangor Kajang, Selangor Senibong, Johor Tropicana Heights Penang Mutiara, Bayan Residential Tropicana Senibong City World Penang Mixed Residential Residentia Mixed Information Memorandum Confidential Information Memorandum Dijaya Corporation Berhad
4.3.3 Resort Operations
Supplementing the core business is the resort operations of Tropicana Golf & Country Resort. Established since 1992, the 380,000 sq ft Tropicana Clubhouse is the heart of such Resort set amidst the rolling greens. Adjacent are the 27 holes of the East and West golf courses to delight avid golfers day and night. This private club is also home to over 5,500 golf and sports club members. The Resort has won numerous awards, making it a household name amongst residents in Petaling Jaya City, Malaysia.
4.3.4 Other Land Bank Set out below are details of Dijaya’s other land bank for future development:
Net Book Value / Land Size Market Land Description (acres) Value (RM million) Trop One, TGCR 1.70 0.64 Tropicana Towers, TGCR 3.20 2.69 Vacant development land 1, 3.20 0.78 TGCR Vacant development land 2, 1.03 0.05 TGCR Casa 3, Selangor 1.10 3.69 Tropicana Desa Mentari 1.76 19.89 Fortune Park 5.90 1.02 Tropicana International School, 6.00 31.71 Petaling Jaya *Sunway Kenari 5.57 75.00 *Desa Aman Puri, Kepong 1.84 11.20 *SS2, PJ 0.87 11.50 *Jalan Harapan, PJ 2.82 22.00 *Lot 184-186, Jalan Selangor, PJ 1.06 9.00 *SS13, Subang Jaya 2.46 23.60 *Lot 2480, Jln Kepong Besar 0.84 10.20 *Lot 1982, Jln. Sungei Besi 3.02 13.00 Jalan Sultan Ismail 1.16 116.70 *Jalan Kia Peng 1.45 88.00 *Jalan Bukit Bintang 3.26 175.00 *Jalan Ampang 0.90 20.00 Kg. Sungai Danga 59.48 122.74 *Lot 4271, Jln Tun Razak, Johor 21.93 146.00 Bahru *Mt Austin 1.50 8.50
Confidential Page 50 Information Memorandum Dijaya Corporation Berhad
Net Book Value / Land Size Market Land Description (acres) Value (RM million) *Rahang land 2.42 4.80 *Pekan Bukit Kepayang, Negeri 2.00 9.00 Sembilan *Lot 914-916, Jalan Macalister, 2.09 41.50 Penang *The Landmark, Jalan Bundusan, 1.31 3.49 KK *Double Up, Off Jalan Lintas, 1.15 5.00 Kota Kinabalu *Sadong Jaya, Kota Kinabalu 1.00 8.40 *Jalan Albert Kwok, Kota 0.91 16.90 Kinabalu *Lido Junction, Penampang 1.67 6.60 *Jalan Segama, Lahad Datu 1.25 3.04 *Tawau City land 0.80 5.66 *Taman Tshun Ngen, Sandakan 1.52 3.50 Total 148.19 1,020.84
* The stated value reflects market value of these land banks as at 1Q2012
TGCR: Tropicana Golf & Country Resort TIRH: Tropicana Indah Resort
The total GDV for the land bank above is approximately RM8.86 billion.
4.4 Property Investment
With the introduction of additional long-term real estate investments through the Amalgamation Exercise (described further in Section 4.8 below) Dijaya Group will have a more stable and sustainable income stream arising from rental income. The buildings to be acquired pursuant to the Amalgamation Exercise will also provide Dijaya with stable income and cashflows of approximately RM42.7 million per annum arising from the Property Lease Agreements as well as from existing third party tenants, resulting in annual lease rental investment yield of not less than 8% per annum from the buildings. Such stable recurring income will provide a solid base to the future earnings of the Dijaya Group on a yearly basis.
4.5 Investment Holding and Others
In addition to having a diversified investment portfolio, Dijaya’s management services provide expertise in property management as well as maintenance services for both residential and commercial developments. Dijaya’s property management portfolio includes Damansara Intan e-Business Park, Casa Damansara 1 & 2 condominiums and Casa Kiara 1 and II luxury condominiums in Mont’ Kiara and the five-storey Arena Mentari shop office development in Dataran Mentari, Bandar Sunway.
Confidential Page 51 Information Memorandum Dijaya Corporation Berhad
Dijaya also has a manufacturing interest in Tenaga Kimia Sendirian Berhad (“TKSB”) a 33% owned associate company that is a leading producer of emulsion explosives. TKSB supplies a complete range of up-to-date blasting products and accessories, bulk emulsion and technical services in Malaysia and throughout South East Asia. TKSB also provides total explosives and blasting solutions to the mining and construction industries by engaging customers and suppliers through strategic partnerships.
4.6 Future Plans and Prospects of Dijaya Group
In 2011, Dijaya re-engineered its business model to include new potential areas of growth. Some of the landmark decisions that continue to contribute to the big picture were:
• Acquisition of land banks across Peninsular Malaysia • Venture into investment properties for recurring income • Develop projects with potential growth for sustainable development
Dijaya also diversified its line of business to include hospitality, education and mixed commercial components.
The Dijaya Group now has its footprint in Central, Southern and Northern regions of Peninsular Malaysia as well as East Malaysia which are also amongst the major property development areas. With all these projects in the pipeline, Dijaya believes its Group is poised for new growth. The Real Properties are mainly situated in strategic locations in the Klang Valley, Penang, Perak, Negeri Sembilan, Johor and Sabah. Due to the scarcity of development land in prime areas, demand for properties is expected to remain positive. In general, the property market in Klang Valley has good medium to long-term prospects, benefiting from the existing and planned transportation infrastructure such as airports, light rail transit, mass rapid transit and highways.
Property demand in Penang is expected to continue on an uptrend due to state government initiatives to improve the infrastructure and attract investments into Penang, and acquisitions of development lands in Penang Island by developers have been active in 2011.
In Johor, the economic zone of Iskandar Malaysia will continue to be the driving factor in boosting demand for properties in Johor Bahru. The completion of several major ongoing road and highway projects in Iskandar Malaysia such as the New Coastal Highway, Eastern Dispersal Link Expressway (EDL) and Senai-Pasir Gudang-Desaru Expressway and the widening of Permas Jaya bridge would improve connectivity within Johor Bahru. Upon completion and commencement of operations, such infrastructure developments will provide a boost to demand of properties in Johor Bahru due to better connectivity.
With the improved accessibility to Seremban, demand for properties has been at an increasing trend over the past years. “The Affordable Homes” campaign which was implemented by the Malaysian Government, has made Seremban a better living town. As for Ipoh, the property market is generally expected to remain stable.
Based on the information extracted from the Commercial Property Stock Table Q4 2011 produced by the Valuation and Property Services Department (JPPH), Malaysia, the current supply of existing stock of purpose-built office building in Perak stood at 210 buildings with total a total space of approximately 6.675 million square feet in fourth quarter of 2011. It is noted that approximately 6.262 million square feet or 93.9% of the total space are occupied. The occupancy rate was due to the new completions enjoying full occupancy.
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Among the 210 purpose-built office buildings in Perak, 62 buildings are located within Ipoh. The current supply of existing stock of purpose-built office building in Ipoh recorded a total space of approximately 4.070 million square feet and with an occupancy rate of 91.1% (approximately 3.707 million square feet) in fourth quarter of 2011.
Sabah’s economy is generally based on agriculture, mining and quarrying, forestry and fisheries, and in recent years, tourism. Property markets in major towns of Sabah have enjoyed growth due mainly to favourable economic conditions especially in the palm oil, tourism and oil and gas sectors, coupled with competitive financing and attractive bank lending rates. Sabah’s strong economic fundamentals and wealth of natural resources are expected to sustain its economy, and hence the property sector in Sabah.
Dijaya launched RM700 million worth of new projects during the FYE 31 December 2011, and is geared for more projects in 2012 estimated at RM1.6 billion in value. Dijaya’s new growth pillars are being built on the strong and credible ‘Tropicana’ brand, backed by its two anchor projects – the 625-acre Tropicana Golf & Country Resort and 409-acre Tropicana Indah Resort Homes.
Dijaya’s aspiration is to achieve further growth and raise its market capitalisation from RM2 billion to RM3 billion in the next five (5) to six (6) years. While Dijaya pursues this mission, it also endeavours to enhance quality of life through improved lifestyle concepts. All Dijaya’s residential and commercial developments are unique in terms of the lifestyle experience that they create for Malaysians, while instilling a sense of pride from association with its flagship brand Tropicana.
Upon completion of the Acquisitions, Rights Issue and the CP/MTN Programme, Dijaya may be able to achieve PAT in excess of RM100 million per annum after taking into consideration its own projects in hand, the lease rental of approximately RM42.7 million per annum pursuant to the Property Lease Agreements as well as the future development profits arising from the total GDV of projects of approximately RM6.1 billion. For information purposes, Dijaya had recorded profit margins ranging from 20% to 25% from its previously completed property development projects. Moving forward, the stable recurring income from the lease rentals pursuant to the Property Lease Agreements will provide a solid base to the future earnings of the Group on a yearly basis.
(Source: Group CEO’s Message, Dijaya’s Annual Report 2011 and Management of Dijaya)
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4.7 Financial Highlights of Dijaya Group
The following is an extract of the key financial highlights of the Dijaya Group based on the audited financial year ended 31 December 2011, 31 December 2010 and 31 December 2009:
Consolidated Statement of Financial Position Audited Audited Audited FYE 2011 FYE 2010 FYE 2009 RM’000 RM’000 RM’000 Assets Total non-current assets 1,728,170 930,278 782,983 Total current asset 742,925 589,454 644,442 Total Assets 2,471,095 1,519,732 1,427,425
Equity and liabilities Equity attributable to equity holders of Dijaya Share capital 458,119 455,000 454,345 Reserves 492,510 443,836 385,498 898,836 839,843 Minority Interests 117,970 60,785 69,311 Total equity 1,068,599 959,621 909,154
Total non-current liabilities 1,011,656 348,212 257,644 Total current liabilities 390,840 211,899 260,627 Total liabilities 1,402,496 560,111 518,271 Total equity and liabilities 2,471,095 1,519,732 1,427,425
Consolidated Statement of Comprehensive Audited Audited Audited Income FYE 2011 FYE 2010 FYE 2009 RM’000 RM’000 RM’000 Revenue 375,218 292,258 311,777 Gross Profit 158,021 99,165 117,609 Profit/(loss) before tax 86,647 53,394 72,115 Profit/(loss) net of tax 72,688 47,669 59,463 Other comprehensive income (1,298) 1,231 Total comprehensive income/(expense) 71,151 48,900 59,463
Total comprehensive income attributable to: Equity holders of Dijaya 63,530 44,483 50,512 Minority interests 7,621 4,417 8,951 71,151 48,900 59,463
4.8 Amalgamation Exercise
On 6 March 2012, Dijaya announced the Amalgamation Exercise to streamline and rationalise the majority of lands and properties held privately by Dijaya’s Chief Executive Officer, TSDTCS, into Dijaya. On 9 April 2012, Dijaya acquired 73 properties, comprising 49 parcels of lands and 16 buildings. The injected land banks are located strategically within the prime location of city centres, namely Kuala Lumpur, Johor Bahru, Penang, as well as in Kota Kinabalu and Sandakan.
The Amalgamation Exercise entails the Acquisitions, Rights Issue and the establishment of the CP/MTN Programme. After taking into consideration the required adjustments, the final purchase consideration for the Acquisitions as at 30 August 2012 was RM934,681,436, which was satisfied in the following manner:
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(i) RM250,000,000 in cash, of which RM2,500,000,000 was paid as deposit upon the execution of the SSAs whilst the balance of RM247,500,000 constitutes a debt due and owing by Dijaya to the relevant Vendors which will be payable within 3 business days following the completion of the Rights Issue; and
(ii) the issuance of RM684,681,436 nominal value of RCULS on 30 August 2012 to Aliran Firasat Sdn Bhd, a party nominated by the Vendors to receive and hold the RCULS.
Accordingly, the Acquisitions were completed on 30 August 2012 in accordance with the terms of the Definitive Agreements.
In accordance with the terms of the Rights Issue as approved by Dijaya’s shareholders at the extraordinary general meeting held on 10 August 2012, and subject to the terms of the abridged prospectus and its accompanying documents, Dijaya shall provisionally allot up to 491,302,655 Rights Shares to the Entitled Shareholders at an issue price of RM1.20 per Rights Share, on the basis of 4 Rights Shares for every 5 existing Dijaya Shares held as at the Entitlement Date and 1 Bonus Share for every 4 Rights Shares subscribed for. The Entitlement Date was fixed on 24 September 2012.
The listing of and quotation for the Rights Shares and Bonus Shares to be issued will commence after, amongst others, the receipt of confirmation from Bursa Depository that all CDS Accounts of the successful applicants have been duly credited and notices of allotment have been despatched to them.
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5. INVESTMENT CONSIDERATIONS
Prospective investors should carefully read this Information Memorandum in its entirety. In evaluating an investment in the Notes, investors should consider, amongst others, all information contained in this Information Memorandum, including the particular risks and considerations referred to below. Before investing in the Notes, prospective investors should pay particular attention to the fact that the Dijaya Group and its activities are governed by the legal, regulatory and business environment in Malaysia. The business of the Dijaya Group is subject to a number of factors, many of which are outside the control of the Dijaya Group. Prior to making an investment decision, prospective investors should carefully consider, along with the other information in this Information Memorandum, the following risks and investment considerations. Investors should also note that certain statements set out below constitute “forward-looking statements” as discussed above.
5.1 Risks Relating to the CP/ MTN Programme
5.1.1 The Issuer’s Ability to Meet Payment Obligations under the Notes
The ability of Dijaya to meet its payment obligations under the Notes will depend on the cash flow availability at Dijaya’s level. The Notes will not be the obligations or responsibilities of any other person other than Dijaya. In particular, the Notes will not be the obligations or responsibilities of, or guaranteed by any of the Joint Lead Arrangers, the Facility Agent, the Trustee or any subsidiary or affiliate thereof, and any other person involved or interested in the transactions envisaged under the CP/MTN Programme. None of such persons will accept any liability whatsoever to the holders of the Notes in respect of any failure by Dijaya to pay any amount due under the CP/MTN Programme.
The Notes are, however, guaranteed by an irrevocable and unconditional guarantee by the Guarantor Banks to guarantee the redemption of the nominal value of the Notes, including 1 coupon payment of the MTNs of up to RM500.0 million under the CP/ MTN Programme (other than interest on late payment and other charges in respect of the Notes).
5.1.2 The Ratings on the CPs and/or MTNs May Change At Any Time and This May Adversely Affect the Market Value of the CPs and/or MTNs
RAM Ratings has accorded a short-term rating of P1(bg) and long term rating of AA2(bg) in respect of the Notes to be issued under the CP/MTN Programme and guaranteed by the BG Facility Tranche 1 whilst a short-term rating of P1(bg) and long term rating of AA3(bg) in respect of the Notes to be issued under the CP/MTN Programme and guaranteed by the BG Facility Tranche 2.
The ratings are not a recommendation to buy, hold or sell the Notes and there can be no assurance that the ratings will not be revised on a periodic review basis by the rating agency during the tenure of the Notes or that the ratings will not be withdrawn entirely if circumstances in the future so warrant.
Further, such a rating is not a guarantee of repayment or that there will be no default by Dijaya under the CP/MTN Programme. If the ratings initially assigned to the Notes are subsequently lowered or withdrawn for any reason, no person or entity will be obligated to provide any additional credit enhancement with respect to the Notes. Any downgrade or withdrawal of a rating may have an adverse effect on the liquidity and the market price of the Notes. Any downgrade or withdrawal of a rating will not constitute an event of default or an event obliging the Issuer to prepay the Notes.
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5.1.3 Liquidity of the Notes
The Notes comprise a new issue of securities for which no secondary trading market for the Notes currently exists. The Notes will not be listed on Bursa Securities or any other exchange. As such, there can be no assurance regarding the development of a secondary trading market for the Notes. In the event that a secondary trading market for the Notes does develop, there can be no assurance that it will continue for the tenor of the CP/MTN Programme. Furthermore, there can be no assurance as to the liquidity of any secondary trading market that may develop for the Notes, the ability of holders to sell their Notes, or the prices at which holders would be able to sell their Notes.
Accordingly, the purchase or subscription of the Notes is suitable only for investors who can bear the risk associated with a lack of liquidity in the Notes and the financial and other risks associated with an investment in the Notes.
5.1.4 Fluctuation of Market Value of the Notes
Trading prices of the Notes may be influenced by numerous factors, including the operating results and/or financial condition of Dijaya or the Guarantor Banks, political, economic, financial and any other factors that can affect the capital markets, the industry Dijaya operates in and/or Dijaya and/or the Guarantor Banks. Adverse economic development could have a material adverse effect on the market value of the Notes issued or to be issued under the CP/MTN Programme.
The Notes are fixed income securities and may therefore see their prices fluctuate due to movements in interest rates. Generally, a rise in interest rates may cause a fall in the price of the Notes. The Notes may be similarly affected resulting in a capital loss for the Noteholders. Conversely, when interest rates fall, the prices of the Notes and the price at which the Notes trade may rise. Noteholders may enjoy a capital gain but profit received may be reinvested for lower returns.
5.1.5 Fluctuation in Inflation Rates
Noteholders may suffer erosion on the redemption of their investments due to inflation. Noteholders would have an anticipated rate of return based on expected inflation rates on the purchase of the Notes. An unexpected increase in inflation could reduce the actual return.
5.1.6 The Issuer May in Certain Circumstances Repurchase the Notes in the Open Market
The Issuer may at any time purchase the Notes in the open market or by private treaty at any price. All Notes purchased by the Issuer shall be cancelled and the global certificates shall be endorsed by BNM with a note of all such cancellations. Notes that have been cancelled may not be reissued or resold.
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5.1.7 Risks Inherent to the Guarantor Banks
The Notes are guaranteed by RHB Bank and AmBank, in respect of the payment obligations of Dijaya of the nominal value and one (1) coupon payment of the MTNs (where applicable). The payment under the BG Facility will be dependent upon the financial strength and the ability to pay of the respective Guarantor Banks and subject to the risks inherent to the business and operations of the respective Guarantor Banks.
Prospective investors are requested to conduct their own independent assessment and evaluation of the Guarantor Banks.
5.1.8 Change of Law
The issue of the Notes is based on Malaysian law, tax rulings and regulations, and administrative practices in effect at the date hereof and having due regard to the expected tax treatment of all relevant statutes under such law and practice. No assurance can be given that Malaysian law, tax rulings and regulations or administrative practice will not change after the issuance of the Notes or that such changes will not impact the structure of the transaction and the treatment of the Notes.
5.2 Risks Relating to the Issuer
5.2.1 Political, Economic and Regulatory Risks
Political and economic conditions as well as regulatory developments in Malaysia or foreign country(ies) (if applicable) could have a material effect on the financial performance of the Dijaya Group. Adverse political, economic and/or regulatory conditions or developments including (but not limited to) risk of war, change in political leadership and environment, unfavourable changes in government policies, nationalisation and changes in interest rate or legislation.
While Dijaya Group continues to take measures to mitigate these risks including close monitoring of the Government’s masterplan in respect of long-term economic and development policies so that it can stay ahead as well as capitalise on any regulatory changes in the industry in which Dijaya Group operates, there can be no assurance that any changes to political, economic and regulatory factors will not have a material and adverse effect on the business and prospects of the Dijaya Group.
5.2.2 Dependence on Key Personnel
The continued success of the Dijaya Group depends largely on the abilities, skill, experience, competency and continued efforts on the existing Board and senior management. The loss of any of Dijaya’s directors and/or key management personnel without suitable and timely replacement, or the inability of Dijaya Group to attract and retain other qualified personnel, could adversely affect Dijaya’s operations and hence, its revenue and profitability. To this end, Dijaya has implemented strategies such as offering competitive compensation package, establishing an employee share option scheme and providing relevant training to retain its key personnel as well as attract and retain qualified experienced personnel who are essential towards addressing its succession plan. Notwithstanding this, there can be no assurance that these measures will always prove to be successful in retaining key management and personnel or ensuring a smooth transition should changes occur.
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5.2.3 Supply of Land Bank and Dependence on a Particular Geographical Location
The success of Dijaya Group in the property development industry relies heavily on the location of its land bank to deliver sustainable growth. A sizeable land bank at desirable locations is important in ensuring the future growth and profitability of Dijaya Group. Dijaya Group currently has a land bank of approximately 913 acres with an estimated GDV of RM38 billion for its on-going and future development. Its land banks mainly comprise parcels of land at locations with development potential in various identified areas located within Malaysia such as the Klang Valley, Johor, Penang and Sabah.
Dijaya Group will continue to actively search for quality land banks and to participate in development projects with strong growth and potential.
However, there can be no assurance that Dijaya Group will be able to secure more strategic land bank for future growth.
5.2.4 Branding of Dijaya Group
Dijaya Group has established the “Tropicana” brand over the past 18 years with 2 signature projects, namely the Tropicana Golf & Country Resort and Tropicana Indah Resort. Dijaya Group’s continuous success depends to a large extent on its ability to maintain and enhance the value of its brand.
Dijaya’s brand value may be affected by events which are beyond its control, such as negative publicity arising from litigation and/or falsified claims. Consumer demand for Dijaya’s property and its brand value may be adversely affected if such incidents erode consumer confidence in Dijaya Group. Such occurrences may have an adverse impact on Dijaya’s operations and financial performance. Nevertheless, Dijaya will continue to maintain and build its brand reputation by continuously delivering quality property development projects which meet the market’s demand and expectations.
5.2.5 Competition
The Dijaya Group’s business may be exposed to competition by other property developers and threats of new players entering the property development industry. The Board believes that it is possible to mitigate the effects of adverse pricing pressure arising from competition through proper planning in terms of innovative design and development content, timing of launch, relative pricing analysis and innovative marketing strategies to stimulate market demand.
Notwithstanding this, there can be no assurance that Dijaya will be able to compete successfully against its competitors and this may materially and adversely affect the profitability of Dijaya Group.
5.2.6 Financing Risks
Fluctuation in interest rates could materially affect the interest costs of Dijaya’s borrowings and hence affect profitability.
In mitigating these risks, Dijaya actively reviews its debt portfolio taking into account the level and nature of borrowings and adopt appropriate cost effective financing options. Dijaya is able to meet its financial obligations through a combination of internally generated funds and external financing. Dijaya also enjoys a good credit standing with its bankers and has adequate credit facilities.
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5.3 Risks Inherent in Property Investment and Property Development
5.3.1 Ownership and Management Risks in Property Investment
Certain risks will arise from the ownership and management of investment properties, including but not limited to increasing competition from newly developed or upgraded properties, loss of attractiveness of the properties, increasing maintenance costs including renovations which requires capital outlay as the properties age, decline in rental rates or occupancy levels and failure to secure new tenants.
In order to mitigate the abovementioned risks, there will be regular repairs and maintenance to the properties to ensure that they will be in good condition to remain competitive. In addition, long-term lease arrangements with the tenants of the investment properties to be acquired pursuant to the Acquisitions have been secured via the Property Lease Agreements.
5.3.2 Risk of Fluctuations in the Fair Value of the Investment Properties
Adverse fluctuations in the fair value of the investment properties acquired pursuant to the Acquisitions may adversely affect the net asset value and profitability of Dijaya as investment properties are carried at fair value and are revalued on a yearly basis based on the market values of the investment properties as assessed by independent valuers. Unrealised gains or losses due to the rise or fall in the market value of the investment properties will be recognised in the income statement immediately and hence, any decline in the market value of the properties may adversely affect the financial results and profitability of Dijaya Group.
5.3.3 Risk of Failure in or Delays in Obtaining Requisite Governmental Approvals for Future Property Development Projects
In respect of Dijaya’s property development business, all its development projects require various permits, licences, certificates and approvals from various governmental authorities at various stages of development. There can be no assurance that all permits, licences, certificates and approvals will be successfully obtained within the scheduled timeframe for each development project. Failure or delays in obtaining such approvals or their revocation may result in significant delays in the development schedules and/or cost overruns for the affected projects which may in turn affect the profitability of Dijaya Group.
Nevertheless, Dijaya shall endeavour, to the best of its ability, to obtain all the necessary permits, licences, certificates and approvals required for the development projects.
5.3.4 Other Inherent Risks of the Property Development and Property Investment Industry
Other inherent risks of the property development and property investment industry may include, inter-alia, changes in general economic conditions, inflation and changes in operating or business conditions such as changes in laws and regulations, property oversupply affecting property prices and take-up rates of property launches, shortages of labour supply and raw materials and increases in labour, raw material and financing costs. There can be no assurance that such risks will not adversely affect Dijaya Group’s business and financial performance.
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Nevertheless, Dijaya endeavours to minimise these risks by adopting sound business practices, appropriate risk management measures and efficient project management, maintaining quality standards in products and services offered and providing value to existing and potential customers.
5.4 Forward-Looking Statements
Certain statements in this Information Memorandum are based on historical facts, including without limitation, those regarding the financial position and business strategy of the Dijaya Group and plans and objectives of the management for future operation, which may not be reflective of future results, and others are forward-looking in nature, which are subject to uncertainties and contingencies. All forward-looking statements are based on estimates and numerous assumptions made by Dijaya regarding the present and future business strategies, the environment in which the present and future business strategies have developed, and the environment in which the Dijaya Group will operate in future. Although Dijaya believes that these forward-looking statements are reasonable, such forward-looking statements are subject to known and unknown risks, uncertainties and other factors which may cause the actual results, performance or achievements or industry results, to be materially different from any future results, performance or achievements expressed or implied by such forward-looking statements.
In light of the above factors and other uncertainties, there is no assurance that forward-looking statements in this Information Memorandum will eventually materialise in the manner which such statements may have been expressed or implied.
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6. INDUSTRY REVIEW
The section below includes statistical data and economic information regarding the general economic and business conditions of Malaysia, which were obtained from industry publications as quoted herein. The cross- references for the sources generally indicate that Dijaya has obtained those information from sources believed to be reliable. While Dijaya believes the information to be reliable, Dijaya has not independently verified such data. As such, Dijaya does not guarantee the accuracy and completeness of such information.
6.1 Overview of the Malaysian Economy
The global economic environment remained challenging in the second quarter of 2012, amidst heightened vulnerabilities in several key economies. Growth in the major advanced economies was weighed down by policy and domestic structural concerns. In Asia, economic activity was affected by weaker external demand. In spite of this challenging environment, the Malaysian economy recorded a higher growth of 5.4% (First quarter of 2012 (“1Q 12”): 4.9%), driven by stronger domestic demand, which rose by 13.8% (1Q 12: 9.7%). This was supported by robust growth in the expenditure of both the private and public sectors, while net exports moderated further due to weaker exports and higher imports. On the supply side, most major economic sectors continued to expand, led by the services, manufacturing and construction sectors.
Gross fixed capital formation recorded a stronger growth of 26.1% (1Q 12: 16.1%), amidst increased capital spending by both the private and public sectors. Private investment strengthened further, supported by investment in the domestic-oriented services sub-sectors, oil and gas and manufacturing industries. Expansion in public investment was driven by non- financial public enterprises’ capital spending in the transportation, oil and gas and utilities sectors, as well as the Federal Government’s development spending on transportation, trade and industry, public utilities and education.
Private consumption registered a strong growth of 8.8% (1Q 12: 7.4%), supported by firm labour market conditions, robust income growth and improved consumer sentiment. In addition, Government initiatives such as financial assistance to the lower income households and FELDA settlers, as well as increases in the salaries and pensions of civil servants also supported the increase in spending. Public consumption increased by 9.4% (1Q 12: 7.3%), led by higher spending on emoluments and supplies and services.
On the supply side, most economic sectors expanded further. This was supported by domestic-driven activity in the services sector, namely communication, real estate and business services, and the finance and insurance subsectors. The manufacturing sector was driven by higher growth in the export-oriented industries and a continued expansion of the domestic-oriented industries. The construction sector recorded a strong double-digit growth for the second consecutive quarter amidst increased activities in the civil engineering sub- sector. The mining sector expansion reflected the higher output of crude oil, while the agriculture sector recorded a contraction due to lower crude palm oil production.
The headline inflation rate, as measured by the annual change in the Consumer Price Index, moderated to 1.7% in the second quarter (1Q 12: 2.3%). Inflation in the food and non- alcoholic beverages category moderated amid a decline in the prices of meat and vegetables.
Financial stability remained intact throughout the second quarter of 2012, underpinned by strong capitalisation of financial institutions and orderly financial market conditions. Financial markets continued to demonstrate strong capacity to withstand external shocks and volatility arising from the escalation of sovereign risk in the Euro area.
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The global economic recovery continued in the second quarter, albeit at a more modest pace. Going forward, the global economy faces increasing downside risks emanating from the developments in several major economies. Policy uncertainty surrounding the European sovereign debt crisis and fiscal issues in the United States is expected to weigh on market sentiments and growth prospects.
For the Malaysian economy, the strong support provided by domestic demand, underpinned by activities in both the private and public sectors, has ensured higher growth amidst the challenging global environment. This trend is expected to be sustained going forward, although downside risks emanating from external developments remain.
Source: Economic and Financial Developments in Malaysia in the Second Quarter of 2012, Bank Negara Malaysia
6.2 Overview and Outlook of the Malaysian Property Market
In 2011, the Malaysian property market had maintained double digit growth of 14.3% in volume and 28.3% in value. The year registered 430,403 transactions worth RM137.83 billion (2010: 376,583 transactions worth RM107.44 billion). All property sub-sectors recorded positive growths. Residential and development land sub-sectors recorded double-digit growths of 18.9% and 14.7% respectively, followed by the commercial (9.7%), industrial (6.5%) and agricultural (4.6%) sub-sectors. The residential sub-sector took up 62.7% share of the activity, with residential transactions of below RM250,000 forming 75.5% of residential transactions. By value, all sub-sectors continued to register double-digit growths against 2010. Two sub-sectors surpassed 50% growth, namely agriculture (65.4%) and development land (54.8%), followed by residential (22.1%), industrial (17.4%) and commercial (15.9%).
The performance of residential primary market improved in 2011 despite more units launched. The year witnessed 49,290 units of new launches and achieved a slightly better sales performance of 46.3% (2010: 47,698 units; 45.7%). The five major states namely Kuala Lumpur, Selangor, Johor, Pulau Pinang and Perak secured 52.8%, 46.0%, 42.3%, 25.1% and 44.1% sales performance respectively. Selangor had the highest number of new launches, accounting for 20.2% (9,946 units) of the national total, followed by Johor (19.6%; 9,652 units) and Perak (11.4%; 5,618 units). In tandem with the better performance of new launches, the volume of residential overhang declined. As at year end, there were 19,607 units of residential overhang, indicating a decline of 15.2% in volume (2010: 23,133 units). On the other hand, the overhang value took an upturn of 16.8% (2011: RM4.92 billion; 2010: RM4.21 billion). The year saw 269,789 residential property transactions worth RM61.83 billion, the highest recorded in the last five years. Residential property continued to dominate the overall property market. Government initiatives to promote home ownership through My First Home Scheme as well as accommodative interest rates were supportive of the housing activity.
The national performance of purpose-built offices managed to obtain an overall occupancy rate of 82.9% (2010: 84.3%) despite more new spaces that entered the market. Completions increased by 29.5% from the entry of 40 new office buildings (600,975 sq m) recorded nationwide. The take-up space remained positive though lower at 256,792 sq m (2010: 925,064 sq m). Consequently, total vacant space in the country increased to 2.98 million sq m (2010: 2.63 million sq m).
The retail sub-sector saw a slight moderation as the average occupancy rate of shopping complexes declined marginally to 79.5% (2010: 80.6%). The disequilibrium between the increase in completions and the take-up of new spaces probably contributed to the pull-down in occupancy. The year saw the entry of 35 new shopping complexes, offering a total of
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600,400 sq m of space (2010: 532,628 sq m). Nevertheless, the take-up of retail space (2011: 356,921 sq m; 2010: 358,843 sq m) was still favourable.
The better property market was supported by various implementations of Economic Transformation Program (“ETP”) projects. Completed projects such as the Johor Premium Outlets and the RM50 million shaded walkway in the KLCC-Bukit Bintang area served as a tourism product-cum-initiative to attract more foreign tourists to the country whilst the newly launched infrastructure projects, such as the Klang Valley Mass Rapid Transit project starting with Sungai Buloh – Kajang Line, Senai-Pasir Gudang-Desaru Expressway and coastal road connecting Johor Bahru and Nusajaya stimulated market activities in Klang Valley and Johor Bahru respectively.
The liberalisation of the property industry will mark a new chapter in the local property market following the amendments to the Valuers, Appraisers and Estate Agents (Amendment) Act, 1981. The amendments took effect from 19 August 2011. Liberalisation would allow foreign companies to invest in Malaysia’s real estate agencies, which in turn would enable local agencies to gain access to the global market. It would benefit the real estate investors as liberalisation would enable them to invest in local and international markets.
In 2012, the global economic prospect is expected to be more challenging. Nevertheless, the Malaysian economy is expected to grow, backed by strong economic fundamentals. A strong construction sector is expected as a spill-over effect from public and private investments. The ongoing implementation of ETP through various National Key Economic Areas will likely push private investment up amid shaky global economic prospects. In the 2012 Budget, a total of RM232.8 billion is allocated to implement all Government development plans.
On the overall property market performance for 2012, it is expected that the residential sub- sector will be sustained. Higher housing starts and building plan approvals in 2011 signify confidence of developers and investors in the development activity. The vacant space in the office and retail sub-sectors is foreseen to be absorbed as more space is taken up when ETP takes place. Development in various regional economic corridors and Greater Kuala Lumpur/Klang Valley would continue to give positive impacts on property development and the market in the coming years.
Source: Property Market Report 2011, Valuation and Property Services Department (JPPH), Ministry of Finance
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7. OTHER MATERIAL INFORMATION
7.1 Contingent Liabilities
As at 7 September 2012, the Board is not aware of any contingent liability incurred or known to be incurred by the Dijaya Group, which in the opinion of the Board, upon becoming enforceable will or may have a material impact on the profits or the net assets of the Dijaya Group.
7.2 Material Litigation
Save as disclosed below, as at 7 September 2012, Dijaya and its subsidiaries are not engaged in any material litigation, claims or arbitration either as plaintiff or defendant, which has or would have a material and adverse effect on the financial position of the Dijaya Group, and to the best of the Board’s knowledge and belief, the Board is not aware of any proceedings, pending or threatened, or of any fact likely to give rise to any proceedings which might materially and adversely affect the financial position of the Dijaya Group:
(a) On 9 April 2007, Dijaya-Malind JV (Mauritius) Limited (“DMJML”) and Dijaya- Malind Properties (India) Private Limited (“DMPI”), both subsidiaries of Dijaya, and Starlite Global Enterprises (India) Limited (formerly known as Telangana Spinning & Weaving Mills Limited (“SGEIL”) had entered into a deed of novation cum joint development agreement (“Joint Development Agreement”) to facilitate DMPI to undertake the development of SGEIL’s land measuring approximately 25.4 acres in Hyderabad, India.
Due to the breach of terms in the Joint Development Agreement by SGEIL, a notice of termination was issued to SGEIL on 3 August 2010 (“Notice of Termination”) to claim for the refundable deposit as well as damages suffered by DMJML and DMPI. As SGEIL did not refund the refundable deposit of rupees127,080,000 (approximately RM9,338,000) and failed to pay the damages within the stipulated 30 days period from the date of Notice of Termination, a notice of arbitration was issued pursuant to the terms of the Joint Development Agreement to SGEIL on 11 February 2011.
The first hearing was on 21 July 2012. The next hearing is tentatively fixed on 6 October 2012.
In addition, an application for interim relief was filed on 17 February 2011 against SGEIL before the Civil City Court of Hyderabad to restrain SGEIL from alienating the property under its control, and to seek interim order or injunction in favour of DMJML and DMPI, pending arbitration proceedings. This application is fixed for hearing on 27 September 2012.
On 22 July 2011, SGEIL sought an order for a security of Rs. 300 crores by way of an application filed under section 9 of the Arbitration and Conciliation Act 1996. The hearing for this application has been fixed on 27 September 2012. The Board is of the opinion that the application is baseless and frivolous.
Material subsequent event:
Dijaya has subsequently on 18 October 2012 disposed of its entire equity interest comprising 2 ordinary shares of par value of USD1.00 each in Dijaya (Mauritius) Limited, the holding company of DMJML and DMPI, to Marian Investments Limited. As a result of the disposal, DMJML and DMPI have ceased to be indirect subsidiaries of Dijaya.
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7.3 Material Contracts
Save as disclosed below, Dijaya Group has not entered into any material contracts, not being contracts entered into in the ordinary course of business, within the past 2 years immediately preceding the date of this Information Memorandum:
(a) Supplemental letter dated 30 August 2012 between Dijaya and the respective Vendors of Coastal Recreation Centre Sdn Bhd and IRSB in relation to the share sale agreements in respect of Coastal Recreation Centre Sdn Bhd (“CRCSB SSA”) and IRSB (“IRSB SSA”) pursuant to which the parties agree to vary and amend the manner of payment of the purchase considerations contained in the CRCSB SSA and IRSB SSA;
(b) Subscription agreement dated 27 August 2012 between Dijaya and Aliran Firasat Sdn Bhd relating to and constituting the issuance of the RCULS to Aliran Firasat Sdn Bhd towards account of the purchase consideration for the Acquisitions (“Subscription Agreement”);
(c) Supplemental letter dated 27 August 2012 from Profile Wide Sdn Bhd (“PWSB”) to Dijaya (“Supplemental Letter”) in respect of the sale and purchase agreement dated 9 April 2012 between Dijaya and PWSB (“PWSB SPA”) pursuant to which PWSB agrees and undertakes to procure state authority consent as a condition subsequent to the completion of the PWSB SPA within not more than 6 months from the date of the Supplemental Letter or such extended date as Dijaya may agree;
(d) Letter of undertaking dated 27 August 2012 from Aliran Firasat Sdn Bhd to Dijaya in relation to covenants and undertakings of PWSB under the Supplemental Letter where Aliran Firasat Sdn Bhd agrees and covenants with Dijaya to, within 14 days following the issuance by Dijaya of a notice of termination in respect of the PWSB SPA and/or the Supplemental Letter to PWSB, surrender to Dijaya for cancellation RM16,900,000 nominal value of RCULS allotted and issued by Dijaya to Aliran Firasat Sdn Bhd towards account of the purchase consideration under the PWSB SPA (“Consideration RCULS”) and to refund the interest accrued and paid in respect of the Consideration RCULS pursuant to the terms of the Subscription Agreement;
(e) Deed of rescission dated 6 July 2012 between Dijaya and IRSB to rescind the IRSB SPA for the acquisition of certain properties held by IRSB. Simultaneously, Dijaya has entered into a share sale agreement dated 6 July 2012 with TSDTCS and PSDCST for the acquisition by Dijaya of the entire issued and paid-up share capital of IRSB for a purchase consideration of RM168,068,456 to be satisfied via the issuance of RCULS at 100% of their nominal value.
(f) 26 conditional property lease agreements all dated 6 July 2012 entered by Dijaya and/or its nominee(s) with Desa Setia Sdn Bhd, D&I Enterprise Sdn Bhd, D&I Corporation Sdn Bhd, Happy Graphic Recreation Sdn Bhd, Lion Establishment Sdn Bhd, Unique Dynasty Sdn Bhd and IB Mentari Management Sdn Bhd for the letting/tenancy of various properties acquired by Dijaya and/or its nominees pursuant to the Acquisitions after taking into consideration the lettable areas already tenanted by external parties.
(g) Sale and purchase agreement dated 22 June 2012 between Aliran Peluang Sdn Bhd, an 80% owned subsidiary company of Dijaya, and Chua Joo Cheng @ Chua Su Yin wherein Chua Joo Cheng @ Chua Su Yin has agreed to sell and Aliran Peluang Sdn Bhd has agreed to purchase 11 parcels of lands held under GRN 123526, Lot 3432, GRN 281066, Lot 3433, GRN 365946, Lot 3434, GRN 28107, Lot 3435, GRN
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95752, Lot 3440, GRN 95755, Lot 3434, GRN 95761, Lot 3442, PN 1573, Lot 3445, PN 15774, Lot 3446 and GRN 95775, Lot 3447 all in Mukim Pulai, Daerah Johor Bahru, Negeri Johor for a total cash consideration of RM105,069,016.80. Pursuant to the terms of the agreement, the completion date falls on 21 August 2012 and the extended completion date falls on 21 October 2012.
(h) Sale and purchase agreement dated 8 June 2012 between Advent Nexus Sdn Bhd, a wholly-owned subsidiary of Dijaya, and Multi-Purpose Holdings Berhad, where Advent Nexus Sdn Bhd purchased a piece of freehold land held under Geran 5826 Lot 474 Seksyen 19, Bandar Kuala Lumpur, Daerah Kuala Lumpur, Negeri Wilayah Persekutuan together with a building constructed thereon and all the fixtures, fittings, furniture and equipments therein for a cash consideration of RM54,000,000. The sale and purchase agreement has been completed on 27 July 2012.
(i) 23 sale and purchase agreements (excluding the IRSB SPA referred to in (e) above) and 17 share sale agreements (including the IRSB SSA referred to in (e) above) all dated 9 April 2012 (save and except for the IRSB SSA which is dated 6 July 2012) between Dijaya and the Vendors to acquire from the respective Vendors the entire equity interest in the Identified Companies and the Identified Properties for the Purchase Consideration. The parties have subsequently on 30 August 2012 executed 2 supplemental letters to adjust/revise and confirm the Purchase Consideration pursuant to the terms of the aforesaid agreements. The said sale and purchase agreements and share sale agreements have been completed on 30 August 2012.
(j) Amalgamation exercise agreement dated 6 March 2012 between the Vendors pursuant to which Dijaya and the Vendors propose to participate in and implement an asset amalgamation and rationalisation exercise involving the amalgamation of the assets and properties of Dijaya Group with certain identified assets and properties of the Vendors, as amended by a supplemental agreement dated 6 July 2012.
(k) Joint venture agreement dated 11 November 2011 in respect of Tropicana Ivory Sdn Bhd between Ivory Properties Group Berhad, Dijaya Ivory Utilities Sdn Bhd and Tropicana Development (Penang) Sdn Bhd (a wholly-owned subsidiary of Dijaya), to develop a piece of land situated in Bayan Mutiara, Penang.
(l) Sale and purchase agreement dated 7 October 2011 between Ong Soo Keok, Ong Ghee Sai, Ong Ghee Soon & Ong Soo Keok as executors of the estate of Loh Ah Moy (as vendor) and Ace Rhythm Sdn Bhd (now known as Tropicana KL Development Sdn Bhd), a 99.9% owned subsidiary of Dijaya, to purchase a piece of freehold land held under GRN 28425, Lot 784 Seksyen 0057, Bandar Kuala Lumpur, Daerah Kuala Lumpur, Negeri Wilayah Persekutuan for a cash consideration of RM43,123,200. The transaction is pending completion in accordance with the terms of the sale and purchase agreement.
(m) Sale and purchase agreement dated 7 October 2011 between G.P.Y. (Holding) Sdn Bhd (as vendor) and Ace Rhythm Sdn Bhd (now known as Tropicana KL Development Sdn Bhd), a 99.9% subsidiary of Dijaya, to purchase two (2) pieces of freehold land held under GRN 28463, Lot 779 Seksyen 0057, GRN 28423, Lot 780 Seksyen 0057, both in Bandar Kuala Lumpur, Daerah Kuala Lumpur, Negeri Wilayah Persekutuan for a cash consideration of RM22,129,936. The transaction is pending completion in accordance with the terms of the sale and purchase agreement.
(n) Sale and purchase agreement dated 5 September 2011 between Taiyo Resort (KL) Berhad (as vendor) and Tropicana City Service Suites Sdn Bhd (now known as Tropicana Kajang Hill Sdn Bhd), a wholly-owned subsidiary of Dijaya (as purchaser),
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to purchase five (5) parcels of freehold land held under individual titles of H.S.(D) 68253, PT 14533, H.S.(D) 68256, PT 14536, Geran 63194, Lot 12683, all in Bandar Batu 18, Semenyih, Daerah Ulu Langat, Negeri Selangor and Geran 53170, Lot 1258 and Geran 27675, Lot 32 both in Mukim Semenyih, Daerah Ulu Langat, Negeri Selangor for an aggregate cash consideration of RM228,000,000. Pursuant to the terms of the agreement, the completion date of the sale and purchase agreement is on 29 August 2012 and the extended completion date falls on 28 November 2012.
(o) Shareholders agreement dated 15 August 2011 in respect of Magical Heights Sdn Bhd (now known as Tropicana Danga Cove Sdn Bhd) between Accroway Sdn Bhd (now known as Dijaya Tropicana Cove Sdn Bhd), a wholly-owned subsidiary of Dijaya and Iskandar Waterfront Sdn Bhd, to develop 1236 plots of undeveloped vacant subdivided building lots and 190 plots of land with incomplete 3 storey shop apartments, semi-detached bungalow buildings and 212 plots of land both situated in Taman Cahaya Kota Putri, Johor Bahru.
(p) Magical Heights Sdn Bhd (now known as Tropicana Danga Cove Sdn Bhd) had on 15 August 2011 entered into a conditional sale and purchase agreement with Trident World Sdn Bhd (“Trident World”) whereby Trident World agreed to sell and Magical Heights Sdn Bhd agreed to purchase:
(i) 1,236 plots of undeveloped vacant subdivided building lots for commercial and residential development for a cash consideration of RM165,000,000 for an existing title area of 5,431,087 sq ft (“Property 1”); and
(ii) 190 plots of land with immediate 3 storey shop apartments, semi-detached and bungalow buildings measuring approximately 631,784 sq ft for a cash consideration of RM55,000,000 (“Property 2”).
Pursuant to the terms of the agreement, the final completion date of Property 1 and the completion date of Property 2 fall on 4 November 2012.
(q) Sale and purchase agreement dated 8 June 2011 between Chunghwa Picture Tubes (Malaysia) Sdn Bhd (as vendor) and Tropicana Subang Development Sdn Bhd (as purchaser), a wholly-owned subsidiary of Dijaya, to purchase four (4) parcels of land held under GRN 84178, Lot 38513, GRN 84179, Lot 38514, GRN 84180, Lot 38515, GRN 84181, Lot 38516, all in Pekan Country Heights, Daerah Petaling, Negeri Selangor for an aggregate cash consideration of RM385,460,600. The sale and purchase agreement has been completed in accordance with its terms on 21 December 2011.
7.4 Conflict of Interest and the Appropriate Mitigating Measures
Save as disclosed below, after making enquiries as were reasonable in the circumstances, neither Dijaya nor the Joint Lead Arrangers are aware of any existing or potential interest or any circumstances which could give rise to a conflict of interest in this transaction:
(a) RHB Investment Bank
Save for the credit exposure as disclosed below, after making enquiries as were reasonable in the circumstances, RHB Investment Bank is not aware of any existing or potential interest or any circumstances which could give rise to a conflict of interest by virtue of its role as the Principal Adviser, Joint Lead Arranger, Joint Lead Manager, Facility Agent and subscriber in relation to the CP/MTN Programme.
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(i) RHB Investment Bank will be subscribing for up to RM300 million of the Notes to be issued under the CP/MTN Programme.
(ii) RHB Bank, a related company to RHB Investment Bank, will also be providing the BG Facility 1.
(iii) Further, RHB Bank has also provided a revolving credit facility of up to RM100.0 million (“RC Facility”) to Dijaya.
Part of the proceeds from issuance of the Notes under the CP/MTN Programme will be utilised by the Issuer to refinance the RC Facility.
RHB Investment Bank has considered the potential conflict of interest exists as set out above and believe that objectivity and independence in carrying out its respective roles have been and will be maintained at all times on the following basis:
(i) RHB Investment Bank is a licensed investment bank regulated by BNM and the SC and governed under, inter-alia, the BAFIA and the CMSA and its appointment as Principal Adviser, Joint Lead Arranger, Joint Lead Manager, Facility Agent and subscriber for the CP/MTN Programme is in the ordinary course of its business;
(ii) RHB Bank is a licensed commercial bank regulated by BNM and governed by BAFIA and the provision of the BG Facility 1 and RC Facility is in the ordinary course of its business; and
(iii) The conduct of RHB Investment Bank and RHB Bank is also regulated by BAFIA and by their respective own internal controls and checks.
(b) AmInvestment Bank
Save as disclosed below, after making enquiries as were reasonable in the circumstances, AmInvestment Bank is not aware of any existing or potential interest or any circumstances which could give rise to a conflict of interest by virtue of its role as Joint Lead Arranger and Joint Lead Manager in relation to the CP/MTN Programme. AmBank and AmInvestment are respectively indirectly and directly wholly-owned subsidiaries of AMMB Holdings Berhad (“AHB”).
(i) AmBank, a related company of AmInvestment Bank will be subscribing for up to RM200 million of the Notes to be issued under the CP/MTN Programme. Further, AmBank will also be providing the BG Facility 2.
(ii) As at 7 September 2012, AmBank had granted Dijaya Group with credit facilities with a combined limit of up to approximately RM308.80 million (of which RM97.99 million are outstanding) (“AmBank Credit Facilities”).
(iii) Dato’ Rohana Binti Tan Sri Mahmood, who is the Independent Non- Executive Chairman of Dijaya, is the Independent Non-Executive Director of AHB.
(iv) As at 28 August 2012, Mr. Loh Chen Peng, who is the Independent Non- Executive Director of Dijaya, is the Independent Non-Executive Director of AmInvestment Bank, AmIslamic Bank Berhad and AmFamily Takaful Berhad.
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Notwithstanding the aforesaid, AmInvestment Bank is of the opinion that there is no conflict of interest arising from Dato’ Rohana’s position in both Dijaya and AHB in view of the following:
(i) Dato’ Rohana is an Independent Non-Executive Chairman of Dijaya and is not involved in the day-to-day management and operations of Dijaya;
(ii) In the event the board of AHB and/or AmInvestment Bank has to deliberate on matters concerning Dijaya, Dato’ Rohana will declare her directorship in Dijaya and abstain from any board deliberations and voting matters pertaining to Dijaya; and
(iii) In the event the Board has to deliberate on matters concerning the AHB Group, Dato’ Rohana will declare her directorship in AHB and abstain from any board deliberations and voting on matters pertaining to the AHB Group.
AmInvestment Bank is of the opinion that there is no conflict of interest arising from Mr. Loh Chen Peng’s position in both Dijaya and AmInvestment Bank, AmIslamic Bank Berhad and AmFamily Takaful Berhad in view of the following:
(i) Mr. Loh Chen Peng is an Independent Non-Executive Director of Dijaya and is not involved in the day-to-day management and operations of Dijaya;
(ii) In the event the board of AmInvestment Bank, AmIslamic Bank Berhad and/or AmFamily Takaful Berhad has to deliberate on matters concerning Dijaya, Mr. Loh Chen Peng will declare his directorship in Dijaya and abstain from any board deliberations and voting matters pertaining to Dijaya; and
(iii) In the event the Board has to deliberate on matters concerning AmInvestment Bank, AmIslamic Bank Berhad and AmFamily Takaful Berhad, Mr. Loh Chen Peng will declare his directorship in those companies and abstain from any board deliberations and voting on matters pertaining to the aforesaid companies.
AmInvestment Bank has considered the potential conflict of interest exists as set out above and believe that its objectivity and independence in carrying out its respective roles have been and will be maintained at all times on the following basis:
(i) AmInvestment Bank is a licensed investment bank regulated by BNM and the SC and governed under, inter-alia, the BAFIA and the CMSA and its appointment as Joint Lead Arranger and Joint Lead Manager for the CP/MTN Programme is in the ordinary course of its business;
(ii) AmBank is a licensed commercial bank regulated by BNM and governed by BAFIA, and the provision of the BG Facility 2, subscription of the Notes under the CP/MTN Programme and the granting of the AmBank Credit Facilities are in the ordinary course of its business; and
(iii) In addition, the conduct of AmInvestment Bank and AmBank is also regulated by their respective internal policies, controls and requisite checks and balances procedures.
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Appropriate mitigating measures
In order to mitigate or address any potential conflicts of interest from RHB Investment Bank and AmInvestment Bank as described above, the following measures have been/will be taken:
(i) The potential conflict of interest situations have been brought to the attention of the Board and it is hence fully aware of the same. Notwithstanding potential conflicts of interest situations, the Board agreed to proceed with the implementation of the CP/MTN Programme based on the present arrangement and terms;
(ii) RHB Investment Bank and AmInvestment Bank as major arrangers and managers in the Malaysian private debt securities market are committed to upholding their professional integrity and responsibilities in relation to the CP/MTN Programme;
(iii) The role of RHB Investment Bank and AmInvestment Bank will be governed by the relevant agreements and documentation which shall clearly set out the rights, duties and responsibilities of RHB Investment Bank and AmInvestment Bank in their respective capacity as the Principal Adviser, Joint Lead Arrangers and Joint Lead Managers for the CP/MTN Programme; and
(iv) Due diligence review pursuant to the CP/MTN Programme has been undertaken by Messrs Mah-Kamariyah & Philip Koh acting as an external independent legal due diligence solicitors.
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APPENDIX I AUDITED FINANCIAL STATEMENTS FOR 31 DECEMBER 2011, 31 DECEMBER 2010 AND 31 DECEMBER 2009/ ANNUAL REPORT OF DIJAYA
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