The investment in Wind Energy Holding Company Limited and acquisition of assets transaction of a listed company.

Transcription

1 Ref. NUSA. 107/2015 October 30, 2015 Subject: Attention: Attachment: The investment in Wind Energy Holding Company Limited and acquisition of assets transaction of a listed company. President The Stock Exchange of Thailand. Information Memorandum for the Acquisition of Assets As Nusasiri Public Company Limited (the Company ) held the Board of s Meeting No. 12/2015 on October 29, 2015, the Company would like to inform the important resolutions and opinion which can be summarized as follows: 1. Approved that Nusa Power Company Limited ( Nusa Power ) invest in Wind Energy Holding Company Limited ( WEH ) by an acquisition of shares in WEH and approved an entering into assets acquisition transaction of a listed company. In this regards, NUSA POWER will acquire shares in WEH from DD Mart Holding Company Limited ( DD MART ), which is currently a shareholder in WEH, amounting to 1,272,728 shares, at a par value of Baht 10 per share, calculated as 1.17 percent of WEH s total paid-up shares, at the purchase price of at Baht per share, having the total purchase price at Baht 700,000,400 by making a payment pursuant to the conditions specified in the relevant share purchase agreement. In this regard, NUSA POWER has increased its registered capital according to the Extraordinary General Meeting of the Shareholders No. 1/2015 dated October 16, 2015 which has increased its registered capital from Baht 1,000,000 to a new registered capital of Baht 2,800,000,000 with a par value of Baht 100 per share, by issuing ordinary shares of 27,990,000 shares, with a par value of Baht 100 per share, totaling Baht 2,799,000,000, having the total registered capital of Baht 2,800,000,000 divided into 28,000,000 shares, with a par value of Baht 100 per share. In this regard, NUSA POWER has called for the first payment of such capital increase at 25 percentage of the share par value amounting to Baht 700,000,000 whereby the Company which holds shares in NUSA POWER not less than percent of the total registered capital, will make such payment from the fund raised by the allocation of shares for Private Placement in the amount of Baht 700,000,000. The share acquisition transaction is an acquisition of assets by a listed company according to the Notification of Capital Market Supervisory Board No. TorChor 20/2551 re: Rules on Entering into Material Transactions Deemed as Acquisition or Disposal of Assets and the Notification of the Board of Governors of the Stock Exchange of Thailand Re: Disclosure of Information and Other Acts of Listed Companies Concerning the Acquisition and Disposition of Assets B.E (both can be called as the Acquisition or Disposition Notification ). The value of such transaction is equivalent to 8.84 percent of the value of the Company s total assets, based on the net after tax profit from the normal course of business operations and calculated from the Company s consolidated financial statements as of June 30, 2015 and WEH s consolidated financial statements as of December 31, In addition, when aggregating this share acquisition transaction with other 3 transactions entered into by the Company and subsidiaries in the past 6 months, the cumulative transaction size is equivalent to 8.84 percent of the value of the Company s total assets, based on the net after tax profit from the normal course of business operations and calculated from the Company s consolidated financial statements as of June 30, 2015 and WEH s consolidated financial statements as of December 31, 2014, which is lower than 15 percent which is not categorized in any transaction class according to the Acquisition or Disposition Notification. In this case, the 1

2 Company is not required to disclose such transaction to the SET; however, the Company has disclosed details of such transaction as appeared in the attachment to this document. Entering into such share acquisition transaction is not the connected party transaction under the Notification of Capital Market Supervisory Board TorChor 21/2551 re: Rules on Connected Transactions and the Notification of the Board of Governors of the Stock Exchange of Thailand Re: Disclosure of information and other acts of listed companies concerning the Connected Transaction B.E.2546 (the Connected Notification ). Since DD MART is not the connected person of the Company; therefore, the Company has no duty to comply with the Connected Notification for entering into this share acquisition. In addition, Mr. Pairoj Sirirat and Mr. Pradej Kitti-itsaranon, to whom the capital increased shares according to the private placement no.4 as detailed be allotted, is a shareholder in DD MART amounting to 7,606,000 shares and 4,981,580 shares respectively, calculated as 5.28 and 3.46 percent of DD MART s total paid-up shares respectively, but Mr. Pairoj Sirirat and Mr. Pradej Kitti-itsaranon are not directors and not involve in management of DD MART. If the allocation of the private placement no.4 is successful, Mr. Pairoj Sirirat and Mr. Pradej Kitti-itsaranon will be shareholders in the Company amounting to 1,430,000,000 shares and 800,000,000 shares respectively, calculated as and 9.94 percent of the Company s total paid-up shares respectively, and Mr. Pairoj Sirirat and Mr. Pradej Kitti-itsaranon will not be directors and not involved in management of the Company. Given the aforementioned, Mr. Pairoj Sirirat and Mr. Pradej Kitti-itsaranon are, therefore, not the connected person of the Company pursuant to the Connected Notification. In any event, the Company will enter into the said transaction on conditions that the relevant counterparties to the share sale and purchase agreement of the WEH s shares, including other relevant agreements and documents, have performed all obligations under the condition precedents as prescribed in such share sale and purchase agreement including other relevant agreements and documents. In addition, the Meeting approved the authorization to the Board of s of the Company and/or the Executive Committee and/or Chief Executive Officer and/or any person entrusted by the such persons to have the power to consider, contact, negotiate, amend, agree, execute, enter into and deliver documents, instruments and/or agreements and other documents relating to the counterparties and/or government authorities and/or other persons relating to the entering into such transaction, including but not limited to the Memorandum of Understanding regarding the sale and purchase of the WEH s shares and/or the share purchase agreement of the WEH s shares, including to request for consent from the counterparties and/or other related persons, to contact, seek approval from relevant official authorities, including the Office of the Securities and Exchange Commission and the SET, as well as to amend the relevant information memorandum to be disclosed, to disclose relevant information, to give statement and information to relevant authorities, and to determine the conditions and details in relation to the acquisition of WEH s shares, and to take any actions necessary and relevant to the entering into such transaction in all respects until completion of the transaction, and to have the power to appoint and/or remove a substitute to take the foregoing actions. Please be informed accordingly. Yours sincerely, (Mr.Somjitr Chaichana) /Company Secretary Executive Office Tel ext

3 Information Memorandum on Acquisition of Asset The Board of s meeting of Nusasiri Public Company Limited ( the Company ) No. 12/2015 held on 29 October 2015 has resolved to approve Nusa Power Company Limited ( NUSA POWER or Subsidiary Company ), a subsidiary company of which percent of its issued and paid-up ordinary shares are held by the Company, to purchase 1,272,728 ordinary shares of Wind Energy Holding Company Limited ( WEH ) from DD Mart Holding Limited( DD MART ) with a par value of 10 baht per share amounting to 1.17 percent of the total issued and paid-up shares of WEH at a price of 550 baht per share or worth totaling no more than 700,000,400 baht. Such purchase of WEH shares is considered an acquisition of Subsidiary Company s asset according to the Notification of the Capital Market Supervisory Board No. Tor Jor 20/2008 Re: Rules on Entering into Material Transactions Deemed as Acquisition or Disposal of Assets and the Notification of the Board of Governors of the Stock Exchange of Thailand Re: Disclosure of Information and Other Acts of Listed Companies Concerning the Acquisition and Disposition of Asset 2004 (as amended) ( Notification concerning the acquisition and disposition ). Such volume of transaction is equivalent to 8.84 percent of the total asset of the Company which is calculated from the Company s consolidated financial statement as of 30 June 2015 and WEH s consolidated financial statement as of 31 December When considering a total of 3 acquisition and disposal transactions that the Company and Subsidiary Company completed in the past 6 months, the volume of transactions are equivalent to 8.84 percent of the total asset of the Company which is calculated from the Company s consolidated financial statement as of 30 June 2015 and WEH s consolidated financial statement as of 31 December The value is calculated on the basis of net profit from a normal course of business operation which is lower than 15 percent, which is not considered into any class of transaction under Notification concerning the acquisition and disposition. Thus the Company does not have to prepare a report or disclose the transaction to the Stock Exchange of Thailand ( SET ). However, the Company voluntarily discloses such transaction. Therefore transaction details are shown as follows: 1) Date/Month/Year of entering into the transaction NUSA POWER shall enter into the transaction provided that all condition precedents specified in the Share Purchase Agreement between NUSA POWER and DD MART signed on 30 October 2015 have already occurred. 2) Parties concerned Seller DD Mart Holding Company Limited Buyer Nusa Power Company Limited, a subsidiary company of which percent of its issued and paid-up ordinary shares are held by the Company The relationship between the parties NUSA POWER and DD Mart have no relationship which can be considered as a connected person under the Notification of the Capital Market Supervisory Board No. Tor Jor 21/2008 Re: Connected Transaction Rule and the Notification of the Board of Governors of the Stock Exchange of Thailand Re: Disclosure of Information and Other Acts of Listed Companies concerning the Connected Transaction 2003 (as amended) ( Notification on the Connected Transaction ). As a consequence, the Company shall have no duty to perform under the Notification on the connected transaction upon entering into such transaction. 3

4 However, Mr. Piroj Sirirat and Mr. Pradej Kitti-itsaranon who shall be allocated shares for private placement No. 4 according to the approval of the Chief Executive Officer held on 28 October 2015 are the shareholders of DD MART in the amount of 7,606,000 shares and 4,981,580 shares respectively or 5.28% and 3.46% of paid-up capital of DD Mart relatively. Mr. Piroj Sirirat and Mr. Pradej Kitti-itsaranon are not directors and management team of DD MART. After share allocation completed, Mr. Piroj Sirirat and Mr. Pradej Kitti-itsaranon shall hold 1,430,000,000 and 800,000,000 shares of the Company respectively or equivalent to 16.93% and 9.47% of paid-up capital of the Company respectively. Both of them shall not take a position as a member of the board of director or the management team. Thus, Mr. Piroj Sirirat and Mr. Pradej Kitti-itsaranon shall not be a connected person regarding to Notification on the Connected Transaction. 3) General Characteristic of the transaction In considering the volume of transaction in asset acquisition by NUSA POWER calculated on the basis of consolidated financial statement of the Company ending 30 June 2015 and consolidated financial statement of the WEH ending 31 December 2014 with 3 acquisition and disposal transactions that the Company and Subsidiary Company completed in the past 6 months prior to the latest transaction, it is found that the volume of transaction calculated on the basis of net profit from the normal course of business operation has a maximum value of Rules Calculation formula Size of the transaction 1. Net tangible assets Net profit Total value of consideration Total value of securities Not applicable because there is no new share issued - Moreover, within the past 6 months, the Company has a transaction of asset acquisition from the NUSA ONE Company Limited, whichis Subsidiary Company of which percent of its issued and paid-up ordinary shares are held by the Company, has a business operation in providing service of real estate development, trading, and leasing of house, building, condominium, apartment, hotel, restaurant, department store, sport mall building, project management, and other types of service relating to real estate development. The Company has established Nusa Power Company Limited of which approximately percent of all its issued shares are held by the Company. Nusa Power Company Limited has a business operation as a manufacturer, distributor, and dealer of electricity from all sources and types of power with a complete range of service. Furthermore, the Company also has held a share or invested in other companies including Nusa Logistics Company Limited which has a business operation in all types of logistics. The Company has a collective transaction under criteria as follows: Rules Size of the transaction 1. Net tangible assets Net profit Total value ofconsideration Total value of securities - 4

5 4) Description of the acquired asset Asset to be acquired 1,272,728 ordinary shares of WEH with a par value of 10 baht per share amounting to 1.17 percent of all the issued and paid-up share of WEH. Location of WEH th Floor Wireless Road, Lumpini, Pathumwan, Bangkok Tel Juristic Person Registration Number Type of business WEH has a main business operation concerning investment in company which has business objectives of manufacturing and distributing electricity generated from wind power, providing service concerning a development of supplying essential resources, providing consultancy service concerning wind power plant project to the Subsidiary Company, and be a developer and manager of wind power plant project. Registered capital As of 28 October 2015, WEH has a paid-up registered capital amounting to 1,088,373,000 baht dividing into 108,837,300 ordinary shares with a par value of 10 baht per share. Board of directors As of 28 October 2015, the Board of s of WEH shall be composed of 9 directors as follows: List of Mr. NopNarongdej Mr. KornNarongdej Mr. NutthavutPaoborhom Mr. Than Riensuwan Associate Prof. SomnukTheerakulphisut Mr. ApichardNartasil Mr. Pierre CrockMelguard Mr. Amarn Lakhani Mrs. Emma Luis Collins Position The directors who have an authority to sign on behalf of the Company are (1) Mr. NopNarongdej, Mr. KornNarongdejand, Mr. NutthavutPaoborhom shall be signed by two-third of the aforementioned directors in tandem with a company seal, or (2)the authorized signature shall be signed by one of the aforementioned directors in tandem along with Mrs. Emma Luis Collins or Mr. ThanRiensuwan or Mr. Amarn Lakhani, totaling of two signatures with a company seal. 5

6 Shareholder Structure as of shareholder meeting dated 4 August List of shareholder Before the transaction After the transaction Number of shares Percentage Number of shares Percentage KPN Energy (Thailand) Company Limited /1 64,717, ,717, The Kitti-Itsaranont Group 30,139, ,866, DD Mart Holding Company Limited /2 18,656, ,383, Mr. Pradet Kitti-Itsaranont 5,000, ,000, Mr. Kamthorn Kitti-Itsaranont 2,161, ,161, Miss Jenjira Kitti-Itsaranont 2,161, ,161, Miss Nanthida Kitti-Itsaranont 2,161, ,161, Demco Public Company Limited /3 4,210, ,210, Thai Focus Equity Fund company limited /4 1,532, ,532, Nusa Power Company Limited - - 1,272, Miss Jaruwan Wongma 700, , Mr. Srisant Jitworanan 550, , Mr. Sataporn Phothong 526, , Mr. Sompong Cholkadeedumrongkul 507, , The Anantaprayoon Group 507, , Mr. Somyot Anantaprayoon 253, , Mrs. Jareeporn Anantaprayoon 253, , Others 5,447, ,447, Total 108,837, ,837, Remark 1. The lists of major shareholders name of KPN Energy Company (Thailand) Limited as of 17 July 2015 are as follows: Mr.Nopporn Supapipat holds percent of shares. Next Global Investment Company Limited holds percent of shares. Dynamic Link Venture Company Limited (previously named as Renewable Energy Corporation Limited) holds percent of shares. 2. The lists of major shareholders name of DD Mart Holding Company Limited as of 15 July 2015 are as follows: Mr.Kamthorn, Ms.Jenjira, and Ms.Nanthida Kitti-Itsaranont each holds percent of shares. Mr.Pradet Kitti-Itsaranont holds 3.46 percent of shares. Therefore, the Kitti-Itsaranont Group holds percent of shares. 3. The major shareholder of Demco Public Company Limited as of 28 August 2015 is as follows: Mrs.Prapee Puipuntawong holds percent of shares. 4. Thai Focus Equity Fund Limited is a company established in England. Business Operations Overview of WEH WEH has a main business operation regarding investment in company which has business objectives of manufacturing and distributing electricity generated from wind power, providing service concerning a development of supplying essential resources, and providing 6

7 consultancy service concerning wind power plant project to the Subsidiary Company. As of present, WEH has entered into the electricity sale contract with Electricity Generating Authority of Thailand for 8 projects including electricity purchase contract totaling 690 Megawatts. It is estimated that all 8 projects would have Megawatts in production capacity. Each project will distribute its electricity to the Electricity Generating Authority of Thailand. Two projects namely K.R.Two Project and First Korat Wind have already distributed its electricity. Significant financial information Comprehensive Income Statement (Unit: Baht million) Operating revenues , , Costs of sales and services (9.45) (635.78) (777.85) Operating expenses (53.97) (279.78) (321.73) Operating profit (loss) (39.28) 1, , Other revenues Profit (loss) before financial expenses and income tax (15.20) 1, , Net income (loss) (187.50) Consolidated financial position statement (Unit: Baht million) Assets Current Assets Cash and cash equivalent , , Account receivable and others Other current assets Total Current Assets , , Non-Current Assets Investment in the associate 1, Loan to related parties Property, plant and equipment , , Intangible assets Prepaid expense Other non-current assets Total non-current assets 1, , , Total Assets 1, , , Liabilities and shareholders equity Current liabilities Short-term loan Account payable Other account payable Current portion of long-term loan

8 Accrued interest Other current liabilities Total current liabilities , , Non-current liabilities Long-term loan from financial institution - 7, , Long-term loan from related parties Other long-term loan Other non-current liabilities Total non-current liabilities , , Total liabilities 1, , , Issued capital 1, , , Paid-up capital Paid-in capital in excess of par , Other components of shareholders equity Retained loss (365.74) (397.19) (149.19) Total shareholders equity , , Non-controlling interest - 2, , Total shareholders equity add non-controlling interest , , Total liabilities and shareholders equity 1, , , Remark: The financial statement for the year 2012 was audited by the auditor namely Mr.Sukit Wongthavarawat, certified public accountant registration number 7816 from KPMG Phoomchai Holding Company Limited. The financial statement for the year was audited by the auditor namely Mr.Wairoj Jindamaneepithak, certified public accountant registration number 3565 from KPMG Phoomchai Holding Company Limited. Significant financial information for calculating the size of the transaction Financial information (Baht million) Consolidated financial statement (audited) Financial statement of the Company Total assets 8, , Intangible assets Total liabilities 3, , Shareholders equity 5, , Non-controlling interest , NTA 4, , Profit (loss) 6 months (1/1/15-30/6/15) Add profit (loss) 6 months (1/7/57-31/12/57) Profit (loss) 12 months

9 5) Total Value of Consideration The total value of consideration paid by NUSA POWER in acquisition of 1,272,728 ordinary shares of WEH, with a par value of 10 baht per share or equivalent to 1.17 percent of all the issued and paid-up shares of WEH at a purchase price of 550 baht per share, shall not exceed 700,000,400 baht. In this regard, NUSA POWER shall totally pay for such ordinary shares by cash within 30 October ) Total value of acquired asset The account value of WEH according to the financial statement as of 31 December 2014 equals 6,607,937,765 baht. Nonetheless, the total purchase price of WEH ordinary shares from DD MART shall not approximately exceed 700,000,400 baht. 7) Criteria to set the value of consideration The criteria to set the value of consideration in this purchase of WEH ordinary shares shall be in accordance with the mutual agreement of two parties in reference to the evaluation of WEH ordinary shares on the basis of Discount Cash Flow Approach, P/E Multiples, and EV/EBITDA Multiples. Moreover, it shall be under an assumption specified in the electricity sale contract with Electricity Generating Authority of Thailand and previous data from WEH consolidated financial statement regarding overall operation. 8) Potential benefit to the Company As of present, a property management business has been operated in a highly competitive business environment. In addition, an industry of property development business has fluctuated directly with the state of economy. Therefore, an investment in other business which has a stable income and cash flow such as energy business will reduce such risk for the Company. Besides, business of renewable energy power plants is considered to be an infrastructure business supported by government sectors and has been expanded with a continuing growth trend as can be seen from an increasing demand in electricity consumption each year. As a consequence, an effective investment in the business of renewable energy power plant will result in an increase of business opportunity for the Company, efficient growth, and shall generate reward to the Company and shareholders in a long term. 9) Source of fund In order for NUSA POWER to have adequate funding to purchase WEH shares, NUSA POWER has proceeded to increase registered capital in accordance with the extraordinary meeting No.1/2015 held on 16 October It will increase a registered capital from the previous one of 1,000,000 baht to a newly registered capital of 2,800,000,000 baht with a par value of 100 baht per share. The newly allotment of 27,990,000 ordinary shares with a par value of 100 baht per share is equivalent to 2,799,000,000 baht. The new registered capital is totally 2,800,000,000 baht, which is divided into 28,000,000 shares with a par value of 100 baht per share. The Company which has not less than percent shareholding of all registered capital in NUSA POWER shall pay an allotment of share in proportion amounting to 25 percent of par value, which is equivalent to 700,000,000 baht. The Company shall gather money from private placement amounting to 700,000,000 baht so as to purchase WEH ordinary shares. 10) Condition of the transaction The purchase of WEH ordinary shares from DD MART on this occasion shall be under the important condition precedent specified in the sale of share contract between NUSA POWER and DD MART as hereinafter mentioned. NUSA POWER shall gain an approval to enter into such transaction from the Company s Board of s meeting in order to purchase WEH ordinary share from DD MART as specified in the sale of share contract and under any law relevant. NUSA POWER shall have enough investment funds to purchase such shares. The guarantee 9

10 and confirmation from DD MART shall be correct and true. DD MART has acted according to all guarantees, confirmations, regulations, and conditions as specified in the sale of share contract. 11) Opinion of the board of directors on the transaction The Company s Board of s has hired UOB Kay Hian Public Company (Thailand) Limited ( UOBKH ) to evaluate a value of WEH ordinary share and consider a suitability of investment in such ordinary share. UOBKH has expressed that according to a study of financial statement and business operation of WEH, as of present, entering into a purchase of WEH ordinary share transaction is reasonable because the purchase price of 550 baht per share is lower than an actual value of WEH ordinary share. Moreover, the Company has hired legal advisor to conduct legal due diligence of WEH and share purchase agreement from various sources. Therefore, the Company s Board of s meeting No. 12/2015 held on 29 October 2015 has resolved to approve NUSA POWER to purchase 1,272,728 ordinary shares of WEH from DD MART with a par value of 10 baht per share amounting to 1.17 percent of all the issued and paid-up share of WEH at a price of 550 baht per share or totaling no more than 700,000,400 baht. The Company s Board of has viewed that entering into such transaction is reasonable and it will be for the best interest of the Company and shareholders as specified in Clause 8 foreseeable benefit for the Company. 12) Opinion of the audit committee/ or the Company s directors which is different from the opinion of the Company s Board of s -None- The Company hereby certifies that the information contained in this information memorandum is correct and true in all respect and it is written with due diligence and acted in the best interests of the shareholder. Please be informed accordingly Yours sincerely, (Mr.Somjitr Chaichana) /Company Secretary Executive Office Tel ext