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PARKSON HOLDINGS BERHAD (“Parkson Holdings” or the “Company”)
1)
Proposed Acquisition of Dimensi Andaman; and
2)
Proposed Acquisition of AKR Land
collectively, the “Proposals”
1.
INTRODUCTION
The Board of Directors of the Company wishes to announce that Megan Mastika Sdn Bhd
(“Megan Mastika”), a wholly-owned subsidiary of the Company, had on 24 December 2014
entered into two (2) separate sale and purchase agreements with Ayer Keroh Resort Sdn Bhd
(“AKR” or the “Vendor”) for the following proposals (“Proposals”):
a) a sale and purchase agreement (“Dimensi Andaman SPA”) for the proposed acquisition by
Megan Mastika of 300,000 ordinary shares of RM1.00 each fully paid representing 100%
equity interest in Dimensi Andaman Sdn Bhd (“Dimensi Andaman”) from the Vendor for a
cash consideration of RM1.00 and the assignment of the proforma amount due to AKR by
Dimensi Andaman of RM53.72 million to Megan Mastika for a cash consideration of
RM53.72 million (“Dimensi Andaman Purchase Consideration”) (“Proposed Acquisition of
Dimensi Andaman”); and
b) a sale and purchase agreement (“AKR Land SPA”) for the proposed acquisition by Megan
Mastika of 6 acres of land located in Kawasan Bandar XLII, Daerah Melaka Tengah, Negeri
Melaka (“AKR Land”) from the Vendor for a cash consideration of RM39.24 million (“AKR
Land Purchase Consideration”) (“Proposed Acquisition of AKR Land”).
The Dimensi Andaman Purchase Consideration and the AKR Land Purchase Consideration shall
collectively be referred to as the “Total Purchase Consideration”.
2.
DETAILS OF THE PROPOSALS
2.1
Background information
The State Government of Malacca has granted AKR the sole and exclusive right to carry
out reclamation and development works on the following:
a) 23.22 acres of land located in Kawasan Bandar XLII, Daerah Melaka Tengah, Negeri
Melaka (“DA Land”); and
b) AKR Land, which is adjoining the DA Land.
The DA Land and the AKR Land (totalling 29.22 acres) shall collectively be referred to
as the “Lion City Land”.
In December 2012, Megan Mastika had completed the acquisition of 15 acres out of the
undivided interest of the DA Land from Dimensi Andaman for a cash consideration of
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RM93 million and Dimensi Andaman owns the balance 8.22 acres out of the undivided
interest of the DA Land.
To-date, the reclamation work on the DA Land had been completed while the reclamation
work on the AKR Land has not commenced. The State Government of Malacca had
issued titles for the DA Land and the AKR Land, with leasehold term of 99 years ending
28 November 2111 and 25 May 2113 respectively, with “Bangunan Perniagaan” as
category of land use pursuant to the reclamation.
The Lion City Land of 29.22 acres is intended for mixed development purposes (“Lion
City”).
Messrs Henry Butcher Malaysia (Malacca) Sdn Bhd (“Henry Butcher”), an independent
valuer, had on 18 December 2014 certified the market value for the Lion City Land at
RM190.96 million.
2.2
Information on Dimensi Andaman
Dimensi Andaman was incorporated in Malaysia under the Companies Act, 1965 as a
private limited liability company on 15 May 2012. To-date, Dimensi Andaman has an
authorised share capital of RM400,000 comprising 400,000 ordinary shares of RM1.00
each of which 300,000 ordinary shares have been issued and fully paid up. The principal
activities of Dimensi Andaman are investment holding and property development.
Dimensi Andaman is a wholly-owned subsidiary of AKR and the directors of Dimensi
Andaman are Mr Cheng Yong Liang and Ms Cheng Hui Ya, Serena. Dimensi Andaman
is the beneficial owner of the 8.22 acres of the DA Land.
The unaudited net loss of Dimensi Andaman for the financial year ended 30 June 2014
was approximately RM0.9 million whilst the net liabilities of Dimensi Andaman as at 30
June 2014 was approximately RM1.2 million.
2.3
Information on the Vendor
AKR was incorporated in Malaysia under the Companies Act, 1965 as a private limited
liability company on 25 August 1983. To-date, AKR has an authorised share capital of
RM23,500,000 divided into 20,000,000 ordinary shares of RM1.00 each and 3,500
preference shares of RM1,000 each, with an issued and paid-up capital of RM20,000,000,
comprising 20,000,000 ordinary shares of RM1.00 each fully paid.
AKR is a company wherein Tan Sri William H.J. Cheng (“TSWC”) is deemed to have a
substantial interest. The directors of AKR are Mr Cheng Yong Liang, Ms Cheng Hui Ya,
Serena and Mr Yeo Keng Leong.
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The original cost and date of investment of Dimensi Andaman and the AKR Land by
AKR are set out below:
(a)
Dimensi Andaman
Date of
investment
1 August 2012
No. of shares
acquired/subscribed
2
Type of
shares
Ordinary
shares
299,998
Ordinary
shares
20 November 2013
300,000
(b)
Cost of
investment
(RM)
2
299,998
300,000
AKR Land
The State Government of Malacca had on 5 December 2012 granted AKR the sole
and exclusive right to carry out reclamation and development work on the AKR
Land. To-date, the reclamation work on the AKR Land has not commenced and the
estimated cost for the reclamation works is approximately RM9 million.
2.4
Basis and justification for the Total Purchase Consideration
The Total Purchase Consideration was arrived at on a willing buyer-willing seller basis
after taking into consideration the size of land to be acquired by Megan Mastika based on
the market valuation as certified by Henry Butcher (i.e. 14.22/29.22 acres x RM190.96
million) (“Market Valuation”).
Total
Purchase
Consideration based
on Market Valuation
2.5
Proposed
Acquisition of
Dimensi Andaman
(a)
Proposed
Acquisition of
AKR Land
(b)
Total Purchase
Consideration
(a+b)
RM53.72 million
(8.22 acres)
RM39.24 million
(6 acres)
RM92.96 million
(14.22 acres)
Salient terms of the Proposals
The salient terms of the Proposals are as follows:
(a)
Megan Mastika shall acquire Dimensi Andaman and the AKR Land free from
charges, liens, pledges or any other encumbrances.
(b)
Upon completion of the Proposed Acquisition of Dimensi Andaman, Megan
Mastika shall own the entire equity interest in Dimensi Andaman which in turn
owns the only asset of 8.22 acres of the DA Land. All other assets and liabilities of
Dimensi Andaman shall be assigned or novated to AKR upon completion of the
Proposed Acquisition of Dimensi Andaman.
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2.6
(c)
AKR undertakes that it shall, at its own costs and expenses, complete or procure
the completion of the reclamation work on the AKR Land within three (3) years
from the completion date of the AKR Land SPA in relation to the Proposed
Acquisition of AKR Land, failing which, Megan Mastika shall be entitled to the
remedy of specific performance and damages against AKR. For information
purposes, the cost for the reclamation works is estimated to be approximately RM9
million.
(d)
Each of the Dimensi Andaman Purchase Consideration and the AKR Land
Purchase Consideration shall be paid by Megan Mastika to AKR within a period of
one (1) month from the date of the respective Dimensi Andaman SPA and AKR
Land SPA, with an automatic extension of one (1) month upon the expiry of the
aforesaid period or by such later date as mutually agreed by both parties, subject to
payment of interest at the rate of 8% per annum on the outstanding amount
calculated on daily basis from the first day of the extended period until the date of
full payment.
Source of funds
The Total Purchase Consideration will be funded by internally generated funds of the
Parkson Holdings Group.
2.7
Liabilities to be assumed by the Parkson Holdings Group
There is no liability, including contingent liabilities and guarantees to be assumed by the
Parkson Holdings Group arising from the Proposals.
3.
RATIONALE FOR THE PROPOSALS
In line with the Parkson Holdings Group’s objective of owning key shopping malls, the Proposals
will complement the Parkson Holdings Group in developing a shopping mall in Melaka (“Melaka
Parkson Mall”) as the Lion City Land is strategically located in a prime area designated for mixed
development purposes.
The Lion City is an integrated mixed development including the Melaka Parkson Mall and is
expected to contribute positively to the future earnings of the Parkson Holdings Group. With the
complementary income stream derived from the aforesaid mixed development, the eventual total
development cost of the Melaka Parkson Mall is expected to reduce and this will further boost the
investment yield for the Melaka Parkson Mall.
4.
EFFECTS OF THE PROPOSALS
4.1
Share capital and substantial shareholders’ shareholdings
The Proposals will not have any effect on the issued and paid-up capital and the
substantial shareholders’ shareholdings in Parkson Holdings as the Proposals do not
involve the issuance of new shares by Parkson Holdings.
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4.2
Earnings and earnings per share (“EPS”)
The Proposals are not expected to have a material impact on the earnings and EPS of the
Parkson Holdings Group for the financial year ending 30 June 2015 and are expected to
contribute positively to the future earnings of the Parkson Holdings Group.
4.3
Net assets (“NA”) and NA per share
On a proforma basis, the Proposals are not expected to have a material impact on the NA
and NA per share of the Parkson Holdings Group based on the audited consolidated
statement of financial position as at 30 June 2014.
4.4
Gearing
The Proposals are not expected to have a material impact on the gearing of the Parkson
Holdings Group based on the audited consolidated statement of financial position as at 30
June 2014.
5.
APPROVALS REQUIRED
The Proposals are not subject to the approval of the shareholders of Parkson Holdings and any
authorities.
6.
INTER-CONDITIONALITY OF THE PROPOSALS
The Proposed Acquisition of Dimensi Andaman and the Proposed Acquisition of AKR Land are
not inter-conditional with each other.
7.
DIRECTORS’ AND MAJOR SHAREHOLDERS’ INTERESTS
7.1
Directors’ Interests
The following Directors of the Company do not consider themselves independent in
respect of the Proposals (“Interested Directors”):
(i)
TSWC, the Chairman and Managing Director, and a major shareholder of Parkson
Holdings, is deemed to have a substantial interest in AKR and its subsidiary,
Dimensi Andaman; and
(ii)
Mr Ooi Kim Lai, is an employee of a company in which TSWC has a substantial
interest.
The Interested Directors have abstained and will continue to abstain from all Board
deliberations and voting at meetings of the Board in relation to the Proposals.
Save as disclosed above, none of the other Directors of the Company has any interest,
direct or indirect, in the Proposals.
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7.2
Major Shareholders’ Interests
Other than TSWC, the following major shareholders of the Company do not consider
themselves independent in respect of the Proposals:
(i)
(ii)
(iii)
(iv)
(v)
(vi)
8.
Tan Sri Cheng Yong Kim;
Dynamic Horizon Holdings Limited;
Lion Industries Corporation Berhad;
LLB Steel Industries Sdn Bhd;
Steelcorp Sdn Bhd; and
Amsteel Mills Sdn Bhd.
TRANSACTION WITH THE SAME RELATED PARTY FOR THE PRECEDING 12
MONTHS
The Company and its subsidiaries do not have any transaction with AKR for the past 12 months.
9.
AUDIT COMMITTEE’S STATEMENT
The Audit Committee of the Company, after having considered all aspects of the Proposals, is of
the opinion that the Proposals are in the best interest of the Company, fair, reasonable and on
normal commercial terms, and not detrimental to the interest of the minority shareholders of the
Company.
10.
STATEMENT BY THE BOARD OF DIRECTORS
The Board (save for the Interested Directors), after having considered all aspects of the Proposals,
is of the opinion that the Proposals are in the best interest of the Company.
11.
THE PROSPECTS AND RISK FACTORS OF THE PROPOSALS
The Lion City Land is intended for mixed integrated development which include a shopping mall
and other property components.
The Proposals will allow the Parkson Holdings Group to develop a shopping mall at a strategic
location in Melaka amongst the famous tourist attractions and in an area planned for mixed
integrated development with the advantage of the sea frontage.
The Proposals are not expected to have any material risk factor associated with the Lion City
Land except for the general economic risk, business risk and investment risk commonly
associated with land acquisition.
12.
ESTIMATED TIME FRAME FOR COMPLETION OF THE PROPOSALS
The Proposals are expected to be completed by the first quarter of 2015.
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13.
HIGHEST PERCENTAGE RATIO APPLICABLE TO THE PROPOSALS PURSUANT
TO PARAGRAPH 10.02(g) OF THE MAIN MARKET LISTING REQUIREMENTS OF
BURSA MALAYSIA SECURITIES BERHAD (“PERCENTAGE RATIO”)
The highest Percentage Ratio is 3.59%.
14.
DOCUMENTS FOR INSPECTION
Copies of the Dimensi Andaman SPA dated 24 December 2014, the AKR Land SPA dated 24
December 2014 and the Valuation Certificate dated 18 December 2014 are available for
inspection by the shareholders of the Company at the Registered Office of the Company at Level
14, Lion Office Tower, No. 1 Jalan Nagasari, 50200 Kuala Lumpur during normal business hours
from Mondays to Fridays (except for public holidays) for a period of three months from the date
of this announcement.
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