Notion (Thailand) Factory affected by Floods

TURBO-MECH BERHAD (“TURBO” OR “THE COMPANY”)
OPTION AGREEMENT BETWEEN WELL TRANSPORT AND GENERAL
CONTRACTORS PTE LTD AND TURBO-MECH ASIA PTE LTD, A WHOLLYOWNED SUBSIDIARY OF THE COMPANY
1.
INTRODUCTION
Reference is made to the announcements made on 7 January 2015 and 9 January 2015 on
the above matter. The Board of Directors of Turbo wishes to announce that Turbo-Mech
Asia Pte Ltd (“TMA”), a wholly-owned subsidiary of Turbo, had on 3 December 2014
entered into an Option to Purchase with Well Transport And General Contractors Pte Ltd
(Company Registration No. 199102830N) (“Well Transport”) for the purchase of
property situated at 22 Joo Koon Circle Singapore 629054 (referred to as “Property”) for
a purchase consideration of SGD8,100,000 only (exclusive of GST), upon such terms and
conditions as stated in the Option to Purchase (“Proposed Acquisition”).
Subsequent to the Proposed Acquisition, the Property will be used as a workshop.
2.
INFORMATION
2.1
Information on TMA
Turbo-Mech Asia Pte Ltd was established as a supplier of rotating equipment
including centrifugal pumps, metering pumps, high pressure gas compressors,
high pressure pumps, non-seal pumps, steam turbines, industrial cooling fans
and spare parts and a provider of maintenance, repair and overhaul services for
rotating equipment. The directors of the company are Gan Ching Lai, Gan Kok
Ten, and Tay Hwee Leck. It is a wholly-owned subsidiary of Turbo-Mech Berhad.
2.2
Information on Well Transport
Well Transport is a private limited liability company incorporated and domiciled
in Republic of Singapore. The principal activity of the company is that of process
engineering and transportation services. The issued and paid-up share capital of
Well Transport is SGD75,000 divided into 75,000 ordinary shares of SGD1 each.
The directors of the company are Lee Siew Hoon, Lee Beng Chye, Ng Swee Chye
and Lee Siew Tee.
1
Turbo-Mech Berhad (Company No. 863263-D)
- Proposed acquisition of property by Turbo-Mech Asia Pte Ltd, a wholly-owned subsidiary of the Company
3.
DETAILS OF THE PROPOSED ACQUISITION
3.1
Details of the Property
Location
Tenure
Lease Duration
Commencement date
Land area
Category of Land Use
Buildings Build Up Area
Age of building
Express Conditions
Restriction-in-Interest
Encumbrances/Restraint of
dealings
Existing use
3.2
:
:
:
:
:
:
:
:
:
:
:
22 Joo Koon Circle, Singapore 629054
Leasehold estate
30 years
1 May 2008
3670.1sqm
Workshop / Factory
24,973 sqft
36 years
None
None
None
: Process Engineering and transportation
services
Salient Details of the Option to Purchase
i)
ii)
iii)
iv)
v)
TMA has signed the Option to Purchase on 3 December 2014 and paid to
Well Transport (“vendor”) the option money of SGD81,000 on 27
November 2014 for the Proposed Acquisition at a purchase price of
SGD8,100,000.
On 5 January 2015, TMA has made payment of SGD324,000 in favor of
Well Transport. The SGD324,000 together with the option money of
SGD81,000 constituted the “Deposit” for the Proposed Acquisition.
On 5 January 2015, Well Transport has granted to TMA an extension of
conditions where:
a) In the event that TMA fails to exercise the Option to Purchase by 4.00
pm on 31 March 2015, the full sum of 5% of the Purchase Price
represented by the Deposit shall be forfeited from the option money;
and
b) In the event the Option to Purchase is exercised, but the JTC
Corporation’s approval is not obtained for the purchase, then the
option money, representing of 1% of the Purchase Price shall be
forfeited. The balance of the Deposit, amounting to SGD324,000 shall
be refunded to TMA.
The sale is with vacant possession to be given on completion/subject to
existing tenancy if it is subsisting as at completion.
The Property is sold on an “as it where is” basis and the Purchaser is
deemed to have full knowledge and notice of the actual state and condition
of the Property as regards access, repair, light, air and in all other respects
and the Purchaser shall not raise or make any objections or requisitions in
respect of the same.
2
Turbo-Mech Berhad (Company No. 863263-D)
- Proposed acquisition of property by Turbo-Mech Asia Pte Ltd, a wholly-owned subsidiary of the Company
vi)
4.
The sale and purchase shall be subject to the Purchaser’s solicitors
receiving satisfactory replies to all their requisitions to the various
government departments and the Land Transport Authority and in the
event of any of the replies to such requisitions being unsatisfactory, the
Purchaser may annul the Agreement arising out of his acceptance of this
Option in the manner provided in the Agreement.
BASIS OF DETERMINING THE PURCHASE CONSIDERATION
The purchase price of SGD8,100,000 was arrived on a ‘willing buyer willing seller’ basis
after taking into consideration on the market information obtained for the price of
properties within vicinity and after taking into consideration existing category of property
use. A valuation will be conducted and the valuation report would be made available for
inspection in due course.
5.
ORIGINAL COST OF INVESTMENT
Well Transport is a private limited company and is not prepared to disclose the
information on the original cost of investment, date of such investment and net book
value of the Property.
6.
SOURCE OF FUNDING
The Company intends to finance the Purchase Price through a combination of bank
borrowings (approximately 60%) and from the Company’s internally generated funds
(approximately 40%).
7.
ASSUMPTION OF LIABILITIES
Except for the bank borrowings to be obtained to finance the Proposed Acquisition, there
are no contingent liabilities and guarantees to be assumed by TMA arising from the
Proposed Acquisition.
3
Turbo-Mech Berhad (Company No. 863263-D)
- Proposed acquisition of property by Turbo-Mech Asia Pte Ltd, a wholly-owned subsidiary of the Company
8.
RATIONALE AND PROSPECT
The Proposed Acquisition would allow Turbo to expand its current workshop capacity to
accommodate customers’ demand. The increased capacity will enable us to provide better
service to existing customer and attract more potential customers. The workshop is going
to provide scheduled maintenance and overhaul services for pumps, compressors,
industrial cooling fans, steam turbines and other industrial equipment. Scheduled
maintenance and overhaul are important service for preventing or minimising operation
downtime due to machine and equipment failure. With the increase of workshop capacity,
we will able to service more customers at the same period.
The Board is of the view that the Proposed Acquisition provides an excellent and timely
opportunity for the efficient deployment of the Group’s surplus financial resources in
order to achieve a better return for its shareholders in the long term.
9.
RISK FACTORS
The economic value of the Property is subject to the risks inherent in the property market.
These include inter-alia changes in general economics, business and credit conditions and
demand for properties.
The Board of Directors of Turbo does not foresee any other significant risks arising from
the Proposed Acquisition as the Property is used for Turbo’s business activities.
10.
EFFECTS OF THE ACQUISITION
10.1
Share Capital
The Proposed Acquisition does not have any effect on the issued and paid-up
share capital of the Company.
10.2
Substantial Shareholders’ Shareholdings
The Proposed Acquisition does not have any effect on the substantial
shareholders’ shareholdings in the Company.
10.3
Net Assets per Share and Gearing
The Proposed Acquisition does not have any material effect on the net assets per
share in the Company.
The proforma effect of the Proposed Acquisition on the gearing of the Turbo
Group based on its audited consolidated financial statements for the financial year
ended 31 December 2013 is as follows:
4
Turbo-Mech Berhad (Company No. 863263-D)
- Proposed acquisition of property by Turbo-Mech Asia Pte Ltd, a wholly-owned subsidiary of the Company
Audited as at 31
December 2013
RM’000
After the Proposed
Acquisition
RM’000
Shareholders’ funds
75,680
75,680
Total borrowings
0
12,900
Gearing ratio (times)
0
0.17*
Note:
*It is based on assumption of bank borrowing of 60% on purchase consideration
to be taken to fund the acquisition. Total borrowings amount was not yet
concluded and it is subject to internal fund available maximum allowable of loan
limits and the proposed interest rate.
10.4
Earnings per Share
The Proposed Acquisition is not expected to have any material impact on the
earnings per share of Turbo Group for the financial year ended 31 December 2014
and financial year ending 31 December 2015.
11.
DIRECTORS’ AND MAJOR SHAREHOLDERS’ INTEREST
None of the Directors and/or major shareholders and/or persons connected with them
have any interest, direct or indirect, in the Proposed Acquisition.
12.
STATEMENT BY BOARD OF DIRECTORS
The Directors of Turbo, having considered all aspects of the Proposed Acquisition, is of
the opinion that the Proposed Acquisition is fair and reasonable and is in the best interests
of Turbo and its subsidiaries.
13.
HIGHEST PERCENTAGE RATIO
The highest percentage ratio applicable to the Proposed Acquisition pursuant to
Paragraph 10.02(g) of the Main Market Listing Requirements of Bursa Malaysia
Securities Berhad is 28% based on the latest audited financial statements of the Company
as at 31 December 2013.
5
Turbo-Mech Berhad (Company No. 863263-D)
- Proposed acquisition of property by Turbo-Mech Asia Pte Ltd, a wholly-owned subsidiary of the Company
14.
APPROVALS REQUIRED
In the event the Option Agreement is exercised, the Proposed Acquisition is subject to the
approval of shareholders of Turbo and Extraordinary General Meeting to be convened as
well as approval from Singapore governmental authority, JTC Corporation. JTC
Corporation formerly the Jurong Town Corporation which was set up on 1 June 1968
under the Jurong Town Corporation Act to take over from Economic Development Board
as Singapore's principal developer and manager of industrial estates and their related
facilities. JTC Corporation is a statutory board under the Ministry of Trade and Industry,
managing a wide range of Facilities such as industrial land and business parks to meet
diverse industrial needs of companies based in Singapore.
15.
ESTIMATED TIME FRAME FOR COMPLETION
The Proposed Acquisition is expected to be completed before 15 May 2015.
16.
DOCUMENTS FOR INSPECTION
The Option to Purchase dated 3 December 2014 is available for inspection at the
registered office of Turbo at Lot 6.05, Level 6, KPMG Tower, 8, First Avenue, Bandar
Utama, 47800 Petaling Jaya, Selangor Darul Ehsan during normal business hours on
Mondays to Fridays (except public holidays) for a period of three (3) months from the
date of this announcement.
This announcement is dated 15 January 2015.
6

Download Report