Announcement Details :
1. INTRODUCTION
The Board of Directors of Talam wishes to announce that its subsidiary, Europlus Corporation Sdn Bhd (Company No. 212846-A) (“ECSB”), has on 26 May 2009 entered into a Sale and Purchase Agreement (“S&P Agreement”) with TA First Credit Sdn Bhd (Company No. 29009-A) having its registered address at 34th Floor, Menara TA One, 22 Jalan P. Ramlee, 50250 Kuala Lumpur (“TAFC”) to dispose a piece of vacant commercial land in Bukit Beruntung Zone 9 held under title no. Geran 54344, Lot 15207, Bandar Serendah, Daerah Ulu Selangor, Negeri Selangor Darul Ehsan measuring approximately 73.61 acres in area (“Sale Land”) to TAFC, at a total purchase consideration of RM44,890,322.40 (“Proposed Disposal”).
2. DETAILS OF THE PROPOSED DISPOSAL
2.1 Information on the Sale Land
The Sale Land is located in Bukit Beruntung Zone 9 held under title no. Geran 54344, Lot 15207, Bandar Serendah, Daerah Ulu Selangor, Negeri Selangor Darul Ehsan measuring approximately 78.70 acres in area inclusive of Tenaga Nasional Berhad (“TNB”) reserve measuring 5.09 acres.
2.2 Tenure and Category of the Land Use
The tenure of the Sale Land is commercial freehold land.
2.3 Basis of determining the total purchase consideration
The total purchase consideration of RM44,890,322.40 for the Proposed Disposal was arrived on a “willing seller and willing buyer” basis and based on RM14.00 per square foot.
The net book value of the Sale Land based on the last consolidated audited accounts of Talam as at 31 January 2008 is RM44.0 million. The original cost of investment of the Sale Land is RM14.22 million.
2.4 Salient Terms of the Proposed Disposal
The salient terms of the Proposed Disposal as set out in the S&P Agreement are inter-alia as follows:-
2.4.1 Sale and Purchase
ECSB agrees to sell and TAFC agrees to purchase the Sale Land on as is where is basis save and except that ECSB to provide the main infrastructure namely, water reservoir, sewerage treatment plant and reserve land for TNB main intake station, free from all encumbrances and charges at the total consideration of RM44,890,322.40 (“Purchase Price”), subject to all conditions of title, restrictions-in-interest whether express or implied affecting the same and the terms and conditions contained in the S&P Agreement.
2.4.2 Purchase Price and Mode of Payment
TAFC shall pay the Purchase Price to ECSB upon the expiration of 14 days from the date of presentation of the title documents together with the Memorandum of Transfer at the appropriate Land Office/Registry for Registration. TAFC and ECSB expressly agree that the Purchase Price shall be remitted directly by TAFC towards satisfaction of the outstanding sum due and payable by Maxisegar Realty Sdn Bhd (“Maxisegar Realty”), a wholly-owned subsidiary of Talam to TAFC.
2.4.3 Conditions Precedent
The S&P Agreement is conditional upon inter-alia the following:-
(i) the procurement of the approval of the Foreign Investment Committee (“FIC”) within 6 months from the date of the S&P Agreement (“CP Period”) or another three (3) months from the expiry of the CP Period (“Extended CP Period”); and
(ii) the receipt by TAFC or the TAFC’s solicitors the Original Issue Document of Title to the Sale Land, the valid and registrable Discharge of Charge and the Withdrawal of the Private Caveat duly executed by the Caveator within one (1) month from the date of the S&P Agreement or such other period to be mutually agreed by TAFC and ECSB.
3. INFORMATION ON ECSB
ECSB was incorporated on 21 February 1991 under the Companies Act, 1965 with its registered office at Suite 2.05, Level 2, Menara Maxisegar, Jalan Pandan Indah 4/2, Pandan Indah, 55100 Kuala Lumpur.
The authorized share capital is RM200,000,000 divided into 50,000,000 ordinary shares of RM1.00 each, 50,000,000 5% Cumulative Redeemable Preference Shares of RM1.00 each, 50,000,000 5% Non-Cumulative Redeemable Preference Shares of RM1.00 each and 50,000,000 5% Non-Cumulative Irredeemable Preference Shares of RM1.00 each.
The issued and paid-up capital of ECSB is RM55,000,000 divided into 1,975,000 ordinary shares of RM1.00 each, 50,000,0005% Non-Cumulative Redeemable Preference Shares of RM1.00 each and 3,025,000 5% Non-Cumulative Irredeemable Preference Shares of RM1.00 each.
The principal activities of ECSB are property development, investment holding and construction activities.
4. LIABILITIES TO BE ASSUMED
To the best knowledge of Talam, there are no liabilities to be assumed by TAFC arising from the Proposed Disposal as the Sale Land shall be acquired free from encumbrances and on “as is where is basis”.
5. UTILISATION OF SALE PROCEEDS
The sale proceeds generated from the Proposed Disposal will be utilized to pare down part of the interest and principal to the loan facility granted by TAFC to Maxisegar Realty (“Loan Facility”).
6. APPROVALS
The Proposed Disposal is conditional upon the procurement of the approval of the Foreign Investment Committee (“FIC”) within the CP Period or Extended CP Period.
The Proposed Disposal is not subject to the approval of Talam’s shareholders and is not subject to other approvals save and except for the approval mentioned above.
7. RATIONALE FOR THE PROPOSED DISPOSAL
The Proposed Disposal will assist Talam Group to reduce its bank borrowings and hence, reduce interest costs.
8. FINANCIAL EFFECT
8.1 Share Capital and Substantial Shareholders’ Shareholding
The Proposed Disposal will not have any effect on the issued and paid-up share capital of Talam and the shareholding of its substantial shareholders.
8.2 Net Assets (“NA”) and Earnings
The Proposed Disposal is not expected to have any material effect on the NA and earnings per share of Talam Group for the year ending 31 January 2010.
8.3 Gearing
The effect of the Proposed Disposal on the gearing ratio of the Company based on its audited consolidated financial statements for year ended 31 January 2008 is expected to be as follows:-
 | Audited as at 31 January 2008 | After the Proposed Disposal |
| Gearing Ratio (times) | 2.37 | 2.32 |
There will not be any expected significant gain or loss arising from the Proposed Disposal.
9. ESTIMATED TIME FRAME FOR COMPLETION
The Proposed Disposal is expected to be completed within 6 months from the date of signing of the S&P Agreement.
10. DEPARTURE FROM THE COMMISSION’S POLICIES AND GUIDELINES ON ISSUE/OFFER OF SECURITIES (SC’S GUIDELINES”)
Talam is not aware of any departure from SC’s Guidelines in respect of the Proposed Disposal.
11. DIRECTORS’ RECOMMENDATION
The Directors of Talam, after taking into consideration of all financial and other factors, is of opinion that the Proposed Disposal is in the best interest of Talam.
12. DIRECTORS AND MAJOR SHAREHOLDERS’ INTEREST
None of the directors and/or the major shareholders of Talam and/or persons connected with a director or major shareholders have any interest, direct or indirect in the Proposed Disposal save and except for Mr U Chin Wei who is an Independent Non Executive Director of Kumpulan Europlus Berhad, a major shareholder of the Company and is also an Independent Non Executive Director of TAFC.
13. DOCUMENTS FOR INSPECTION
The S&P Agreement is available for inspection at the registered office of the Company at Suite 2.05, Level 2, Menara Maxisegar, Jalan Pandan Indah 4/2, Pandan Indah, 55100 Kuala Lumpur between 9.00 a.m. and 5.00 p.m. from Monday to Friday (except public holidays) for a period of one (1) month from the date of this announcement.
This announcement is dated 27 May 2009.
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