Draft RTO Announcement V6 Clean
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AUSSINO GROUP LTD (Company Registration No.: 199100323H) (I) PROPOSED ACQUISITION OF THE ENTIRE ISSUED SHARE CAPITAL OF MAX STRATEGIC INVESTMENTS PTE LTD FOR AN AGGREGATE CONSIDERATION OF S$70 MILLION (II) PROPOSED DISPOSAL OF THE COMPANY’S EXISTING BUSINESSES TO SAMCORP CAPITAL CORPORATION 1 INTRODUCTION The Board of Directors (the “ Board ”) of Aussino Group Ltd (the " Company " and together with its subsidiaries, the “ Group ”) refers to the announcement dated 18 June 2012 (the “MOU Announcement ”) wherein the Company announced that it had entered into a memorandum of understanding dated 15 June 2012 with the Max Myanmar Group of Companies (“ MMG ”) in connection with the proposed acquisition (the “ Proposed Acquisition ”) by the Company of the entire issued capital of Max Strategic Investments Pte Ltd (the “Target ”). Further to the MOU Announcement, the Board is pleased to announce that it has on 24 July 2012 entered into a conditional sale and purchase agreement (the "S&P Agreement ") with Max Singapore Holdings Pte Ltd (the " Vendor "), the sole shareholder of the Target, for the purchase by the Company from the Vendor of the entire issued and paid-up share capital of the Target for an aggregate consideration of S$70,000,000 (the "Purchase Consideration "). The Purchase Consideration is to be satisfied in full by the allotment and issue to the Vendor (or as it may direct) of an aggregate of 218,750,000 new ordinary shares in the capital of the Company (" Consideration Shares ") (which, for the avoidance of doubt, will be issued after the completion of the Proposed Share Consolidation (defined in paragraph 2.3.3 below)) at the issue price of S$0.32 for each Consideration Share (" Issue Price "). The Proposed Acquisition constitutes as a “Very Substantial Acquisition” or “Reverse Takeover” transaction pursuant to Chapter 10 of the Listing Manual and will be subject to, inter alia , the approval of the shareholders of the Company (the “ Shareholders ”) at an extraordinary general meeting to be convened. Further details of the Proposed Acquisition are set out below in Paragraph 2 of this Announcement. The Board also wishes to announce that it has on 24 July 2012 entered into a conditional sale and purchase agreement (the “Disposal Agreement ”) with Samcorp Capital Corporation (the “Purchasing Shareholder ”), a controlling shareholder of the Company, for the sale (the “Proposed Disposal ”) of the entire issued and paid-up capital of Amici International Trade Inc (“Amici ”) (proposed to be re-named Aussino Inc following the completion of the Proposed Acquisition), a wholly-owned subsidiary of the Company, to the Purchasing Shareholder. Amici shall on completion of the Proposed Disposal be the beneficial owner of all the shares of all the existing subsidiaries currently held by the Company (the “ Sale Companies ”). The consideration of S$9,400,000 (the “ Disposal Consideration ”), has been arrived at on a willing buyer and willing seller basis having taken into account the unaudited net asset value of the Group as at 30 June 2012. The Purchasing Shareholder is wholly-owned by Mr Anthony Lim, the Chairman of the Group. The Proposed Disposal constitutes an interested person transaction which will be subject to, inter alia , the approval of the independent Shareholders at an extraordinary general meeting to be convened. Further details of the Proposed Disposal are set out below in Paragraph 3 of this Announcement. 2 OVERVIEW OF THE PROPOSED ACQUISITION For the purpose of this Announcement, the Proposed Acquisition (including the issue of the Consideration Shares) together with certain related transactions proposed in conjunction with the Proposed Acquisition further described below, including, the Proposed Share 1 Consolidation, the proposed change of name of the Company, the Whitewash Resolution and the proposed appointment of new directors of the Company, shall be collectively referred to as the “ Proposed RTO Transactions ”. Further information on the Proposed RTO Transactions will be provided in a circular to the Shareholders to be issued by the Company in due course (the " Circular "). 2.1 Information on the Target, the Vendor and Key Management of the Target 2.1.1 Information on the Target The Target is an investment holding company incorporated in Singapore on 15 June 2012 for the purpose of the Proposed Acquisition. The Target has on 24 July 2012, entered into an asset purchase agreement to acquire from Max Myanmar Co., Ltd, the rights, title, interests and benefits in and to all the assets and resources employed by its energy business unit in the operation of petrol kiosks in Myanmar (the “ Max Energy Business Unit ”). The assets and resources which will be sold or transferred from the Max Energy Business Unit to the Target include leases or occupational rights to land which are used for operating petrol kiosks, permits for the operation of petrol kiosks, the petrol kiosks, office buildings, barges, tug boats, bowsers, motor vehicles as well as electrical installation and equipment, office equipment and tools and other balance sheet items including cash, inventory and trade receivables. The Max Energy Business Unit was established to meet the petroleum demand of large multi- nationals and smaller commercial operators in Myanmar. The Max Energy Business Unit was initially founded as an oil trading business in early 2009 and has since expanded into the operation of petrol kiosks across Myanmar. Currently, the Max Energy Business Unit operates 21 petrol kiosks across various cities in Myanmar including, Mandalay, Naypyitaw, Bago, Ayeyarwady and Yangon, and employs more than 500 employees. The Max Energy Business Unit’s main products include motor spirit, 92 and 95 RON octane, high speed and premium diesels and gasohol which are sourced from local suppliers in Myanmar as well as overseas suppliers which are mainly based in Singapore. The petroleum products are transported via vessels (for overseas supplies), tug boats and barges (for local supplies) for storage in facilities located in Myanmar. From the storage facilities, the petroleum products are then transported via bowsers to the corporate clients and to petrol kiosks for sale to retail customers. Future plans for the business include increasing the number of petrol kiosks in Myanmar. Any net proceeds raised from the Placement (as defined in paragraph 4 of this Announcement) will be used for organic growth via the expansion of the number of petrol kiosks in Myanmar and for general working capital purposes. 2.1.2 Information on the Vendor The Vendor is a private investment holding company incorporated in Singapore for the purpose of the Proposed Acquisition. As at the date of this Announcement, more than 90% of the share capital of the Vendor is owned by U Zaw Zaw. U Zaw Zaw is the founder of MMG and has been the chairman since 1993. MMG is one of the largest diversified business groups in Myanmar and has a strong track record in several business areas including trading, manufacturing, construction, hotel & tourism, services, banking and mining. U Zaw Zaw is also currently the president of Ayeyarwady Bank. U Zaw Zaw graduated from Yangon University with a Bachelor of Science in Mathematics. 2 2.1.3 Key Management of the Target i) Dennis Lim Ban Lai (“Dennis Lim”) - Proposed chief executive officer and executive director of the Company pursuant to the completion of the Proposed Acquisition Dennis Lim is the managing director of Maxiasia Enterprise Pte Ltd., an affilate of MMG. As a senior executive of MMG, he is responsible for overseeing the trading, manufacturing and hotel divisions of MMG. Before being appointed as the managing director, Dennis Lim held appointments as the deputy general manager of the marketing department of Komatsu Asia Pacific Pte Ltd and the country manager for the Myanmar operations of Myanmar JPN Equipment Trading Co., Ltd. Dennis Lim obtained a Graduate Diploma in Sales & Marketing from the Marketing Institute of Singapore and is currently pursuing a Bachelor of Communications and Media Management at the University of South Australia. (ii) David Wang Soe Lin (“David Wang”) - Proposed executive director of the Company pursuant to the completion of the Proposed Acquisition David Wang is an executive director for Maxiasia Enterprise Pte Ltd. He is also a senior executive of MMG who is responsible for overseeing Ayeyarwady Bank of MMG. David Wang obtained a Graduate Diploma in Building and Estate Management from Ngee Ann Polytechnic and went on to graduate from the London School of Economics with a Bachelor of Science in Business (Honours). 2.1.4 Pro-Forma Financial Highlights of the Target A summary of the pro-forma financial information of the Target is set out in Appendix A to this Announcement. 2.2 Rationale for the Proposed Acquisition The Company was placed on the Watch-List of the Singapore Exchange Securities Trading Limited (the “ SGX-ST ”) pursuant to Rule 1311 of the Listing Manual with effect from 6 September 2011 after recording pre-tax losses for the three (3) most recently completed consecutive financial years. The Company would be required to meet the requirements of Rule 1314 of the Listing Manual within 24 months from 6 September 2011, failing which the SGX-ST may either delist the Company or suspend trading of the shares of the Company with a view to delisting the Company. Subsequent to the placing of the Company on the SGX-ST Watch-List, it has continued to operate under challenging retail market conditions. The Board is of the view that the Proposed Acquisition presents an opportunity for the Company to acquire a new operating business with significant growth potential in an emerging market that has recently introduced political and business reforms. These developments have attracted considerable investment interest from leading economies such as the United States and Australia as well as neighbouring Asian economies, including Singapore.