Entered Into Between the Company and Generasi Cipta Sdn Bhd
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Naim Indah Corporation Berhad (“Nicorp” or “Company”) ANNOUNCEMENT RE: Heads of Agreement (“HOA”) entered into between the Company and Generasi Cipta Sdn Bhd 1. Introduction The Company is pleased to announce that, it has on 9 February 2012 entered into a Heads of Agreement (“HOA”) with Generasi Cipta Sdn Bhd (“GENCIP”) for the proposed acquisition of 60% in Sagajuta (Sabah) Sdn Bhd (“Sagajuta”) for an indicative price of RM240,000,000.00 (“Purchase Price”) (“Proposed Acquisition”). In addition, Nicorp intends to acquire the remaining 40% equity interest in Sagajuta that is not owned by GENCIP on similar terms as agreed between Nicorp and GENCIP. As at todate, GENCIP has already commenced negotiations with the remaining shareholders of Sagajuta. In this respect, an announcement regarding the acquisition of the remaining 40% equity interest in Sagajuta will be made to Bursa Malaysia Securities Berhad after the agreement(s) has been entered into in due course. 2. Information on GENCIP GENCIP was incorporated on 20 June 2008 as a private limited company in Malaysia under the name of Generasi Cipta Sdn Bhd. The principal activity of GENCIP is investment holding. The authorised share capital of GENCIP is RM100,000 comprising 100,000 ordinary shares of RM1.00 each (“ GENCIP Shares ”), of which 10,000 GENCIP Shares have been issued and credited as fully paid-up. The particulars of the directors and shareholders of GENCIP are as follows: Information on directors: Name 1. Datuk Raymond Chan Boon Siew 2. Tan Tiang Lai Information on shareholders: No. of Ordinary Shares Name of RM1.00 each % of Shareholdings Direct Indirect Direct Indirect 1. Anchor White Sdn. Bhd. 6,965 - 67.69% - Datuk Raymond Chan Boon Siew * - 6,965 67.69% Chu Li Tan * - 6,965 - 67.69% 1 Information on shareholders (continue) : No. of Ordinary Shares Name of RM1.00 each % of Shareholdings Direct Indirect Direct Indirect 2. Bumivesa Sdn. Bhd. 940 - 9.14% - Irhas Putra Bin Rusli ** - 940 - 9.14% Faridah Liz Binti R. Mataram ** - 940 - 9.14% 3. Chen Siew Kim 592 - 5.75% - 4. Dominic Paul Lai Chee Ming 254 - 2.47% - 5. Mohd Nazifuddin Bin Mohd Najib 1,135 - 11.03% - 6. Tan Tiang Lai 296 - 2.88% - 7. Foo Ngee Kee 107 - 1.04% - Note: * Deemed interest by virtue of their shareholdings in Anchor White Sdn. Bhd. pursuant to Section 6A of the Companies Act 1965. ** Deemed interest by virtue of their shareholdings in Bumivesa Sdn. Bhd. pursuant to Section 6A of the Companies Act 1965. 3. Information on Sagajuta Sagajuta was incorporated on 15 May 1999 as a private limited company in Malaysia under the name of Tanasawit Sdn Bhd. Subsequently it changed its name to its current name, Sagajuta (Sabah) Sdn Bhd on 11 September 2000. The principal activities of Sagajuta are property development and property investment holding. The authorised share capital of Sagajuta is RM10,000,000 comprising 10,000,000 ordinary shares of RM1.00 each (“ Sagajuta Shares ”), of which 10,000,000 Sagajuta Shares have been issued and credited as fully paid-up. The particulars of the directors and shareholders of Sagajuta are as follows: Information on directors: Name 1. Mohd Nazifuddin Bin Mohd Najib 2 Datuk Raymond Chan Boon Siew 3. Tan Tiang Lai 2 Information on shareholders: No. of Ordinary No. of Ordinary Shares of RM1.00 Shares of RM1.00 Name each held % of Shareholdings each to be disposed 1. Generasi Cipta Sdn. Bhd. 6,000,000 60% 60% 2. Fantasy Choice Sdn. Bhd. 158,000 1.58% Under negotiation 3. Bumivesa Sdn. Bhd. 376,000 3.76% Under negotiation 4. Datuk Raymond Chan 871,000 8.71% Under negotiation Boon Siew 5. Then Siet Hua 189,000 1.89% Under negotiation 6. Foo Ngee Kee 43,000 0.43% Under negotiation 7. Tan Tiang Lai 118,000 1.18% Under negotiation 8. Wong Gee Ngen 338,000 3.38% Under negotiation 9. Chong Kit Han 237,000 2.37% Under negotiation 10. Chu Li Tan 677,000 6.77% Under negotiation 11. Ng Kian Huat 158,000 1.58% Under negotiation 12. Ng Tian Kang 158,000 1.58% Under negotiation 13. Adelene Wong Lee Hwa 67,600 0.68% Under negotiation 14. Dominic Paul Lai Chee 102,000 1.02% Under negotiation Ming 15. Francis Wong Liong Teck 237,000 2.37% Under negotiation 16. Mohd Nazifuddin Bin 270,400 2.70% Under negotiation Mohd Najib Sagajuta is a 60%-owned subsidiary of GENCIP. The subsidiaries and associate company of Sagajuta and their principal activities are as follows :- Name of company Percentage of the Principal activity(ies) issued and fully paid-up capital that are legally and beneficially owned by Sagajuta 1Borneo Ballroom Sdn Bhd 100% Ballroom operator 1Borneo Hotel Sdn Bhd 100% Hotel operator 1Borneo Management Management of property Corporation Sdn Bhd 100% complexes 1Borneo Seaworld Sdn Bhd 65% Aquaria operator North-East Destiny Sdn Bhd 75% Car park operator Sagajuta Properties (S) Sdn Bhd 100% Investment holding, property leasing and provision of management services 3 Name of company Percentage of the Principal activity(ies) issued and fully paid-up capital that are legally and beneficially owned by Sagajuta Lagenda Erajuta Sdn Bhd 75% Property development, project management and turnkey contractor Sagajuta Creative & Provision of advertisement and Communications Sdn Bhd 40% event organising services Summary of Financial Figures of Sagajuta Financial Year End (“FYE”) 31 December Audited Unaudited Management Account 2008 2009 2010 2011 RM’000 RM’000 RM’000 RM’000 Revenue 297,611 192,143 128,779 191,673 Profit Before Tax (“PBT”) 62,960 20,608 40,657 12,195 Profit After Tax 35,983 6,029 14,644 11,086 Paid Up Capital 2,000 2,000 2,000 10,000 Shareholders Fund 109,507 115,547 110,192 121,333 Total Borrowings 111,496 120,248 122,988 177,507 Dividend - - 20,000 - Decrease in revenue for year 2010 as compare to year 2009 due to decrease in revenue derived from property development. 1Borneo (Podium, 4 hotels, 2 residential condominium) were completed and fully recognised as at year 2009, whereas in year 2010 revenue was recognised for workdone in 1Sulaman & 1Borneo Tower C only. The increase in PBT in year 2010 as compare to year 2009 due to the increase in other income, contributed by disposal of investment properties (“IP”) in year 2010 totalling to RM58 million whereas in year 2009 the disposal of IP totalling to RM25 million only. Increase in revenue for year 2011 as compare to year 2010 due to the increase in revenue derived from property development (higher % of completion as compare to year 2010 for 1Sulaman). The decrease in PBT in year 2011 as compare to year 2010 due to the decrease in other income. Disposal of IP in year 2011 amounting to RM9 million whereas in year 2010 amounting to RM58 million. 4 4. Salient terms of the HOA 4.1 Objectives The objectives of the HOA is to set out the understanding between the Company and GENCIP on certain key matters and of their respective roles, in relation to the Proposed Acquisition as follows : - (a) Confirm agreed key commercial terms; (b) Establish key principles that will form the basis of the Definitive Agreement; (c) Establish the responsibilities of each party; and (d) Establish a timeframe to establish the Definitive Agreement. 4.2 Key terms of the Definitive Agreement on the Proposed Acquisition Both Nicorp and GENCIP have agreed that the terms and conditions of the Definitive Agreement shall have the following key terms:- (a) The Purchase Price is based the estimated net tangible assets (“NTA”) of Sagajuta as at 31 December 2012 after adjusting for estimated revaluation surplus of 1 Borneo Hypermall to be conducted in due course. The adjusted estimated NTA of Sagajuta as at 31 December 2012 is computed as follows:- RM mil Estimated NTA as at 31 December 2012 174.7 Estimated revaluation surplus from 1 Borneo Hypermall 169.8 Adjusted estimated NTA as at 31 December 2012 344.5 x 60% Adjusted estimated NTA for 60% equity interest in Sagajuta 206.7 Purchase Price 240.0 The justification for the premium in the Purchase Price over the adjusted estimated NTA is based on the future prospects of Sagajuta. The Purchase Price will be satisfied by Nicorp via the issuance of:- (i) such number of new ordinary shares at an issue price of RM0.10 per share; and (ii) such number of irredeemable convertible loan stocks (“ ICULS ”) of nominal value of RM0.10 to be issued at RM0.10 per ICULS; after the Proposed Par Value Reduction. The number of new shares and ICULS to be issued in Nicorp shall be negotiated and agreed upon prior to the signing of the Definitive Agreement. 5 4.3 Conditions Precedent This Proposed Acquisition is also based on the understanding that the Company will carry out the following proposals: (i) A proposed reduction in par value from RM0.20 each ordinary share to RM0.10 each ordinary share in which the credit of RM70.2 million arising from the reduction of the par value shall be set-off against the unaudited accumulated losses of the Company of RM64.6 million as at 30 September 2011 (“ Proposed Par Value Reduction ”); (ii) A proposed renounceable rights issues on the basis of one right share of RM0.10 per share (“Rights Shares”) for every one existing share of RM0.10 each together with two free warrants (“ Proposed Rights Issue ”) after the Proposed Par Value Reduction; and (iii) A proposed private placement of 300 million new Nicorp ordinary shares of RM0.10 each to investors to be indentified (“ Placement Shares ”) on the basis that each Placement Share will also be attached with two free warrants (“ Proposed Private Placement ”) after the Proposed Par Value Reduction.