BONIA (9288) Date Announced : 14 May 2013 T
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GENERAL ANNOUNCEMENT COMPANY NAME : BONIA CORPORATION BERHAD STOCK NAME : BONIA (9288) Date Announced : 14 May 2013 Type : Transactions (Chapter 10 of Listing Requirements) - Non Related Party Transactions Subject : Acquisition of Property by CRG Incorporated Sdn Bhd, a wholly- owned subsidiary of Bonia Corporation Berhad for a total consideration of RM20,936,500.00. 1. Introduction The Board of Directors of Bonia Corporation Berhad (“Bonia” or “the Company”) wishes to announce that CRG Incorporated Sdn Bhd (“CRG”), a wholly-owned subsidiary of Bonia had on 14 May 2013 entered into seven (7) sale and purchase agreements (“SPAs”) respectively with Platinum Starhill Sdn Bhd (Company No. 891753-W), (“PSSB”) for the purpose of acquiring an office block (known as Block C) comprises of 7 parcels under unit No. LG1, Level 1, Level 2, Level 3, Level 4, Level 5 and Level 6 under the project known as “Platinum Starhill Business Centre” located in Daerah Ulu Langat, State of Selangor Darul Ehsan (the “Property”) for a total consideration of RM20,936,500.00 (the “Acquisition”):- 2. Information on the Acquisition 2.1 Details of CRG CRG is a wholly-owned subsidiary of Bonia, a private limited company incorporated in Malaysia on 23 November 2009 under the Companies Act, 1965 and having its registered office at 4th Floor, No. 62, Jalan Kilang Midah, Taman Midah, Cheras, 56000 Kuala Lumpur. The authorised share capital of CRG is RM50,000,000.00 divided into 50,000,000 ordinary shares of RM1.00 each of which 20,000,000.00 ordinary shares have been issued and paid-up. CRG is principally an investment holdings and management company. Its subsidiary companies are involved in marketing, distribution and export of fashionable goods and accessories. 2.2 Details of PSSB PSSB is a private limited company incorporated in Malaysia on 5 March 2010 under the Companies Act, 1965 and having its registered office at 11-2-1, Jalan 4/101C, Cheras Business Centre, Taman Cheras, Batu 5 Jalan Cheras, 56100 Kuala Lumpur. 1 The authorised share capital of PSSB is RM500,000.00 divided into 500,000 ordinary shares of RM1.00 each of which 250,000 ordinary shares have been issued and paid-up. PSSB is principally involved in property development. PSSB is the registered and beneficial owner of the freehold land held under HS (D) 131905, PT No. 49975, Mukim Cheras, Daerah Ulu Langat, State of Selangor Darul Ehsan (“said Land”) and is currently developing the said Land under the project named “Platinum Starhill Business Centre” which consists of 3 blocks of 6-storey office building, namely Block A, Block B and Block C on top of 3-storey car park. 2.3 Details of the Properties The Property is an office block (known as Block C) comprise of 7 parcels under unit LG1, Level 1, Level 2, Level 3, Level 4, Level 5 and Level 6 with a total area of approximately 41,873 square feet to be erected on the said Land. The said Land is presently charged to AmBank (M) Berhad (8515-D) as security for loan facilities granted to PSSB. The term of tenure of the acquired Property is Freehold. 2.4 Basis of Arriving at the Purchase Consideration The total purchase consideration of RM20,936,500.00 or RM500 per square feet for the Property was arrived at a willing buyer-willing seller basis after taking into consideration the pricing of similar project development in the surrounding area as below:- Name of Project Property Type Selling Price (per Development square feet) Connaught Avenue, Cheras Strata Shop-office RM503 to RM557 Ikon Connaught, Cheras Strata office unit RM500 to RM570 The Company is not privy to the financial information on the development cost or net profits attributed to the Property. 2.5 Salient Terms of the SPAs 2.5.1 Terms of payment of the Purchase Consideration for the Property are as follows:- i. A deposit of RM2,093,650.00 or 10% of the total purchase consideration had been paid by CRG to PSSB upon signing of the SPAs. ii. The balance of 90% of the total purchase consideration shall be paid by CRG to PSSB according to the stage of works completed by PSSB as stated in the Third Schedule of the SPAs. 2.5.2 Both PSSB and CRG had expressly agreed and declared that the position of the Property in relation to the other lots as shown in the Floor Plan in the First Schedule of the SPAs and the measurements, boundaries and area of the Parcel as given therein are believed but not guaranteed to be correct and if the measurements, boundaries and area 2 of the Property as shown in the Floor Plan shall be different from its measurements, boundaries and/or area as shown in the strata title to the Property when issued, there shall be an adjustment of the Purchase Price for the difference (if any) in excess of two per cent (2%) of the area as shown in the Floor Plan calculated at the rate as stated in Part 7 of Schedule A of the SPAs. 2.5.3 CRG shall not lodge any caveat or cause any caveat to be lodged on the said Land or any portion thereof. If CRG breaches this obligation, PSSB shall be entitled to terminate the SPAs in the manner as prescribed therein. 2.5.4 The Developer undertakes to deliver the Property to CRG free from encumbrances upon handing over vacant possession of the Property pursuant to the terms and conditions of the SPAs. 2.6 Liabilities to be assumed by CRG There are no liabilities, including contingent liability and encumbrances, to be assumed by CRG arising from the Acquisition. 2.7 Source of funding The source of funding for the Acquisition will be from the internally generated funds and partly financed by bank borrowing. The breakdown of the intended source of funding of the acquisition will be as below Source of funds Amount (RM) % Internally generated funds 6,280,950.00 30 Borrowings 14,655,550.00 70 Total 20,936,500.00 100 3. Financial Effects The Acquisition is not expected to have any material impact on the earnings per share, net assets per share, gearing, share capital and substantial shareholders’ shareholdings of Bonia for the financial year ending 30 June 2013. 4. Risk factors The Board of Directors of Bonia is not aware of any material risk factors arising from the Acquisition other than the ordinary property market and global economic risks. However, the Board shall undertake various market studies, appropriate business strategies and measures to mitigate these risks. 5. Highest percentage ratio The highest percentage ratio pursuant to Rule 10.02(g) of the Bursa Malaysia Securities Berhad Main Market Listing Requirements is 7.37% based on the audited accounts for the year ended 30 June 2012. 3 6. Approval Required The Acquisition is not subject to the approval of shareholders and any relevant government authorities. 7. Directors’ and Major Shareholders’ Interests To the best knowledge of the Directors, none of the Directors and major shareholders of Bonia and persons connected to the Directors and major shareholders have any direct or indirect interest in the Acquisition. 8. Rationale and Prospects Due to the rapid expansion by CRG and its subsidiary companies, CRG has estimated that it will need at least an additional of 20,000 to 30,000 square feet of offices space. With the acquisition of the Property, it will reduce CRG’s overall dependency on tenancy renewal, which is uncertain and subject to market fluctuation. The Property is strategically located near Kuala Lumpur City Centre and Klang Valley where most of the Group retail points are located and it has excellent connectivity through an existing network of highways such as the Cheras East-West Highway, Cheras-Kajang Highway which makes the investment a great potential of capital returns. Besides, this freehold development is close to the public transportation hub of Terminal Bersepadu Selatan-Bandar Tasik Selatan (TBS-BTS) and upcoming 51km MRT Sungai Buloh-Kajang Line’s Plaza Phoenix station, renowned university and other amenities. 9. Statement by Directors The Board of Directors of Bonia, having taken into consideration all aspects of the Acquisition, is of the opinion that the Acquisition is in the best interests of Bonia. 10. Estimated time frame for the completion of the Acquisition The Acquisition is expected to be completed within thirty six (36) months from the SPAs date. The Property is currently under construction and is expected to be completed by end of 2014. 11. Documents for Inspection The SPAs is available for inspection at the registered office of the Company at Lot 10, The Highway Centre, Jalan 51/205, 46050 Petaling Jaya, Selangor Darul Ehsan from Monday to Friday (except public holidays) during normal office hours for a period of three (3) months from the date of this announcement. This announcement is dated 14 May 2013. 4 .