Announcement Details : On behalf of the Company, RHB Investment Bank Berhad (“RHB Investment Bank”) wishes to announce that the Securities Commission ("SC") had, vide its letter dated 29 April 2008 (which was received on 30 April 2008), approved the Proposed Revised Regularisation Plan based on the following terms:
(i) proposed reduction in the share capital of the Company pursuant to Section 64(1)(b) of the Companies Act 1965 (“Act”) involving the cancellation of RM0.40 of the par value of each existing ordinary share of RM1.00 each in Talam (“Proposed Capital Reduction”);
(ii) proposed reduction of Talam’s entire share premium account pursuant to Sections 60(2) and 64(1)(b) of the Act amounting to RM124,551,076.73 (based on the unaudited balance sheet of Talam as at 31 January 2007) and the credit arising therefrom to be set-off against the accumulated losses of Talam;
(iii) proposed share split involving the subdivision of every 1 existing ordinary share of RM0.60 each in Talam after the Proposed Capital Reduction into 3 ordinary shares of RM0.20 each;
(iv) proposed restructuring and settlement of debts due and owing to the lenders of the Talam group of companies (“Group”), which involves, inter-alia, the:
(a) proposed issuance of RM257,402,000 nominal value of zero dividend 5-year redeemable convertible preference shares (“RCPS”) comprising 1,287,010,000 units of RCPS at RM0.20 each;
(b) proposed issuance of up to a total of RM356,250,581 nominal value of 4 classes of zero coupon 5-year redeemable convertible secured loan stocks (“RCSLS”) i.e. RCSLS-A, RCSLS-B, RCSLS-C and RCSLS-D, at 100% of their nominal values. An additional RM2,000 nominal value of RCSLS will be issued for each of RCSLS-B, RCSLS-C and RCSLS-D to selected investors to facilitate the listing of RCSLS-B, RCSLS-C and RCSLS-D on the Main Board of Bursa Malaysia Securities Berhad; and
(c) proposed issuance of up to RM134,213,337 nominal value of 10-year Al-Bai Bithaman Ajil Islamic Debt Securities (“Settlement BaIDS”) at 100% of its nominal value; and
(v) proposed assumption by Talam of the indebtedness from Ambang Sentosa Sdn Bhd in respect of the outstanding Asset-Backed Al-Bai Bithaman Ajil Islamic Debt Securities;
subject to, inter-alia, the following conditions:
(i) nominees of IJM Corporation Berhad on the Board of Directors (“Board”) of Talam to be appointed as Executive Directors of Talam;
(ii) further equity condition may be imposed on Talam after reviewing its equity structure 3 years from the date of implementation of the proposed restructuring scheme. In this respect, RHB Investment Bank/Talam is required to submit the effective equity structure of Talam 3 years after the date of completion of the proposed restructuring scheme, together with the latest audited financial accounts of Talam;
(iii) applications for approval or notification, where applicable, be made under the Foreign Investment Committee (“FIC”) Guidelines on the "Acquisition of Properties by Local and Foreign Interests" for the transactions under the proposed divestment programme of the Group's assets to the FIC Secretariat;
(iv) RHB Investment Bank and Talam to obtain the SC's prior approval should there be any changes to the terms and conditions of the RCSLS and Settlement BaIDS;
(v) in relation to the non-investment grade rating assigned to the RCSLS and Settlement BaIDS, RHB Investment Bank and Talam are to ensure that the extent of credit risk be disclosed to the investors and/or potential investors and their advisers for the purpose of evaluating the risks relating to the RCSLS and Settlement BaIDS;
(vi) RHB Investment Bank to fully disclose to all prospective investors and relevant parties the following conflict and potential conflict of interest:
(a) arising from the role undertaken by RHB Investment Bank in the Proposed Revised Regularisation Plan; and
(b) all other conflict and potential conflict of interest arising from the Proposed Revised Regularisation Plan;
together with relevant mitigating measures. RHB Investment Bank to also inform all prospective investors that the Board of Talam is fully informed of and aware of the conflict and potential conflict of interest situations and is agreeable to proceed with the present arrangement;
(vii) RHB Investment Bank to ensure that the selling restriction imposed on the RCSLS-A and Settlement BaIDS are fully disclosed to all prospective investors and relevant parties, including making such information available on the Fully Automated System for Issuing/Tendering (FAST);
(viii) Talam shall obtain all necessary approvals from all relevant parties in relation to the proposed RCSLS and Settlement BaIDS issues and RHB Investment Bank is to submit a written confirmation on the same to the SC prior to the issue date of the RCSLS and Settlement BaIDS;
(ix) RHB Investment Bank and Talam to disclose in writing to potential investors that each RCSLS and Settlement BaIDS issue will carry different risks and all potential investors are strongly encouraged to evaluate each RCSLS and Settlement BaIDS issue on its own merit;
(x) RHB Investment Bank is required to remind all relevant parties including Talam of the need to observe and fully comply with all statutory requirements, in particular, those set out in Division 4 of Part VI of the Capital Markets & Services Act 2007;
(xi) RHB Investment Bank and Talam must fully comply with the relevant requirements relating to the implementation of the proposals as stipulated in the Policies and Guidelines on Issue/Offer of Securities; and
(xii) RHB Investment Bank and Talam to inform the SC upon completion of the Proposed Revised Regularisation Plan.
The SC had also vide the above said letter approved the Proposed Revised Regularisation Plan under the Guidelines on the Acquisition of Interests, Mergers and Take-Overs by Local and Foreign Interests issued by the FIC. In this connection, the effect of the Proposed Revised Regularisation Plan on the equity structure of Talam is as follows:
This announcement is dated 2 May 2008.
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