KUMPULAN PERANGSANG SELANGOR BERHAD (Company No K) TRANSACTIONS (CHAPTER 10 OF LISTING REQUIREMENTS): NON-RELATED PARTY TRANSACTIONS

Transcription

1 KUMPULAN PERANGSANG SELANGOR BERHAD (Company No K) ANNOUNCEMENT NON-RELATED PARTY TRANSACTIONS KUMPULAN PERANGSANG SELANGOR BERHAD ( PERANGSANG SELANGOR OR COMPANY ) PROPOSED INVESTMENT IN THE REHABILITATION OF WATER MAINS, DRAINS AND SEWERS IN MALAYSIA VIA A PROPOSED SUBSCRIPTION OF 51% EQUITY STAKE IN SMARTPIPE TECHNOLOGY SDN. BHD. BY ITS WHOLLY-OWNED SUBSIDIARY, NADI BIRU SDN. BHD. 1. INTRODUCTION Pursuant to Paragraphs 9.19(23) and 10.05(2) of the Main Market Listing Requirements of Bursa Malaysia Securities Berhad ( MMLR ), the Board of Directors of Perangsang Selangor ( Board ), wishes to announce that Nadi Biru Sdn Bhd ( M) ( NBSB ), a wholly-owned subsidiary of Perangsang Selangor, has on 21 st March 2016, entered into a Shareholders Agreement ( SHA ) with Smartpipe Holdings Sdn Bhd ( K) ( SHSB ) and Smartpipe Technology Sdn Bhd ( T) ( SPT ) in relation to, amongst others, the proposed subscription by NBSB of new ordinary shares of RM1.00 each in SPT to own 51% equity stake of the enlarged issued share capital of SPT for a total investment cost of RM5,100, ( Proposed Investment ), to carry out SPT s business which principally includes the following activities ( Business ): (a) (b) the marketing selling and installing of pipes selling and marketing of pipes and other products, knowhow and technology granted under the License Agreement (as defined herein) primarily for the rehabilitation of water mains, drains and sewers; and such other business as SHSB and NBSB may agree in writing from time to time. SPT will become a 51% owned subsidiary of NBSB upon the subscription of shares as described under Section of this announcement. Please refer to Section 2 of this Announcement for further details. 2. DETAILS OF THE PROPOSED INVESTMENT 2.1 Background Information on the Proposed Investment SPT is an engineering company offering integrated solutions to water and other utility companies for the maintenance of their pipeline assets for the reduction of non-revenue water. Pursuant to a Compact Pipe And Installation License Agreement dated 25th November 2015 ( License Agreement ), Wavin Overseas B. V. ( WAVIN ), a company incorporated in the Netherlands under Dutch law, has granted SPT a licence to market, sell and install plastic pipes systems and other patented products in Malaysia together with the right to use the know how subject to the terms and conditions set out in the License Agreement. 1

2 WAVIN has been established since 1955 and is based in the Netherlands with operations in over 25 countries. Using the expertise and technology available to SPT under the License Agreement, both parties intend to enter into the business of the marketing, selling and installing of pipes and other products, know-how and technology granted under the License Agreement primarily for the rehabilitation of water mains, drains and sewers. 2.2 Background Information on the Parties Involved NBSB NBSB was incorporated in Malaysia under the Companies Act 1965 ( the Act ) on 29 January 2016 as a private limited company. It is a wholly-owned subsidiary of Perangsang Selangor. The authorised share capital is RM400, comprising 400,000 ordinary shares of RM1.00 each of which RM2.00 comprising 2 ordinary shares of RM1.00 each have been issued and credited as fully paid-up. NBSB is currently a dormant company and its intended activity is investment holding. The Directors of NBSB are as follows:- Dato Kamarul Baharin bin Abbas Mohamed Ross bin Mohd Din Ahmad Fariz bin Hassan SHSB SHSB was incorporated in Malaysia under the Act on 13 January 2016 as a private limited company. The authorised share capital of SHSB is RM400, comprising 400,000 ordinary shares of RM1.00 each of which RM4.00 comprising 4 ordinary shares of RM1.00 each have been issued and credited as fully paid-up. SHSB is currently a dormant company and its intended activity is investment holding. The Directors and their interests in SHSB are as follows: Name Nationality No. of shares held Direct % Indirect % Ooi Inn Kee Malaysian 1 25 Nil - Abu Bakar bin Hashim Malaysian 1 25 Nil - 2

3 Tan Peng Khoon Malaysian 1 25 Nil - Sim Khoon Aun Malaysian 1 25 Nil SPT SPT was incorporated in Malaysia under the Act on 2 May 2012 as a private limited company. The authorised share capital of SPT is RM100, comprising 100,000 ordinary shares of RM1.00 each of which RM100, comprising 100,000 ordinary shares of RM1.00 each have been issued and credited as fully paidup. SPT is wholly-owned by SHSB. SPT is principally involved in the laying of pipes for all kinds of constructional, structural and civil engineering works. The Directors of SPT are as follows:- Ng Eng Sun Ooi Inn Kee Abu Bakar bin Hashim Tan Peng Khoon Sim Khoon Aun 2.3 Salient Terms of the SHA Business Pursuant to the Proposed Investment, NBSB and SHSB have entered into the SHA to regulate their relationship in respect of their respective rights and obligations as shareholders of SPT in undertaking the Business Share Capital and Shareholding Structure of SPT On commencement date i.e. the date of issuance of share certificates equivalent to 51% of the paid up capital of SPT in favour of NBSB and 49% in favour of SHSB, the initial shareholding structure of SPT shall be as follows:- Number of Shares Agreed Proportion (%) NBSB 510, SHSB 490, Total 1,000,

4 NBSB and SHSB agree that the eventual share capital and shareholding structure of SPT shall be as follows: - Party No. of Ordinary Shares Percentage Shareholding (%) Subscription Price (RM) NBSB SHSB 5,100,000 4,900, ,100, ,900, Total 10,000, ,000, Financial Requirements The funding requirements of SPT will be obtained by SPT either through commercial borrowings from banks or financial institutions, shareholders loan or other debt instruments as may be mutually agreed by the Shareholders. 2.4 Basis and Justification of the total Cost of Investment The total cost of investment of RM5,100, was derived after taking into consideration the projected capital expenditure and working capital requirement in securing the rehabilitation of water mains, drains and sewers business. 2.5 Liabilities to be assumed by Perangsang Selangor arising from the Proposed Investment There are no liabilities (including contingent liabilities and guarantees) to be assumed by Perangsang Selangor pursuant to the Proposed Investment. 3. RATIONALE FOR THE PROPOSED INVESTMENT The Proposed Investment provides Perangsang Selangor with the opportunity to participate in the non-revenue water ( NRW ) solution projects in the country. The Proposed Investment will also enable Perangsang Selangor to leverage on its past experience in the water industry, mainly in upstream segment. The establishment and execution of NRW reduction program under Federal Government and Selangor State initiatives and the unique selling points of WAVIN s product which provides competitive advantages over the current available technology could potentially shore up SPT order book for the next 5 years. According to Malaysian Water Association, in an article published in a local newspaper on April 2015, there is significant value to be unlocked in NRW market since there are some 44,000 km of pipes in need of replacement throughout Malaysia. 4. RISK FACTORS AND PROSPECTS The Board does not foresee any material risks associated with the Proposed Investment as SPT has obtained the exclusive rights from its technological partner to sell and employ the 4

5 compact pipe system in Malaysia and it has already obtained product approval from the relevant authority. Furthermore, its technological partner has strong global presence and the technology used has its competitive advantage comparing to other technology currently offered in the market, in terms of its installation mechanism and life span. Going forward, the Proposed Investment provides Perangsang Selangor with the opportunity to participate in the NRW business in Malaysia as SPT intends to be part of the NRW segment by introducing the new trenchless technology with the minimal disruption during the pipeline rehabilitation and renovation period. In addition, the Proposed Investment provides Perangsang Selangor with the opportunity to participate in other sectors namely the gas and sewerage sectors, other than the water-related sector in Malaysia, as the technology is also designed to cater for these markets. 5. FUNDING OF NBSB S INVESTMENT NBSB s aggregate investment totalling up to RM5,100, is expected to be funded by internally generated funds. 6. EFFECTS OF THE PROPOSED INVESTMENT 6.1 Share Capital The Proposed Investment will not have any effect on the issued and paid-up share capital of Perangsang Selangor. 6.2 Net Assets and Gearing The Proposed Investment is not expected to have any material effect on the net assets per share and gearing of the Perangsang Selangor Group. 6.3 Earnings and Earnings Per Share ( EPS ) The Proposed Investment will not have any significant material effect on the earnings or EPS of Perangsang Selangor Group for the financial year ending 31 December However, it is expected to contribute positively to Perangsang Selangor Group s earnings going forward. 6.4 Substantial Shareholders Shareholdings The Proposed Investment will not have any effect on the shareholdings of the substantial shareholders in Perangsang Selangor. 7. APPROVALS REQUIRED The Proposed Investment is not subject to the approval of any governmental authorities or the shareholders of Perangsang Selangor. 5

6 8. DIRECTORS AND MAJOR SHAREHOLDERS INTEREST None of the Directors and major shareholders of Perangsang Selangor or any person connected to the Directors or major shareholders have any interest, direct or indirect, in the Proposed Investment. 9. DIRECTORS STATEMENT The Board of Directors of Perangsang Selangor, having considered the Proposed Investment, is of the opinion that the Proposed Investment is in the best interest of Perangsang Selangor. 10. ESTIMATED TIMEFRAME FOR COMPLETION OF THE PROPOSED INVESTMENT Barring any unforeseen circumstances, the initial subscription of 51% in SPT by NBSB in respect of the Proposed Investment is expected to be completed by 2 nd quarter HIGHEST PERCENTAGE RATIO APPLICABLE Based on a total investment cost of RM5, , the percentage ratio applicable is 0.42%, which is the aggregate value of the consideration in relation to the net asset value of Perangsang Selangor Group as at 31 December DOCUMENTS AVAILABLE FOR INSPECTION The SHA is available for inspection at the registered office of Perangsang Selangor at 16 th Floor, Plaza Perangsang, Persiaran Perbandaran, Shah Alam, Selangor Darul Ehsan, during normal office hours from Monday to Friday (except public holidays) for a period of three (3) months from the date of this announcement. This Announcement is dated 21 March