IPG-Dispose Jesselton Land-Final

IVORY PROPERTIES GROUP BERHAD (673211-M)
Stock Name
:
IVORY
Type
:
GENERAL ANNOUNCEMENT
Subject
:
TRANSACTIONS (CHAPTER 10 OF LISTING REQUIREMENTS)
NON RELATED PARTY TRANSACTIONS
Description
:
PROPOSED DISPOSAL OF LAND BY IVORY INDAH SDN BHD, A WHOLLYOWNED SUBSIDIARY OF IVORY PROPERTIES GROUP BERHAD FOR A
TOTAL CONSIDERATION OF RM150,000,000
1.
INTRODUCTION
1.1
The Board of Directors of Ivory Properties Group Berhad ("Ivory" or the "Company") wishes to
announce that Ivory Indah Sdn. Bhd. ("IISB" or the “Vendor”) had, on 14 January 2015, entered
into a Sale and Purchase Agreement ("SPA" or “Agreement”) with Jesselton Peak Sdn Bhd
(Company No. 1119473-W) (“JPSB” or “the Purchaser”) for the disposal of all that parcel of
freehold land (“the Property”) more particularly described under item 2.3 for Ringgit Malaysia
One Hundred Fifty Million (RM150,000,000) only (“Disposal Price”) (“the Proposed Disposal”)
subject to the terms and conditions as stipulated in the SPA.
2.
BACKGROUND INFORMATION
2.1
Information on IISB
IISB was incorporated as a private limited company in Malaysia under the Companies Act, 1965
on 20 September 2002. The present authorised share capital of IISB is RM5,000,000
comprising 5,000,000 ordinary shares of RM1 each of which 2,000,000 shares of RM1 each
were issued and fully paid-up. IISB is a wholly-owned subsidiary of the Company.
The principal activity of IISB is property development. The Directors of IISB are Dato’ Low Eng
Hock and Mr Loh Chin Chuen.
2.2
Information on JPSB
JPSB was incorporated as a private limited company in Malaysia under the Companies Act,
1965 on 24 November 2014. The present authorised share capital of JPSB is RM400,000
comprising 400,000 ordinary shares of RM1 each.
The total issued and paid-up share capital of JPSB is RM400,000 comprising 400,000 ordinary
shares of RM1 each.
Shareholding in JPSB
Directors & Shareholders
No. of JPSB shares
%
Soh Chooi Lai
399,999
100
Chow Lai Goh
1
*
400,000
100
Total
*
negligible
The principal activity of JPSB is real estate investment and property development.
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IVORY PROPERTIES GROUP BERHAD (673211-M)
PROPOSED DISPOSAL OF LAND BY IVORY INDAH SDN BHD, A WHOLLY-OWNED SUBSIDIARY OF IVORY PROPERTIES
GROUP BERHAD FOR A TOTAL CONSIDERATION OF RM150,000,000
2.3
Information on the Property
The Property is a freehold land measuring approximately 217,771.1156 square metre located
in Penang and held under Lot No. 2838 Geran No. Hakmilik 1272, Mukim 18, Daerah Timor
Laut, Negeri Pulau Pinang.
The Property is presently charged to CIMB Islamic Bank Berhad. (“CIMB”) to secure the
banking facilities granted by CIMB (hereinafter referred to as “the Vendor’s Financier”) to IISB.
There are 3 Court Orders presented on the Property bearing Presentation Nos.
0799B2013011982, 0799B2013011985 and 0799B2013011988.
The Property shall be disposed free from all charges, encumbrances, Caveat(s) and Prohibitory
Order(s) or other legal impediments with vacant possession but otherwise subject to all
conditions of title whether expressed or implied contained in the document of title to the
Property and to the conditions and restrictions in the SPA and those as implied by the National
Land Code, 1965.
The Property was acquired by IISB on 6 August 2007 with the title duly transferred to IISB
concluded in 2013.
The net book value of the Property is RM60,396,187 based on the audited financial statements
of IISB as at 31 December 2013 and is inclusive of land cost of RM53,000,000.
Property type
:
Vacant land and zoning for the location is
residential
Postal address
:
NA
Year of completion / age
:
NA
Tenure
:
Freehold
Land area
:
217,771.1156 sq. metres (2,344,069 sq. ft.)
Net lettable area
:
NA
Date of acquisition
:
6 August 2007
Cost of acquisition
:
RM53,000,000
Category of land use
:
Building
Existing use
:
Vacant land
Latest valuation
:
18 August 2014
Encumbrances
:
CIMB
A valuation report dated 18 August 2014 was issued by Henry Butcher Malaysia (Penang) Sdn
Bhd (“Henry Butchers”), an independent firm of professional valuers registered with The Board
of Valuers, Appraisers and Estate Agents, Malaysia.
Henry Butcher have assessed the Market Value of the Property at RM120,000,000.00, which
value has not taken into account the cost anticipated to be incurred by Ivory for acquisition of
the access land for the purpose of legal access to the Property. Ivory will commission a
valuation report in compliance with Securities Commission’s Asset Valuation Guidelines in due
course for submission to Bursa Malaysia Securities Berhad (“Bursa Securities”).
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IVORY PROPERTIES GROUP BERHAD (673211-M)
PROPOSED DISPOSAL OF LAND BY IVORY INDAH SDN BHD, A WHOLLY-OWNED SUBSIDIARY OF IVORY PROPERTIES
GROUP BERHAD FOR A TOTAL CONSIDERATION OF RM150,000,000
3.
CONSIDERATION
3.1
Basis on arriving at the Disposal Price
The Disposal Price was arrived at on a “willing buyer and willing seller” basis after having
considered the following:
3.2
(a)
Market value of the Property as issued by Henry Butchers;
(b)
Comparison of Property with similar properties that were sold recently. The
characteristics, merits, and demerits of these properties are noted and appropriate
adjustments thereof are then made to arrive at the market value of the Property; and
(c)
The cost anticipated to be incurred by Ivory for acquisition of the access land for the
purpose of legal access to the Property.
Manner of Payment
The Disposal Price is also referred to as Purchase Price particularly under this sub-section and
item 4 below and shall be settled to the Vendor by instalments in the following manner:
No.
1
Instalments Payable
Deposit
The total of 1st Deposit and 2nd Deposit
described below:
Percentage (%)
of Purchase Price
Amount (RM)
10.00%
15,000,000
(i) Ringgit
Malaysia
One
Million
(RM1,000,000.00) only paid by the
Purchaser to the Vendor prior to the
execution of this Agreement; and
0.67%
1,000,000
(ii) Ringgit Malaysia Six Million Five
Hundred Thousand (RM6,500,000.00)
only now paid by the Purchaser to the
Vendor upon its execution of this
Agreement.
4.33%
6,500,000
(a) The 1st Deposit of Ringgit Malaysia Seven
Million Five Hundred Thousand
(RM7,500,000.00) only comprising of:-
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IVORY PROPERTIES GROUP BERHAD (673211-M)
PROPOSED DISPOSAL OF LAND BY IVORY INDAH SDN BHD, A WHOLLY-OWNED SUBSIDIARY OF IVORY PROPERTIES
GROUP BERHAD FOR A TOTAL CONSIDERATION OF RM150,000,000
No.
2
Instalments Payable
Percentage (%)
of Purchase Price
Amount (RM)
(b) The 2nd Deposit of Ringgit Malaysia Seven
Million
Five
Hundred
Thousand
(RM7,500,000.00) only to be paid by the
Purchaser to the Vendor within 14 days upon
the following being complied by the Vendor:
(i) the Unconditional Date as defined below;
and
(ii) the Purchaser’s Solicitors receipt from the
Vendor’s Solicitors of the redemption
statement from the Vendor’s Financier
showing the redemption sum is less than
the Balance Purchase Price of Ringgit
Malaysia One Hundred Thirty Five
Million (RM135,000,000.00) only.
5.00%
7,500,000
Balance Purchase Price is payable within three
(3) months from the Unconditional Date,
(hereinafter referred to as the “Completion
Period”) with an extension of two (2) months
(hereinafter referred to as the “Extended
Completion Period”) subject to late payment
interest at the rate of six point five per centum
(6.5%) per annum on the unpaid portion of the
Balance Purchase Price from the expiry of the
Completion Period until the date of actual
payment during the Extended Completion
Period as the case may be.
90.00%
135,000,000
100.00%
150,000,000
Total
Salient features of the payment arrangement is more particularly described under item 4 below.
3.
SALIENT TERMS OF THE SPA
4.1
The salient terms of the SPA, as extracted from the SPA, include among others, are as set out
below. All definitions in this section shall have the same meaning as in the SPA:
(i)
Majlis Perbandaran Pulau Pinang (“MPPP”) is the registered proprietor of that property
identified as Lot No. 1877, Seksyen 2, Bandar George Town, Daerah Timor Laut, Negeri Pulau
Pinang held under Geran No. Hakmilik 20816 (hereinafter referred to as “Lot 1877”).
(ii)
The Vendor has proposed to the Pejabat Daerah Dan Tanah Daerah Timur Laut (hereinafter
referred to as “PDT”) for PDT to acquire part of Lot 1877 measuring approximately 1851.92
square metre which is delineated and shaded YELLOW in the Land Acquisition Plan attached
as Appendix 1 hereto for the purpose of legal access to the Said Property (hereinafter referred
to as the “Access Land”).
(iv)
The Vendor has made an application via a letter dated 23rd June 2014 (hereinafter referred to
as “Application”) to PDT (inter alia) enclosing payment of the Acquisition Fee and the
Acquisition Deposit to PDT for PDT to acquire the Access Land pursuant to Section 3(1)(b) of
the Land Acquisition Act 1960.
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IVORY PROPERTIES GROUP BERHAD (673211-M)
PROPOSED DISPOSAL OF LAND BY IVORY INDAH SDN BHD, A WHOLLY-OWNED SUBSIDIARY OF IVORY PROPERTIES
GROUP BERHAD FOR A TOTAL CONSIDERATION OF RM150,000,000
2.
MANNER OF PAYMENT
2.1
Provided That the Conditions Precedent under Clause 3 have been fulfilled in the manner in
accordance with such Clause 3 and subject always to Clause 11A hereof, the balance purchase
price of the sum specified in Section 8 of the First Schedule hereto (hereinafter referred to as
“the Balance Purchase Price”) shall be paid in full by the Purchaser to the Vendor’s Solicitors
within the time period or the extended time period specified in Section 9 of the First Schedule
hereto (hereinafter referred to as “the Completion Period” or “the Extended Completion
Period” as the case may be).
2.2
The date on which the Balance Purchase Price is paid within the Completion Period or the
Extended Completion Period shall hereinafter be referred to as “the Completion Date”.
3.
CONDITIONS PRECEDENT
3.1
This Agreement shall be conditional upon the fulfilment of the following conditions precedent
(hereinafter collectively referred to as “the Conditions Precedent”) within nine (9) months
from the date of this Agreement (the said period of 9 months is hereinafter referred to as“the
Conditional Period”):(i)
(ii)
the Application to PDT for PDT to acquire the Access Land as legal access to the Said
Property is completed as evidenced by:(a)
the Vendor’s receipt of the confirmation/acceptance letter from PDT
requesting for payment of the balance of the Acquisition Price and the Vendor
making payment of the said sum to PDT. In this respect, the Vendor shall
produce to the Purchaser’s Solicitors evidence of such payment made to the
PDT and upon such production, this condition shall be deemed to have been
complied by the Vendor; and
(b)
all condition(s) imposed by the State Authority (including but not limited to
the payment of consideration of the Access Land) have been fulfilled and
complied by the Vendor and this condition shall be deemed satisfied by the
Vendor upon the issuance of a written confirmation by a professional
Surveyor mutually appointed by the Vendor and the Purchaser confirming
that the Application to PDT for PDT to acquire the Access Land as the legal
access to the Said Property is completed and validly secured for the purpose
of the development of the Said Property and all condition(s) imposed by the
State Authority (including but not limited to the payment of consideration of
the Access Land) have been fulfilled and complied by the Vendor.
The Civil Suit is settled out of court or a court order is obtained in favour of the Vendor
in relation to the injunction sought by IB Capital Sdn. Bhd. and IB Capital Sdn. Bhd.
did not appeal or the appeal period allowed has lapsed and upon the delivery to the
Purchaser’s Solicitors of a sealed copy of the Consent Judgement if the Civil Suit is
settled out of Court or if there is no such settlement, upon the expiry of the appeal
period with no appeal filed by IB Capital Sdn. Bhd. after the court order has been
obtained in favour of the Vendor, this condition shall be deemed to have been complied
with by the Vendor; and
The Vendor (being a wholly owned subsidiary of a listed company, Ivory Properties
Group Bhd.) has obtained the approval of the shareholders of Ivory Properties Group
Bhd. for the sale of the Said Property by the Vendor to the Purchaser and upon the
delivery to the Purchaser’s Solicitors of a certified true copy of the resolutions passed
by the shareholders approving the same, this condition shall be deemed to have been
complied with by the Vendor.
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IVORY PROPERTIES GROUP BERHAD (673211-M)
PROPOSED DISPOSAL OF LAND BY IVORY INDAH SDN BHD, A WHOLLY-OWNED SUBSIDIARY OF IVORY PROPERTIES
GROUP BERHAD FOR A TOTAL CONSIDERATION OF RM150,000,000
3.2
Notwithstanding the foregoing provision of this Clause 3 or anything to the contrary contained
herein, in the event any other restraining order or injunctive relief or any further
encumbrances(s) caveat(s), Prohibitory Order(s) or other legal impediments, other than as
disclosed in this Agreement (hereinafter referred to as “Other Impediment(s)”) is obtained
against the Vendor which affects the Said Property or is made against the Said Property:(a)
after the date of this Agreement but before the expiry of the Conditional Period or the
Extended Conditional Period (as defined hereinafter), as the case may be; or
(b)
after the expiry of the Conditional Period or the Extended Conditional Period (as
defined hereinafter), as the case may be, but before the Completion Date,
the parties hereto hereby expressly agree that the Other Impediment(s) shall be deemed one of
the Conditions Precedent under Clause 3.1 and be fulfilled in accordance with Clause 3.1(ii)
or (iii) hereof provided that if the time period for compliance of such condition within the
Conditional Period or the Extended Conditional Period (as defined hereinafter) is less than six
(6) months, the parties hereto hereby expressly agree that the time period for satisfaction of
such condition shall instead be within six (6) months from the date of the Vendor being notified
in writing of the Other Impediment(s) and notwithstanding the same, for the purpose of this
Agreement, such time period of six (6) months shall also be referred to as “the Conditional
Period”.
For avoidance of doubt, it is hereby agreed that the payment of the Balance Purchase Price due
under Clause 2 herein is suspended until the Other Impediment(s) being the Condition
Precedent has been fulfilled in accordance with Clause 3.1(ii) or (iii) hereof and the
Unconditional Date (as defined hereinafter) is triggered.
3.3
In the event that any or all the Conditions Precedent is/are not fulfilled/satisfied on the last day
of the Conditional Period, the said period shall be extended automatically for a period of three
(3) months upon the expiry of the Conditional Period. Such extended period shall be referred
to as the Extended Conditional Period.
3.4
In the event that any or all of the Conditions Precedent is/are not fulfilled/satisfied on the expiry
of the Extended Conditional Period, the Purchaser shall have the option to either:(a)
accept such of the Condition(s) Precedent which has/have not been fulfilled/satisfied,
in which event such Condition(s) Precedent shall be deemed fulfilled by the Vendor and
the Purchaser shall continue with and complete the purchase of the Said Property by
the Completion Date in accordance with the terms hereof; or
(b)
terminate this Agreement, in which event the Purchaser shall forthwith return and
procure the Purchaser’s Solicitors and/or the Purchaser’s Financier and/or the
Purchaser Financier’s Solicitors, to forthwith return to the Vendor all relevant and
available documents given to any of them by the Vendor or the Vendor’s Solicitors with
the Vendor’s interest intact and to forthwith execute documents for the
withdrawal/removable of any private caveat and encumbrances lodged by or
attributable to the Purchaser and/or the Purchaser’s Financier or any other persons
claiming under or through any of them against the Said Property and in returning such
documents in exchange for the refund of the 1st Deposit together with interest computed
at three percent (3%) per annum on the sum of the 1 st Deposit (hereinafter referred to
as “the Interest”) and thereafter, neither Party shall have any claim nor action
whatsoever against the other under or arising from this Agreement.
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IVORY PROPERTIES GROUP BERHAD (673211-M)
PROPOSED DISPOSAL OF LAND BY IVORY INDAH SDN BHD, A WHOLLY-OWNED SUBSIDIARY OF IVORY PROPERTIES
GROUP BERHAD FOR A TOTAL CONSIDERATION OF RM150,000,000
3.5
4.
The date the last of the Conditions Precedent is fulfilled in accordance with Clause 3.1 or
Clause 3.2 or is deemed to have been fulfilled in accordance with Clause 3.4(a) within the
Conditional Period or the Extended Conditional Period, as the case may be shall be referred to
as “the Unconditional Date” in this Agreement and this Agreement shall become unconditional
on the Unconditional Date.
RATIONALE FOR THE PROPOSED DISPOSAL
The Proposed Disposal will enable Ivory Group to unlock the value of the Property which is not
generating any income for the Group presently, raise funds for the working capital requirements
and to settle its bank borrowings from CIMB which is anticipated to strengthen Ivory Group’s
financial position to seek for other potential investment and facilitate any expansion plan for its
current business activities.
5.
FINANCIAL EFFECTS OF THE PROPOSED DISPOSAL
5.1
Share Capital and Substantial Shareholders’ Shareholding
The Proposed Disposal will not have any effect on the issued and paid-up share capital of Ivory
and the substantial shareholders’ shareholding in Ivory.
5.2
Earnings and earnings per share
The Disposal will result in a gain on disposal of about RM38 million or 8.53 sen per share to
the Group.
5.3
Net Assets and Gearing
The Proposed Disposal is expected to have no material effects on the net assets of Ivory Group
save for a gain on disposal as mentioned above. The Group’s finance costs will be reduced
due to the utilisation of the proceeds raised from the Proposed Disposal for the repayment of
bank borrowings and the gearing ratio is expected to be further improved accordingly.
6.
THE PERCENTAGE RATIO APPLICABLE TO THE TRANSACTION PURSUANT TO
PARAGRAPH 10.02(g)
The highest percentage ratio applicable to the Proposed Disposal pursuant to Paragraph
10.02(g) of the Main Market Listing Requirements of Bursa Securities is 39.58%.
7.
LIABILITIES TO BE ASSUMED BY THE PURCHASER
There is no liability to be assumed by the Purchaser pursuant to the Proposed Disposal.
8.
CASH COMPANY OR PRACTICE NOTE 17 (“PN17”) COMPANY
The Proposed Disposal is not expected to result in the Company becoming a cash company or
PN17 company.
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IVORY PROPERTIES GROUP BERHAD (673211-M)
PROPOSED DISPOSAL OF LAND BY IVORY INDAH SDN BHD, A WHOLLY-OWNED SUBSIDIARY OF IVORY PROPERTIES
GROUP BERHAD FOR A TOTAL CONSIDERATION OF RM150,000,000
9.
ESTIMATED TIME FRAME FOR COMPLETION
The applications to the relevant authorities are expected to be made within the expected time
frame from the date of this announcement. Barring any unforeseen circumstances and subject
to the fulfilment of all conditions precedent as set out in the Agreement, the Board expects the
Proposed Disposal to be completed by December 2016.
10.
PROPOSED UTILISATION OF PROCEEDS FROM THE PROPOSED DISPOSAL
The proceeds arising from the Proposed Disposal shall be utilized to retire bank borrowings to
CIMB as well as for working capital of the Group after paying all incidental costs to be incurred
in connection with the Proposed Disposal. It is expected that the proceeds arising from the
Proposed Disposal shall be fully utilized within twelve (12) months from the date of receipt of
the full amount of Purchase Price. However, the Company has yet to determine the proportion
of the proceeds to be used for settlement of bank borrowings and working capital at this
juncture.
11.
APPROVAL REQUIRED
The Proposed Disposal is subject to the following approvals being obtained:
12.
(i)
Shareholders of Ivory at an Extraordinary General Meeting to be convened; and
(ii)
Any other relevant authorities/parties, as required.
INTEREST OF THE DIRECTORS AND MAJOR SHAREHOLDERS AND PERSONS
CONNECTED TO THEM
None of the Directors and or major shareholders, persons connected to Directors or persons
connected to the major shareholders of the Company and of the Group has any interest, direct
or indirect, in the Proposed Disposal.
13.
STATEMENT BY THE BOARD
The Board of Directors is of the opinion that, as the Proposed Disposal is established under
normal commercial terms, it is in the best interest of the Group and not to the detriment of the
minority shareholders of the Company.
14.
RISK FACTORS
There are no foreseeable risk factors involved in the Proposed Disposal save as below and the
Proposed Disposal is not expected to change the risk profile of Ivory Group.
If any of the conditions precedent of the SPA is not fulfilled or not waived by the respective
parties, including the failure to secure the approval from the shareholders of the Company or
the relevant authorities within the period of time set out in the SPA, the Proposed Disposal may
delayed or terminated.
The management of the Company shall use its best endeavours to ensure every effort is made
to satisfy the conditions precedent amongst others, to obtain the approval from the
shareholders of the Company for the Proposed Disposal in a timely manner.
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IVORY PROPERTIES GROUP BERHAD (673211-M)
PROPOSED DISPOSAL OF LAND BY IVORY INDAH SDN BHD, A WHOLLY-OWNED SUBSIDIARY OF IVORY PROPERTIES
GROUP BERHAD FOR A TOTAL CONSIDERATION OF RM150,000,000
15.
DOCUMENTS FOR INSPECTION
The Agreement will be made available for inspection at the Registered Office of the Company
at Suite 16-1 (Penthouse Upper), Menara Penang Garden, 42A Jalan Sultan Ahmad Shah
10050 Penang during normal working hours from Mondays to Fridays (except public holidays)
for a period of three (3) months from the date of this announcement.
This announcement is dated 14 January 2015.
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