The Warehouse and the Land are collectively referred to as the ( Property )

ANNOUNCEMENT PHARMANIAGA BERHAD (“PHARMANIAGA” OR THE “COMPANY”) PROPOSED ACQUISITION OF LEASEHOLD PROPERTY COMPRISING A WAREHOUSE AND OFFICE AT NO. 1...
45 downloads 0 Views 32KB Size
ANNOUNCEMENT PHARMANIAGA BERHAD (“PHARMANIAGA” OR THE “COMPANY”) PROPOSED ACQUISITION OF LEASEHOLD PROPERTY COMPRISING A WAREHOUSE AND OFFICE AT NO. 11 JALAN RAGUM 15/17, SEKSYEN 15, 40200 SHAH ALAM, SELANGOR BY PHARMANIAGA LOGISTICS SDN BHD (“PLSB”), A WHOLLY-OWNED SUBSIDIARY OF THE COMPANY, FROM BOUSTEAD CURVE SDN BHD (“BCSB”) FOR A TOTAL PURCHASE CONSIDERATION OF RM23.32 MILLION, INCLUDING 6% GOODS AND SERVICES TAX (“PROPOSED ACQUISITION”)

1.

INTRODUCTION The Board of Directors of Pharmaniaga (“Board”) wishes to announce that Pharmaniaga Logistics Sdn Bhd (“PLSB” or “Purchaser”), a wholly-owned subsidiary of Pharmaniaga Berhad (“Pharmaniaga”) had on 10 June 2015 entered into a sale and purchase agreement (“SPA”) with Boustead Curve Sdn Bhd (“BCSB” or “Vendor”) in relation to the Proposed Acquisition. BCSB is a wholly-owned subsidiary of Boustead Properties Berhad. Boustead Properties Berhad is in turn a wholly-owned subsidiary of Boustead Holdings Berhad (“BHB”). BHB is also the holding company of Pharmaniaga. The Proposed Acquisition is a related party transaction pursuant to paragraph 10.08 of the Main Market Listing Requirements of Bursa Malaysia Securities Berhad (“Bursa Securities”) (“Listing Requirements”), further details of which are set out in Section 8 of this announcement.

2.

DETAILS OF THE PROPOSED ACQUISITION Pursuant to the SPA for the Proposed Acquisition, PLSB shall purchase from BCSB a warehouse premise (“Warehouse”) with the postal address of 11 Jalan Ragum 15/17 Section 15 40200 Shah Alam, constructed on a parcel of leasehold industrial land held under HS(D) 22385 PT 49 Seksyen 15, Bandar Shah Alam, District of Petaling, State of Selangor and measuring approximately 11,762 square metres (“Land”) for a total purchase consideration of RM23.32 million (including the Malaysian Goods and Services Tax (“GST”) of 6%) (“Purchase Consideration”). The Warehouse and the Land are collectively referred to as the (“Property”). 2.1

Information on the Property The Property is located at the north-west intersection of Federal Highway, Expressway Lingkaran Tengah (ELITE) Highway and Guthrie Corridor Expressway. The summary details of the Property are set out below: Location

:

H.S.(D) 22385, Lot PT 49, Jalan Ragum 15/17, Seksyen 15, Bandar Shah Alam, District of Petaling, Selangor Darul Ehsan.

Description

:

A single storey warehouse with a two storey office at the side.

Tenure

:

Leasehold (99 years expiring on 12 January 2086)

Age of building

:

27 years

Gross floor area

:

7,059.16 square metres

Land area

:

11,762 square metres

Category of land use

:

Industrial 1

2.2

Express conditions

:

Heavy Industry

Restriction-in-interest

:

Tanah yang diberi milik ini tidak boleh dipindah milik, dipajak atau digadai melainkan dengan kebenaran Pihak Berkuasa Negeri

Encumbrances

:

The Property is free from all encumbrances, save for the lease of an area of the Land measuring 34.84 square meters (equivalent to approximately 375 square feet) to Tenaga Nasional Berhad for the construction and operation of an electric sub-station.

Existing and proposed use

:

The Property is currently leased by PLSB to warehouse its pharmaceutical products. The Proposed Acquisition is intended to cater for the additional logistical requirements of the Pharmaniaga Group as set out in Section 3.

Registered owner

:

BCSB

Audited net book value as at 31 December 2014

:

RM4,605,147

Basis of arriving at the Purchase Consideration The Purchase Consideration was arrived at based on a willing-buyer willing-seller basis, after taking into consideration the valuation on the Property carried out by Messrs Khong & Jaafar Sdn Bhd (“KJ”), an independent firm of valuers as appointed by the Company. KJ had vide their letter dated 13 April 2015 assessed the market value of the Property at RM21,700,000.00 as at 2 April 2015, based on the Comparison and Residual methods of valuation. The Purchase Consideration (excluding GST of 6%) represents a premium of approximately 1.36% to the value ascribed by KJ to the Property. The aforesaid premium is justified after taking into consideration the various building customisations that were made to the Property during PLSB’s tenancy, which has been specifically configured for PLSB’s distribution activities.

2.3

Mode of satisfaction for the Purchase Consideration and source of funding for the Proposed Acquisition The Purchase Consideration will be satisfied by the Purchaser to the Vendor entirely via internally-generated funds.

2.4

Liabilities to be assumed There are no other liabilities, including contingent liabilities and guarantee, to be assumed by the Company and its subsidiaries (“Pharmaniaga Group”) in connection with the Proposed Acquisition.

2.5

Additional financial commitment Save for the commitment as set out in Section 2.6 below, there is no other additional financial commitment incurred / to be incurred by PLSB in relation to the Proposed Acquisition.

2.6

Salient terms of the Proposed Acquisition The salient terms of the SPA are as follows: (i)

the Property will be purchased on an as-is where-is basis free from encumbrances and with leasehold title;

2

2.7

(ii)

PLSB shall apply for and obtain the approval of the Economic Planning Unit of Malaysia for the acquisition of the Property by PLSB pursuant to the EPU Guideline on Acquisition of Properties;

(iii)

BCSB shall apply for and obtain the approval of the State Government of Selangor for the sale/transfer of the Property in favour of PLSB and shall novate the existing lease in favour of Tenaga Nasional Berhad for the substation on the Land to PLSB by way of a Novation Agreement; and

(iv)

The Purchase Consideration shall be paid by PLSB in the following manner: (a)

a sum of RM466,400 (including GST of 6%) being the earnest deposit, which has been paid by PLSB prior to the execution of the SPA for the Proposed Acquisition;

(b)

a sum of RM1,865,600 (including GST of 6%) being the balance deposit, which shall be paid by PLSB upon the execution of the SPA for the Proposed Acquisition; and

(c)

a sum of RM20,988,000 (including GST of 6%) being the remaining balance of the Purchase Consideration, which shall be paid by PLSB within 3 months from the date of the SPA.

Information on PLSB PLSB is a private limited company incorporated in Malaysia on 8 April 1993 under the Companies Act, 1965 and having its registered office at No. 7, Lorong Keluli 1B, Kawasan Perindustrian Bukit Raja Selatan, Seksyen 7, Shah Alam, Selangor Darul Ehsan. Its present authorised share capital is RM50,000,000 comprising 50,000,000 ordinary shares of RM1.00 each, of which RM40,000,000 comprising 40,000,000 ordinary shares of RM1.00 each have been issued and fully paid-up. PLSB is a wholly-owned subsidiary of Pharmaniaga and the main activities are the procurement and distribution of pharmaceutical and medical products to government hospitals and private institutions.

2.8

Information on BCSB BCSB is a private limited company incorporated in Malaysia on 23 June 1983 under the Companies Act, 1965, having its registered office at 28th Floor, Menara Boustead, No. 69, Jalan Raja Chulan, 50200 Kuala Lumpur. BCSB is a wholly-owned subsidiary of Boustead Properties Berhad through Mutiara Rini Sdn Bhd. Boustead Properties Berhad in turn is a wholly-owned subsidiary of Boustead Holdings Berhad (“BHB”). BCSB has an authorised share capital of RM150,000,000.00 consisting of 150,000,000 ordinary shares of RM1.00 each, of which all 150,000,000 ordinary shares have been issued and are fully paid-up. The principal activities of BCSB are property rental and investment.

2.9

Information on BHB BHB was incorporated in Malaysia on 25 July 1960 under the Companies Act, 1965, as a public limited company under the name of Boustead & Company (1960) Limited. The company changed its name to Boustead Holdings Limited on 18 February 1966 and to BHB on 15 April 1966. BHB has been listed on the Main Market (formerly known as Main Board) of Bursa Securities since 17 March 1961.

3

The principal activity of BHB is investment holding. The principal activities of its subsidiaries include the cultivation and management of oil palm plantations, marketing, selling and distributing imported and locally manufactured products, shipping agencies, travel offices, property development, property investment, hotels, leasing, ship building, vessel repair and maintenance, fabrication of offshore structures, and provision of defence-related services, education, fabrication and marketing of materials handling systems, manufacturing of fibre cement products, manufacturing of paints, manufacturing of pharmaceutical products, marketing of petroleum products and provision of helicopter and other air transport services. 2.10

BCSB’s original cost of investment and the date of investment BCSB’s original total cost of investment in the Property is RM7,033,228. The original date of investment is 1988.

3.

RATIONALE FOR THE PROPOSED ACQUISITION As a member of the BHB group of companies, PLSB has been leasing the entire Property from BCSB since 1 October 2011 for its pharmaceutical distribution activities. The Proposed Acquisition will enable:

4.

a)

PLSB to cater for the logistical needs arising from the growing demand from Government Hospitals and Clinics as well as the additional supply contracts recently entered into by PLSB with Universiti Kebangsaan Malaysia, Universiti Sains Malaysia and University of Malaya; and

b)

PLSB to reduce its operational costs arising from savings in rental payments for the Property of approximately RM1.1 million per year.

FINANCIAL EFFECTS OF THE PROPOSED ACQUISITION 4.1

Share Capital and Major Shareholders' Shareholding The Proposed Acquisition will not have any effect on the share capital or the major shareholders' shareholding in the Company as it does not involve any issuance of new ordinary shares of RM0.50 each in Pharmaniaga (“Pharmaniaga Shares”).

4.2

Net assets and Gearing The Proposed Acquisition is not expected to have any material impact on the net assets per Pharmaniaga Share for the financial year ending 31 December 2015.

4.3

Earnings The Proposed Acquisition is not expected to have any material impact on the earnings of Pharmaniaga Group for the financial year ending 31 December 2015.

4

5.

RISK FACTORS One of the principal activities of the Pharmaniaga Group is logistics and distribution. In view of the purpose and utilisation of the warehouse mentioned in Section 3 above, the Pharmaniaga Group would not be exposed to any additional category of business and operational risks relating to the Property with the completion of the Proposed Acquisition. A summary of the risk factors relating to the Proposed Acquisition is set out below: 5.1.

Acquisition risk There is a potential risk that Pharmaniaga and PLSB will not attain their intended purpose of acquiring the Property such as not being able to generate sufficient returns to offset the costs of investment. However, Pharmaniaga and PLSB has mitigated such risk by adopting prudent investment strategies prior to making its investment decisions.

5.2.

Completion risk In the event that either PLSB or BCSB fails to complete the Proposed Acquisition in accordance with the provisions of the SPA for the Proposed Acquisition, either party may rescind the SPA for the Proposed Acquisition and thereafter, subject to the terms of the SPA governing the treatment of monies paid by the PLSB, will cease to have any further force and effect.

5.3.

Financial or legal risk Pharmaniaga may be subject to certain financial or legal risks as a result of representations, warranties or covenants given or to be given pursuant to the SPA for the Proposed Acquisition or any related documents executed. Pharmaniaga may also be subjected to contractual risks as a result of non-fulfilment of its obligations under the SPA for the Proposed Acquisition.

6.

INDUSTRY OVERVIEW, OUTLOOK AND PROSPECTS 6.1.

Prospects of the Property and the Proposed Acquisition Pharmaniaga is optimistic on the prospects of the Proposed Acquisition considering that the Property is strategically and conveniently located where it has good accessibility to major highways.

7.

APPROVALS REQUIRED The Proposed Acquisition is not subject to the approval of the shareholders of Pharmaniaga Berhad.

5

8.

INTEREST OF DIRECTORS, MAJOR SHAREHOLDERS’ AND PERSONS CONNECTED TO THEM Save as disclosed below, none of the other directors and/or major shareholder and/or persons connected with the directors or major shareholders of Pharmaniaga have any interest, direct or indirect, in the Proposed Acquisition: (a)

Interested Directors Tan Sri Dato’ Seri Lodin Wok Kamaruddin (“TSLWK”), the Chairman of Pharmaniaga, is also Deputy Chairman and Group Managing Director of Boustead Holdings Berhad (“BHB”). He is a direct shareholder of Pharmaniaga and a shareholder of BHB. Daniel Ebinesan (“DE”), is a Non-Independent Non-Executive Director of Pharmaniaga as well as person connected to BHB by virtue of being Group Finance Director for BHB. In view of this, TSLWK and DE are deemed interested Directors in the Proposed Acquisition. As such, TSLWK and DE have and will abstain from all deliberations and voting on the Proposed Acquisition at the Board meeting of the Company. (TSLWK and DE shall collectively be referred to as the “Interested Directors”)

(b)

Interested Major Shareholders BHB and Lembaga Tabung Angkatan Tentera (“LTAT”) are major shareholders of Pharmaniaga, holding 146,110,415 and 26,010,484 Pharmaniaga Shares or approximately 56.44% and 10.05% equity interest, respectively, in Pharmaniaga as at 10 June 2015. LTAT is also a major shareholder of BHB. Hence, BHB and LTAT are deemed interested in the Proposed Acquisition.

9.

DIRECTORS’ RECOMMENDATION The Board, save for the Interested Directors, having taken into consideration all aspects of the Proposed Acquisition, is of the opinion that the Proposed Acquisition is in the best interest of the Pharmaniaga Group.

10.

STATEMENT OF AUDIT COMMITTEE The Audit Committee of Pharmaniaga, having considered the rationale for the Proposed Acquisition and the financial effects arising from the Proposed Acquisition, is of the opinion that the Proposed Acquisition is:-

11.

(i)

in the best interest of the Group;

(ii)

fair, reasonable and on normal commercial terms; and

(iii)

not detrimental to the interest of the non-interested shareholders of the Company with the basis of the view that the Proposed Acquisition is carried out at arm’s length, on normal commercial terms, on terms not more favourable to the related party than those generally available to the public and on terms not detrimental to the non-interested shareholders.

HIGHEST PERCENTAGE RATIO The highest percentage ratio applicable for the Proposed Acquisition pursuant to Paragraph 10.02(g) of the Listing Requirements is 4.43%, computed based on the Purchase Consideration of the Property as compared to the audited net assets of Pharmaniaga as at 31 December 2014.

6

12.

TOTAL AMOUNT TRANSACTED WITH SAME RELATED PARTY FOR THE PRECEDING TWELVE (12) MONTHS The total amount transacted between Pharmaniaga with LTAT and its subsidiaries and/or persons connected to them for the preceding 12 months was approximately RM2.5 million.

13.

ESTIMATED TIMEFRAME FOR THE PROPOSED ACQUISITION Barring any unforeseen circumstances, the Proposed Acquisition is expected to be completed within the third quarter of 2015.

14.

DOCUMENTS AVAILABLE FOR INSPECTION A copy of the SPA, the Novation Agreement and the valuation letter from KJ dated 13 April 2015 will be made available for inspection at the business address of Pharmaniaga at No. 7, Lorong Keluli 1B, Kawasan Perindustrian Bukit Raja Selatan, Seksyen 7, 40000 Shah Alam, Selangor Darul Ehsan, during normal office 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 10 June 2015.

7

Suggest Documents