SHINING CORPORATION LTD

Transcription

1 CIRCULAR DATED 26 FEBRUARY 2008 THIS CIRCULAR IS IMPORTANT AND REQUIRES YOUR IMMEDIATE ATTENTION. If you are in any doubt as to the action you should take, you should consult your stockbroker, bank manager, solicitor, accountant or other professional adviser immediately. If you have sold or transferred all your shares in the capital of Shining Corporation Ltd (the Company ), you should immediately forward this Circular, the Notice of Extraordinary General Meeting and the accompanying Proxy Form to the purchaser or transferee or to the stockbroker, bank or agent through whom the sale or transfer was effected for onward transmission to the purchaser or transferee. The Singapore Exchange Securities Trading Limited ( SGX-ST ) assumes no responsibility for the correctness of any of the statements made, reports contained or opinions expressed in this Circular. Approval in-principle granted by the SGX-ST to the Company for the listing and quotation of the Strategic Shares (as defined in this Circular) and the New Shares (as defined in this Circular) on the official list of Catalist is not to be taken as an indication of the merits of the Proposed Placement, the Strategic Shares, the New Shares, the Company, its subsidiaries and its securities. SHINING CORPORATION LTD (Company Registration Number G) (Incorporated in the Republic of Singapore) CIRCULAR TO SHAREHOLDERS in relation to (1) THE PROPOSED ISSUE OF (A) 167,307,692 STRATEGIC SHARES IN THE CAPITAL OF THE COMPANY AT AN ISSUE PRICE OF S$0.13 FOR EACH STRATEGIC SHARE TOGETHER WITH THE ISSUE OF UP TO 155,653,846 FREE WARRANTS EXERCISABLE AT S$0.13 PER WARRANT, ALL BY WAY OF PRIVATE PLACEMENT TO CITIPOINT ASIA REAL ESTATE CAPITAL LTD AND/OR ITS NOMINEE AND (B) THE NEW SHARES ARISING FROM THE EXERCISE OF THE WARRANTS PURSUANT TO THE STRATEGIC PLACEMENT AGREEMENT. (2) THE PROPOSED WHITEWASH RESOLUTION FOR THE WAIVER BY THE INDEPENDENT SHAREHOLDERS OF THEIR RIGHT TO RECEIVE A MANDATORY GENERAL OFFER FROM CITIPOINT ASIA REAL ESTATE CAPITAL LTD (AND PARTIES ACTING IN CONCERT WITH IT) FOR ALL THE ISSUED AND PAID-UP SHARES OF THE COMPANY FOLLOWING COMPLETION OF THE PLACEMENT. (3) THE PROPOSED CONDITIONAL SHINING IPT TRANSACTIONS RELATING TO THE SALE OF THE HARDWARE BUSINESS, THE SALE OF THE SHOP UNIT, THE USE OF THE NAME SHINING AND THE NOVATION OR SUB-CONTRACT OF THE RETRO-FITTING CONTRACT. (4) A MANDATE FOR THE COMPANY TO ENGAGE IN PROPERTY DEVELOPMENT IN SINGAPORE FOLLOWING COMPLETION OF THE PROPOSED TRANSACTIONS. Financial Advisor to Shining Corporation Ltd DMG & Partners DMG & PARTNERS SECURITIES PTE. LTD. (Incorporated in the Republic of Singapore) (Company Registration Number E) Independent Financial Adviser to the Independent Directors of Shining Corporation Ltd (Incorporated in the Republic of Singapore) (Company Registration Number D) IMPORTANT DATES AND TIMES: Last date and time for lodgement of Proxy Form : 16 March 2008 at a.m. Date and time of Extraordinary General Meeting : 18 March 2008 at a.m. Place of Extraordinary General Meeting : 11 Changi South Street 3, #04-01 Singapore

2 TABLE OF CONTENTS DEFINITIONS... 3 Page LETTER TO SHAREHOLDERS INTRODUCTION DETAILS OF THE PROPOSED PLACEMENT PROPOSED WHITEWASH RESOLUTION THE PROPOSED SHINING IPT TRANSACTIONS MANDATE FOR THE COMPANY TO ENGAGE IN PROPERTY DEVELOPMENT IN SINGAPORE APPOINTMENT OF PROPOSED NEW DIRECTORS RATIONALE FOR THE PROPOSED TRANSACTIONS FINANCIAL EFFECTS INTERESTS OF DIRECTORS AND SUBSTANTIAL SHAREHOLDERS DIRECTORS AND SUBSTANTIAL SHAREHOLDERS INTERESTS IN THE COMPANY ADVICE OF HLF TO THE INDEPENDENT DIRECTORS IN RESPECT OF THE PROPOSED PLACEMENT AND THE PROPOSED WHITEWASH RESOLUTION ADVICE OF HLF TO THE INDEPENDENT DIRECTORS IN RESPECT OF THE PROPOSED SHINING IPT TRANSACTIONS STATEMENT OF THE AUDIT COMMITTEE INDEPENDENT DIRECTORS RECOMMENDATIONS EXTRAORDINARY GENERAL MEETING ABSTENTION FROM VOTING ACTION TO BE TAKEN BY SHAREHOLDERS DIRECTORS RESPONSIBILITY STATEMENT CONSENTS DOCUMENTS AVAILABLE FOR INSPECTION APPENDIX APPENDIX NOTICE OF EXTRAORDINARY GENERAL MEETING PROXY FORM EXTRAORDINARY GENERAL MEETING 2

3 DEFINITIONS Except where the context otherwise requires, the following definitions apply throughout this Circular:- Board : The board of Directors of the Company. Builders Shop : Builders Shop Pte Ltd, a wholly-owned subsidiary of the Company. Business Transfer Agreement : A conditional agreement dated 10 September 2007 between Builders Shop and Shining Holdings for the transfer of the Hardware Business by Builders Shop to Shining Holdings on the terms and subject to the conditions therein. Catalist : Formerly known as SGX-SESDAQ. CDP : The Central Depository (Pte) Limited. Circular : This circular dated 26 February Completion : The completion of the Proposed Placement in accordance with the terms and subject to the conditions of the Strategic Placement Agreement. Completion Date : The date notified in writing by the Company to the Subscriber as the date for Completion, being a date no later than five (5) Market Days after the satisfaction of the conditions precedents set out in the Strategic Placement Agreement or such other date as the parties to the Strategic Placement Agreement may agree and all other conditions of the Strategic Placement Agreement being satisfied. Code : The Singapore Code on Take-overs and Mergers. Company : Shining Corporation Ltd. Companies Act : The Companies Act, Chapter 50, of Singapore, as amended from time to time, and any enactment thereof. Deed of Covenant : A conditional deed dated 10 September 2007 between the Company, Shining Construction, Shining Holdings and Tan Kay Kiang. Deed of Mutual Covenants : A conditional deed dated 10 September 2007 between the Company, Shining Construction, Shining Holdings and Shining Development for the continued use of the name Shining by each of the Shining Entities. Deed Poll : The deed poll to be executed by the Company for the purpose of constituting the Warrants and containing, inter alia, provisions for the protection of the rights and interests of the Warrantholders. Director : A director of the Company as at the date of this Circular. Effective Date : 1 January

4 EGM : The extraordinary general meeting of the Company, notice of which is set out on pages 60 to 62 of this Circular. Executive Directors : Tan Kay Kiang, Tan Chin Hoon, Tan Kay Tho and Tan Kay Sing. Exercise Period : The period during which Warrants may be exercised commencing on and including the date of issue of the Warrants and expiring at 5.00 p.m. on the date immediately preceding the fifth anniversary of the date of issue of the Warrants, subject to the conditions of the Deed Poll. Exercise Price : $0.13, being the sum payable in respect of each New Share to which the Warrantholder will be entitled to subscribe upon exercise of a Warrant, or such adjusted price subject to the conditions of the Deed Poll. Existing Controlling : Tan Kay Kiang, Tan Chin Hoon, Tan Kay Tho, Tan Kay Sing Shareholders who are the Company s Directors, their respective spouses, Alex Tan Nan Choon, a Director of the Company, and Shining Holdings who collectively are deemed interested in 29.72% of the Company s total issued shares. FA : DMG & Partners Securities Pte. Ltd., being the financial adviser to the Company. Group or Group Companies : The Company and its subsidiaries and Group Company means any one of them. HLF or IFA : Hong Leong Finance Limited, being the independent financial adviser to the Independent Directors in respect of the Proposed Placement, the Proposed Whitewash Resolution and the Proposed Shining IPT Transactions. IFA Letter : The letter dated 26 February 2008 from HLF to the Independent Directors in respect of the Proposed Placement, the Proposed Whitewash Resolution and the Proposed Shining IPT Transactions, a copy of which is set out in Appendix 1 of this Circular. Hardware Business : The entirety of the business and goodwill carried on by Builders Shop as a going concern in hardware distribution and retailing and certain assets owned by or under the control or in the possession of Builders Shop and used in the conduct of this business. Independent Directors : The independent Directors as at the date of this Circular, namely, Lee Eng Kian and Gurdaib Singh s/o Pala Singh. Independent Shareholders : Shareholders other than (i) the Subscriber and (ii) persons acting in concert with the Subscriber; and (iii) persons not independent of the persons mentioned in (i) and (ii) of this definition. Issue Price : S$0.13 per Strategic Share. Knight Frank : Knight Frank Pte Ltd. 4

5 Latest Practicable Date : 22 February 2008, being the latest practicable date prior to the printing of this Circular. Listing Manual : The listing manual of the SGX-ST, as amended from time to time. Market Day : A day on which the SGX-ST is open for trading of securities in Singapore. New Shares : New Shares in the capital of the Company to be issued from time to time upon the exercise of the Warrants. Nico Po : Nico Po Purnomo, an Indonesian citizen. Open Market Value : The open market value of the Shop Unit. Proposed Placement : The proposed placement of the Strategic Shares and the Warrants to the Subscriber under the Strategic Placement Agreement. Proposed Shining IPT : The respective transactions set out in the Business Transfer Transactions Agreement, the Deed of Covenant, the Deed of Mutual Covenants and the Shop Unit Option Agreement. Proposed Transactions : The Proposed Placement and the Proposed Shining IPT Transactions. Proposed Whitewash : The resolution proposed as Ordinary Resolution Number 2 in the Resolution Notice of EGM appended to this Circular, for a waiver by the Independent Shareholders of their rights to receive a mandatory takeover offer from the Subscriber and its concert parties for the Shares not already owned or controlled by the Subscriber and its concert parties. Record Date : The date as at the close of business in relation to any dividend, right, allotment or other distributions on which members of the Company must be registered in order to participate in such dividend, right, allotment or other distributions. Register of Members : The Register of Members of the Company. Retro-Fitting Contract : The tender for retro-fitting addition and alteration work for approximately $30 million submitted by Shining Construction to AFP Warehouse Pte Ltd. Rights Issue : The renounceable non-underwritten rights issue of 48,000,000 new Shares in the capital of the Company undertaken by the Company pursuant to the offer information statement dated 16 August Securities Account : Securities account maintained by a Depositor with CDP but does not include a securities sub-account. SFA : The Securities and Futures Act (Chapter 289) of Singapore and any statutory modification or re-enactment thereof. 5

6 Shareholder : Registered holders of Shares in the Register of Members of the Company except that where the registered holder is CDP, the term Shareholders shall, in relation to such Shares, mean the persons to whose Securities Accounts maintained with CDP are credited with the Shares. Shares : Ordinary shares in the share capital of the Company. Shining Entities : The Company, Shining Construction, Shining Holdings and Shining Development. SGX-ST or Exchange : Singapore Exchange Securities Trading Limited. SGX-SESDAQ : SGX-ST Dealing and Automated Quotation System. SIC : Securities Industry Council. Shining Construction : Shining Construction Pte Ltd, a wholly-owned subsidiary of the Company. Shining Development : Shining Development Pte Ltd, a wholly-owned subsidiary of Shining Holdings. Shining Holdings : Shining Holdings Pte Ltd, a company whose share capital is wholly held by the Executive Directors, Tan Siok Hwee and Tan Seok Luan. Shop IPT Sale : The proposed sale of the Shop Unit by Shining Construction to Shining Holdings in accordance with the Shop Unit Option Agreement. Shop Unit : The shop unit at 29 Lorong 13 Geylang, Singapore owned by Shining Construction. Shop Unit Book Value : The book value of the Shop Unit as recorded in the books of Shining Construction as at 31 December Shop Unit Option Agreement : The conditional option agreement dated 10 September 2007 between Shining Construction and Shining Holdings for the sale, through an option, of the Shop Unit to Shining Holdings. Strategic Placement : A conditional agreement dated 10 September 2007 between Agreement the Company and the Subscriber pursuant to which the Subscriber will inter alia invest $21,750, in the Company by subscribing for the Strategic Shares and the Warrants. Strategic Shares : 167,307,692 new Shares in the capital of the Company with each such new Share to be issued at $0.13 to the Subscriber. Subscriber : Citipoint Asia Real Estate Capital Ltd, a corporation incorporated in the British Virgin Islands and having its registered address at Nerine Chambers, P.O. Box 905, Road Town, Tortola, British Virgin Islands. Substantial Shareholder : A substantial Shareholder as defined under Section 81 of the Companies Act. S$, $ or cents : Singapore dollars and cents, respectively. 6

7 Valuation Certificate : The valuation certificate dated 12 December 2007 from Knight Frank in respect of the valuation of the Shop Unit. Warrant Agent : The warrant agent to be appointed by the Company in connection with the Deed Poll. Warrantholders : Registered holders of the Warrants, except where CDP is the registered holder, the term Warrantholders shall, where the context so admits, mean the persons named as Depositors in the Depository Register into whose Securities Accounts are credited with such Warrants. Warrants : Up to 155,653,846 warrants to be constituted under the Deed Poll, each warrant entitling the holder thereof to subscribe for one (1) new Share upon its exercise in accordance with the terms and subject to the conditions of the Deed Poll. % or per cent : Percentage or per centum. The terms Depositor, Depository Agent and Depository Register shall have the meanings ascribed to them, respectively, in Section 130A of the Companies Act. The term subsidiary shall have the meaning ascribed to it by Section 5 of the Companies Act. The term acting in concert shall have the meaning ascribed to it in the Code. Words importing the singular shall, where applicable, include the plural and vice versa, and words importing the masculine gender shall, where applicable, include the feminine and neuter genders and vice versa. References to persons shall include corporations. Any reference in this Circular to any enactment is a reference to that enactment as for the time being amended or re-enacted. Any word defined under the SFA, the Companies Act, the Listing Manual or the Code or any statutory modification thereof and used in this Circular shall, where applicable, have the meaning ascribed to it under the SFA, the Companies Act, the Listing Manual or the Code or any statutory modification thereof, as the case may be. Any reference to a time of day in this Circular shall be a reference to Singapore time unless otherwise stated. All discrepancies in the tables included herein between the listed amounts and totals thereof are due to rounding. Accordingly, figures shown as totals in certain tables may be an arithmetic aggregation of the figures that precede them. 7

8 SHINING CORPORATION LTD (Company Registration Number G) (Incorporated in the Republic of Singapore) LETTER TO SHAREHOLDERS Directors Registered Office Tan Kay Kiang (Executive Chairman) 11 Changi South Street 3 #04-01 Tan Chin Hoon (Group Managing Director) Singapore Tan Kay Tho (Executive Director) Tan Kay Sing (Executive Director) Alex Tan Nan Choon (Non-Executive Director) Lee Eng Kian (Independent Director) Gurdaib Singh s/o Pala Singh (Independent Director) 26 February 2008 To: The Shareholders of Shining Corporation Ltd Dear Sir / Madam 1. INTRODUCTION On 10 September 2007, the Company announced that the Company had entered into the Strategic Placement Agreement for the proposed placement of new ordinary shares and certain free warrants to the Subscriber. The Subscriber is a special purpose corporation incorporated in the British Virgin Islands. The entire share capital of the Subscriber is held by Nico Po. Under the Strategic Placement Agreement, the Subscriber will invest S$21,750,000 in the Company by subscribing for the Strategic Shares and the Warrants. Each Strategic Share will be subscribed for at the Issue Price. Each Warrant will be issued free to the Subscriber, on the terms and subject to the conditions of the Strategic Placement Agreement and the Deed Poll. Nico Po has additionally undertaken that he shall ensure the performance by the Subscriber of its obligations to subscribe for the Strategic Shares on the terms and subject to the conditions of the Strategic Placement Agreement. On 18 September 2007, the Company received written confirmation from a bank in Singapore that Nico Po has sufficient financial resources to fulfil the obligations to subscribe for the Strategic Shares. The Company has accepted such written confirmation of financial resources. The Strategic Placement Agreement stipulates that as a condition to the placement of the Strategic Shares, the Group is to enter into the Proposed Shining IPT Transactions. Under the Strategic Placement Agreement, the performance of each of the placement of the Strategic Shares and the Proposed Shining IPT Transactions by the respective parties thereto are inter-conditional upon the performance of each of these transactions. It is further the intention of Nico Po, who will be a controlling shareholder of the Company on Completion, for the Group to enter into the new business of property development following the completion of the Proposed Placement. In line with the proposed new business, the Proposed Shining IPT Transactions will allow the Company to divest itself of its current businesses that will no longer form its core business if the Proposed Transactions are approved. A copy of the Company s announcements made on 10 September 2007 and 18 September 2007 are available on SGX-ST s website at 8

9 The Directors are convening an EGM to seek Shareholders approval, by way of respective ordinary resolutions, for (i) the issue of the Strategic Shares, (ii) the issue of the Warrants, (iii) the issue of New Shares upon the exercise of the Warrants, all of which are pursuant to the Strategic Placement Agreement (and in the case of the issue of the Warrants and the New Shares, additionally pursuant to and on the terms of the Deed Poll), (iv) the Proposed Shining IPT Transactions and (v) the Group to be permitted to engage in property development in Singapore following Completion, as set out in the notice of EGM on pages 60 to 62 of this Circular. The purpose of this Circular is to provide Shareholders with the relevant information relating to these matters. 2. DETAILS OF THE PROPOSED PLACEMENT 2.1 The Strategic Placement Agreement Pursuant to the Strategic Placement Agreement, the Company agreed to:- (a) allot and issue the Strategic Shares to the Subscriber or its nominees at an issue price of S$0.13 per Strategic Share; and issue up to 155,653,846 free Warrants to the Subscriber, each Warrant carrying the right to subscribe for one (1) New Share at an exercise price of S$0.13 for each New Share, upon the terms and subject to the conditions in the Strategic Placement Agreement. The Strategic Shares and the New Shares when issued and fully paid will rank pari passu in all respects with and carry all rights similar to the existing issued Shares except that they will not rank for any dividend, right, allotment or other distributions, the Record Date for which falls on or before the Completion Date or the date of exercise of the relevant Warrants (as the case may be). The Strategic Shares will represent approximately 53.7% of the enlarged issued share capital of the Company upon completion of the Proposed Placement. Accordingly, the Proposed Placement is subject to the prior approval of Shareholders pursuant to Rule 803 of the Listing Manual which provides that a company shall not issue securities to transfer a controlling interest without prior approval of shareholders in general meeting. The Issue Price of S$0.13 for each of the Strategic Shares and the exercise price of S$0.13 for each of the Warrants represents a discount of:- (i) (ii) 24.3% to the weighted average price for trades done on the SGX-SESDAQ on 7 September 2007, being the full market day prior to the signing of the Strategic Placement Agreement; and 30.3% to the prevailing market price of the Shares on 7 September 2007 prior to the signing of the Strategic Placement Agreement. The Issue Price was agreed based on arms length negotiations taking into account, inter alia, the existing financial position of the Company, historical and prevailing Share prices and market sentiments. 2.2 Principal Terms of the Warrants The information contained in this section is a summary of the proposed terms of the Warrants to be constituted under the Deed Poll. Number of Warrants : Up to 155,653,846 free Warrants to be issued Status of New Shares : The New Shares arising from the exercise of the Warrants will, upon, allotment and issue, rank pari passu in all respects with the then existing Shares save for any dividend, right, allotment or other distribution that may be declared or paid, the Record Date for which falls before the relevant date of issue of the New Shares 9

10 Trading of the Warrants : Not applicable. Under Rule 826 of the Listing Manual, if an application is made for the listing of company warrants, the SGX- ST expects at least 100 warrantholders for a class of company warrants in order to ensure a sufficient spread of holdings to provide for an orderly market in the securities. As the Warrants are proposed to be placed out only to the Subscriber, the Warrants will not be listed and traded on Catalist. Form and subscription : The Warrants will be issued in registered form and will be rights constituted by the Deed Poll. Subject to the terms and conditions of the Warrants to be set out in the Deed Poll, each Warrant shall entitle the Warrantholder, at any time during the Exercise Period, to subscribe for one (1) New Share at the Exercise Price. Exercise Period : The Warrants may be exercised at any time from and including the date of issue of the Warrants up to 5.00 p.m. (Singapore time) on the date immediately preceding the fifth anniversary of the date of issue of the Warrants unless such date is a date on which the Register of Members is closed or is not a Market Day, in which event the Exercise Period shall expire on the date prior to the closure of the Register of Members or the immediately preceding Market Day, as the case may be, but excluding such period(s) during which the Register of Members may be closed, subject to the terms and conditions of the Warrants to be set out in the Deed Poll. Warrants remaining unexercised at the expiry of the Exercise Period shall lapse and cease to be valid for any purpose. Notice of expiry of the Warrants shall be given to all Warrantholders at least thirty (30) days before the expiry date, and the Company shall announce the same on the SGX-ST. Adjustments : The Exercise Price and the number of Warrants will, after their issue, be subject to adjustments under certain circumstances as set out in the Deed Poll. Such circumstances include capitalisation issues, rights issues and certain capital distributions which will be more particularly described in the Deed Poll. Modification to terms of : The Company may, without the consent of the Warrantholders but Warrants and Deed Poll in accordance with the terms of the Deed Poll, effect any modification to the terms of the Warrants or the Deed Poll which, in the opinion of the Company, is not materially prejudicial to the interests of the Warrantholders or which, in its opinion, is either (i) of a formal, technical or minor nature or to correct a manifest error to comply with mandatory provisions of Singapore law or (ii) to vary or replace provisions relating to the transfer or exercise of the Warrants or meetings of the Warrantholders (in order to facilitate trading in or the exercise of the Warrants or in connection with the implementation and operation of the book-entry (scripless) settlement system in respect of the trades of the Company s securities on Catalist). Any such modification shall be binding on all Warrantholders and all persons having an interest in the Warrants and shall be notified to them in accordance with the terms of the Deed Poll. Any alteration in the terms of the Warrants to the advantage of the Warrantholders is subject to the approval of the Shareholders except where the alterations are made pursuant to the terms of the Deed Poll. 10

11 Transfer and transmission : A Warrant may only be transferred in the manner prescribed in the terms and conditions of the Warrants to be set out in the Deed Poll including, inter alia, the following:- (i) (ii) a Warrantholder ( Transferor ) shall lodge, during normal business hours on any Business Day (as defined in the Deed Poll) at the specified office of the Warrant Agent, the Transferor s warrant certificate(s) together with a transfer form as prescribed by the Company from time to time (the Transfer Form ) duly completed and signed by or on behalf of the Transferor and the transferee and duly stamped in accordance with any law for the time being in force relating to stamp duty, provided that the Warrant Agent may dispense with requiring CDP to sign as transferee any Transfer Form for the transfer of Warrants to CDP. A Transferor shall be deemed to remain a Warrantholder of the Warrants until the name of the transferee is entered in the Register of Warrantholders by the Warrant Agent. Deceased Warrantholder - the executors and administrators of a deceased Warrantholder (not being one of several joint holders) and, in the case of one or more of several joint Warrantholders, the survivor or survivors of such joint Warrantholders, shall be the only persons recognised as having any title to Warrants registered in the name of a deceased Warrantholder. Such person(s) shall be entitled to be registered as Warrantholders and/or to make such transfer(s) as the deceased Warrantholder is entitled to make, upon the production by such persons to the Company and the Warrant Agent of such evidence as may be reasonably required by the Company and the Warrant Agent to prove their title and on payment of the fees and expenses set out in the Deed Poll. Winding-up : If a resolution is passed for a members voluntary winding-up of the Company then if such winding-up is for the purpose of reconstruction or amalgamation pursuant to a scheme of arrangement to which the Warrantholders, or some person designated by them for such purpose by a resolution, shall be a party and shall have approved or assented to by way of such a resolution, the terms of such scheme of arrangement shall be binding on all the Warrantholders and all persons having an interest in the Warrants; and in any other case every Warrantholder shall be entitled upon and subject to the terms and conditions of the Deed Poll at any time within six (6) weeks after the passing of such resolution for a members voluntary winding-up of the Company, to elect to be treated as if he had immediately prior to the commencement of such winding-up exercised the Warrants to the extent specified in a notice to the Company and had on such date been the holder of the Shares to which he would have become entitled pursuant to such exercise and the liquidator of the Company shall give effect to such election accordingly. The Company shall give notice to the Warrantholders in accordance with the terms and conditions set out in the Deed Poll of the passing of any such resolution within seven (7) Business Days (as defined in the Deed Poll) after the passing thereof. 11

12 Subject to the foregoing, if the Company is wound up for any other reason, all Warrants which have not been exercised at the date of the passing of such resolution for the winding-up of the Company shall lapse and the Warrants shall cease to be valid for any purpose. Further issue of securities : Subject to the terms and conditions of the Warrants set out in the Deed Poll, the Company shall be at liberty to issue Shares to Shareholders either for cash or as a bonus distribution and to issue further subscription rights, upon such terms and conditions as the Company sees fit but the Warrantholders shall not have any participating rights in such further issue(s) of Shares or subscription rights unless otherwise resolved by the Company in general meeting. Governing Laws : Laws of the Republic of Singapore. The 155,653,846 Warrants will be issued on the Completion Date. 2.3 Conditions Precedent for the Proposed Placement The obligations of the Subscriber under the Strategic Placement Agreement to subscribe for the Strategic Shares and the Warrants, and the Company s obligations to issue the Strategic Shares and the Warrants, is conditional upon the performance by the Company and the Subscriber of their respective obligations under the Strategic Placement Agreement and also upon fulfilment of the following: (i) (ii) (iii) (iv) (v) (vi) the Subscriber obtaining a whitewash waiver by the SIC of the requirement for the Subscriber and its concert parties to make a mandatory general offer for the Shares of the Company not already owned by the Subscriber or its concert parties, and if granted subject to conditions, such conditions being acceptable to the Subscriber (the Whitewash Waiver Ruling ); the Company having obtained a whitewash waiver from the Company s Shareholders independent of the Subscriber and its concert parties and fulfilment of other relevant terms and conditions (if any) of the Whitewash Waiver Ruling of the SIC; approval in-principle for the listing and quotation of the Strategic Shares, the Warrants and the New Shares to be issued upon the exercise of the Warrants on the SGX-ST (on conditions, if any, acceptable to the Company and the Subscriber) having been obtained and remaining in full force and effect and where such approval is given subject to conditions which must be fulfilled on or before the Completion Date, they are so fulfilled; all corporate and Shareholders approvals having been obtained by the Company on terms satisfactory to the Company and the Subscriber in respect of the allotment, issue and subscription of the Strategic Shares, the issue of the Warrants and all the transactions ancillary to or contemplated thereto and such approvals remaining in full force and effect on Completion and, if such approvals are subject to any conditions which are required to be fulfilled on or prior to Completion, such conditions are fulfilled; the allotment, issue and subscription of the Strategic Shares and the allotment and issue of the Warrants and the New Shares arising from the exercise of the Warrants not being prohibited by any statute, order, rule, regulation or directive promulgated or issued after the date of the Strategic Placement Agreement by any legislative, executive or regulatory body or authority of Singapore which is applicable to the Company or the Subscriber; on the Completion Date, the representations and warranties of the Company and the Subscriber under the Strategic Placement Agreement being true, accurate and correct in all material respects as if made on the Completion Date, with reference to the then existing circumstances and the Company and the Subscriber having performed in all material respects all of their obligations under the Strategic Placement Agreement to be performed on or before the Completion Date; 12

13 (vii) (viii) (ix) (x) all approvals and Shareholders approvals for the Proposed Shining IPT Transactions having been obtained by the Company on terms satisfactory to the Company and the Existing Controlling Shareholders; the Subscriber being satisfied that the audited consolidated net tangible assets of the Company and its subsidiaries as a group not being less than S$12 million for the financial year ended 31 December 2007, based on the same accounting policies and standards adopted in the Company s financial audited statements ( NTA ), however, in the event Completion occurs at any time before 31 December 2007, the NTA, as reviewed by the Subscriber s appointed auditors in consultation with the auditors of the Company, in respect of the financial period ending as at the end of the month immediately prior to the month in which Completion occurs shall not be less than S$12,000,000 (for avoidance of doubt, all professional costs and related expenses up to an amount no more than S$550,000 in connection with securing the requisite approvals for the Proposed Transactions and brokerage fees payable shall not be computed as reducing the NTA); the Shares of the Company have not been suspended for more than three (3) market days; and the Shares of the Company have not been delisted. The Company and the Subscriber further agreed that they shall respectively use their best endeavours to secure the satisfaction of the conditions precedent above on or before 31 March 2008 or such other date as they may agree in writing (the Cut-Off Date ). The Subscriber may, upon such terms as it thinks fit, waive compliance with any of the conditions precedent above (other than the conditions contained in (i), (ii), (iii), (iv), (v), (vii) and (x)) and any condition so waived shall be deemed to have been satisfied. If any of the conditions precedent are not satisfied or waived, in accordance with the terms of the Strategic Placement Agreement, on or before the Cut-Off Date or such other date as the Company and the Subscriber may agree, the Strategic Placement Agreement shall ipso facto cease and determine thereafter and neither the Company nor the Subscriber shall have any claim against the other for costs, expenses, damages, losses, compensation or otherwise. 2.4 Moratorium in respect of the Strategic Shares The Subscriber has undertaken, that during the period of six (6) months commencing from the date of issue of the Strategic Shares and ending on the date falling six (6) months from the date of the issue of the Strategic Shares, it shall not directly or indirectly dispose of any interest, direct or indirect, in the said Strategic Shares. 2.5 In-principle Approval from the SGX-ST In-principle approval was obtained from the SGX-ST on 22 February 2008 for the dealing in, listing of and quotation for the Strategic Shares and the New Shares on Catalist, subject to:- (a) (c) compliance with the SGX-ST s listing requirements; Shareholders approval for the Proposed Placement at the EGM; submission of an undertaking from the Company to:- (i) (ii) provide a status report on the use of the proceeds from the Proposed Placement in its annual report; and announce any adjustment to the Warrants made pursuant to Rule 829(1) of the SGX- ST Listing Manual. 13

14 The SGX-ST has highlighted that in the event the Company acquires any asset from the Subscriber, Nico Po and/or their related parties, the SGX-ST reserves the right to aggregate the acquisitions and the Proposed Placement, and deem the subsequent asset injections as a very substantial acquisition or reverse takeover under Rule 1015 of the Listing Manual. The in-principle approval granted by the SGX-ST is not to be taken as an indication of the merits of the Proposed Placement, the Company, its subsidiaries, the Shares, the Strategic Shares, the Warrants and the New Shares. The Warrants will not be listed and traded on Catalist as the Warrants are proposed to be placed out only to the Subscriber. 2.6 Approval from the SGX-ST for Waiver of Rule 825 of the Listing Manual Rule 825 of the Listing Manual provides that the number of new shares arising from the exercise/conversion of outstanding company warrants or other convertible securities must in aggregate not exceed 50% of the issued share capital. The number of New Shares arising from the full exercise of the Warrants would exceed 50% of the Company s existing issued share capital (which comprises 144,000,000 Shares). In this connection, the SGX-ST has indicated on 22 February 2008 that it has no objections to the waiver of Rule 825 of the Listing Manual, subject to:- (a) (c) (d) the Company making an announcement of the waiver granted via SGXNET pursuant to Rule 107 of the Listing Manual; the Proposed Placement is approved by Shareholders at the EGM; an unqualified opinion from a financial adviser that the Proposed Placement is not prejudicial to the interests of the Company and its minority shareholders; an unanimous approval from all the Company s non-executive independent directors for the Proposed Placement after having satisfied themselves that the Proposed Placement is not prejudicial to the interests of the Company and its minority shareholders. In fulfilment of condition (a) above, the Company has made an announcement of the waiver of Rule 825 of the Listing Manual on 25 February In fulfilment of condition (c) above, the Company has appointed HLF as its financial adviser. In the IFA Letter dated 26 February 2008 addressed to the Independent Directors, the IFA has stated that given the factors and circumstances considered, as set out in the IFA Letter, the Proposed Placement is not prejudicial to the interests of the Company and its Shareholders. Hence, the IFA recommends that the Directors advise Shareholders to vote in favour of the Proposed Placement. The IFA Letter is set out in Appendix 1 of this Circular. In fulfilment of condition (d) above, all the independent non-executive directors of the Company have also confirmed that having considered the IFA Letter dated 26 February 2008, they are of the view that the Proposed Placement is not prejudicial to the interests of the Company and its minority Shareholders. 2.7 Proposed Use of Proceeds from the Proposed Placement and the Exercise of the Warrants The Company intends to use the net proceeds from the Proposed Placement and the exercise of the Warrants as follows:- (a) to undertake activities relating to high-end residential development of properties in Singapore; and for general working capital purposes. 14

15 3. PROPOSED WHITEWASH RESOLUTION 3.1 As at the Latest Practicable Date, the Subscriber and its concert parties do not hold any Shares or instruments convertible into the rights to subscribe for and options in respect of Shares. On completion of the Proposed Placement, the Subscriber and/or its nominees will hold 167,307,692 Shares, representing approximately 53.7% of the enlarged Share capital of the Company. Pursuant to Rule 14.1(a) of the Code and Section 139 of the SFA, the Subscriber and parties acting in concert with it would be required to make a general offer for the remaining Shares not owned or agreed to be acquired by the Subscriber and parties acting in concert with it at the highest price paid or agreed to be paid by the Subscriber and parties acting in concert with it for the Shares in the past 6 months. The Subscriber has sought a waiver from the SIC of its obligation to make a general offer under Rule 14.1(a) of the Code and for SIC to permit it to propose the Proposed Whitewash Resolution. The SIC had on 12 November 2007 granted the Subscriber a waiver of the requirements to make a general offer following the completion of the Proposed Placement subject to, inter alia, the following conditions:- (a) (c) (d) a majority of holders of voting rights of the Company present and voting at a general meeting, held before the issue of the Strategic Shares to the Subscriber, approve by way of a poll, a resolution (the Whitewash Resolution ) to waive their rights to receive a general offer from the Subscriber and parties acting in concert with it; the Whitewash Resolution is separate from other resolutions; the Subscriber, parties acting in concert with it and parties not independent of it, abstain from voting on the Whitewash Resolution; the Subscriber and its concert parties did not acquire or are not to acquire any shares or instruments convertible into and options in respect of shares of the Company (other than subscriptions for, rights to subscribe for, instruments convertible into or options in respect of new shares which have been disclosed in the circular):- (i) (ii) during the period between the announcement of the Proposed Placement and the date shareholders approval is obtained for the Whitewash Resolution; and in the 6 months prior to the announcement of the Proposed Placement, but subsequent to negotiations, discussions or the reaching of understandings or agreements with the directors of the Company in relation to the issue of the Strategic Shares; (e) (f) the Company appoints an independent financial adviser to advise its independent shareholders on the Whitewash Resolution; the Company sets out clearly in the circular to shareholders:- (i) (ii) (iii) (iv) details of the Proposed Placement; the dilution effect of the Proposed Placement, or upon the exercise or conversion of the Warrants to be issued, to existing holders of voting rights; the number and percentage of voting rights in the Company as well as the number of instruments convertible into, rights to subscribe for and options in respect of shares in the Company held by the Subscriber and its concert parties as at the latest practicable date; the number and percentage of voting rights to be issued to the Subscriber, or to be acquired by the Subscriber upon the exercise of the Warrants to be issued; 15

16 (v) (iv) specific and prominent reference to the fact that the Proposed Placement would result in the Subscriber holding shares carrying over 49% of the voting rights of the Company based on its enlarged issued share capital, and the fact that the Subscriber will be free to acquire further shares without incurring any obligation under Rule 14 to make a general offer; the shareholders, by voting for the Whitewash Resolution, are waiving their rights to a general offer from the Subscriber at the highest price paid by the Subscriber and parties acting in concert with it for the Company s shares in the past 6 months preceding the commencement of the Proposed Placement; (g) (h) (i) the circular by the Company to its shareholders states that the waiver granted by the SIC to the Subscriber and parties acting in concert with it from the requirement to make a general offer under Rule 14 is subject to the conditions stated at 3.1(a) to (f) above; the Subscriber obtains SIC s approval in advance for those parts of the circular that refer to the Whitewash Resolution; and to rely on the Whitewash Resolution, the acquisition of the Strategic Shares by the Subscriber pursuant to the Proposed Placement must be completed within 3 months of the approval of the Whitewash Resolution. 3.2 The Independent Shareholders are therefore asked to vote on a poll on the Proposed Whitewash Resolution set out as an ordinary resolution in the Notice of EGM on page 61 of this Circular. 3.3 Shareholders should note that the passing of the ordinary resolution relating to the Proposed Placement is conditional upon the Proposed Whitewash Resolution being approved by Independent Shareholders as the Proposed Whitewash Resolution is a condition precedent in the Strategic Placement Agreement. If Independent Shareholders do not vote in favour of the Proposed Whitewash Resolution, the Proposed Placement will not take place. As completion of the Proposed Shining IPT Transactions is also conditional upon the completion of the Proposed Placement taking place simultaneously, the Proposed Shining IPT Transactions will also not take place. 3.4 Independent Shareholders should note that the Proposed Placement would result in the Subscriber holding Shares carrying over 49% of the voting rights of the Company based on its enlarged issued share capital. 3.5 Independent Shareholders should also note that by voting for the Proposed Whitewash Resolution:- (a) the Subscriber will be free to acquire further Shares without incurring any obligation under Rule 14 of the Code to make a general offer; and the Independent Shareholders will be waiving their rights to a general offer from the Subscriber at the highest price paid by the Subscriber and parties acting in concert with it for the Company s Shares in the past 6 months preceding the commencement of the Proposed Placement. 16

17 3.6 Shareholding Effects After the Allotment Before the Allotment After the Allotment and Issue of the and Issue of the and Issue of the Strategic Shares and Strategic Shares (7) Strategic Shares (8) the New Shares (9) Total Interest Total Interest Total Interest Directors No. of Shares % No. of Shares % No. of Shares % Tan Kay Kiang (1) 20,500, ,500, ,500, Tan Chin Hoon (2) 16,265, ,265, ,265, Tan Kay Tho (3) 19,925, ,925, ,925, Tan Kay Sing (4) 25,525, ,525, ,525, Tan Nan Choon 2,425, ,425, ,425, Lee Eng Kian Gurdaib Singh s/o Pala Singh Substantial Shareholders Shining Holdings 13,950, ,950, ,950, Citipoint Asia Real Estate Capital Ltd (5) 167,307, ,961,538 (6) (6) Other Shareholders (10) 101,209, ,209, ,209, Public Shareholders (11) 84,544, ,544, ,544, Assuming that the Proposed Whitewash Resolution is approved by Shareholders, the illustrative effects of the allotment and issue of the Strategic Shares and the New Shares on the shareholding structure of the Company (based on the shareholding information available to the Company as at the Latest Practicable Date) are set out below:- Notes:- (1) As at the Latest Practicable Date, Tan Kay Kiang has a direct interest in 1,549,920 Shares. He is deemed to be interested in the 13,950,420 Shares held by Shining Holdings Pte Ltd and the 4,999,980 Shares held by his wife, Tay Swee Leng, by virtue of section 7 of the Companies Act. (2) As at the Latest Practicable Date, Tan Chin Hoon has a direct interest in 314,910 Shares. He is deemed to be interested in the 13,950,420 Shares held by Shining Holdings Pte Ltd and the 1,999,980 Shares held by his wife, Tjioe A Lan, by virtue of section 7 of the Companies Act. (3) As at the Latest Practicable Date, Tan Kay Tho has a direct interest in 1,474,890 Shares. He is deemed to be interested in the 13,950,420 Shares held by Shining Holdings Pte Ltd and the 4,500,000 Shares held by his wife, Yeong Yoon Ying, by virtue of section 7 of the Companies Act. (4) As at the Latest Practicable Date, Tan Kay Sing has a direct interest in 11,025,000 Shares. He is deemed to be interested in the 13,950,420 Shares held by Shining Holdings Pte Ltd and the 550,000 Shares held by his wife, Sim Mong Lan, by virtue of section 7 of the Companies Act. (5) Citipoint Asia Real Estate Capital Ltd, which is the Subscriber under the Strategic Placement Agreement, is whollyowned by Mr Nico Po Purnomo. Mr Nico Po Purnomo is therefore deemed to be interested in such number of Strategic Shares and New Shares as may be held by the Subscriber by virtue of section 7 of the Companies Act. (6) All the Warrants will be placed out to the Subscriber (or its nominee) on the terms and conditions of the Deed Poll after Shareholders approval has been obtained at the EGM. (7) The issued share capital of the Company before the allotment and issue of the Strategic Shares comprises 144,000,000 Shares. (8) Assuming that 167,307,692 Strategic Shares are allotted and issued, the issued share capital of the Company will comprise 311,307,692 Shares. (9) Assuming that 167,307,692 Strategic Shares and 155,653,846 New Shares are allotted and issued, the issued share capital of the Company will comprise 466,961,538 Shares. (10) Refers to persons other than Directors, their respective spouses and Substantial Shareholders. (11) Refers to persons other than Directors, Substantial Shareholders and their respective associates. 17

18 3.7 HLF has been appointed the IFA to the Independent Directors in relation to the Proposed Whitewash Resolution. The letter from HLF to the Independent Directors containing their advice is set out in Appendix 1 of this Circular. 4. THE PROPOSED SHINING IPT TRANSACTIONS 4.1 Details of the Proposed Shining IPT Transactions (a) The Proposed Shining IPT Transactions are set out in the following agreements: (i) the Business Transfer Agreement; (ii) (iii) (iv) the Shop Unit Option Agreement; the Deed of Mutual Covenants; and the Deed of Covenant. Under Chapter 9 of the Listing Manual, where a listed company proposes to enter into a transaction with its director, CEO or Controlling Shareholder (or any of their associates, as that term is defined in the Listing Manual), Shareholders approval and/or an immediate announcement is required in respect of that transaction if its value is equal to or exceeds certain financial thresholds. In particular, Shareholders approval is required where the value of such transaction with any such persons is equal to or more than: (A) (B) 5% of the listed company s latest audited NTA; or 5% of the listed company s latest audited NTA, when aggregated with the value of all other transactions entered into with the same Interested Person during the same financial year. As at the Latest Practicable Date, Shining Holdings and Shining Development are associates of the Executive Directors. The shareholders of Shining Holdings are the Executive Directors (each of whom owns approximately 21.8% of the issued share capital of Shining Holdings), Ms Tan Seok Luan and Ms Tan Siok Hwee (each of whom owns approximately 6.4% of the issued share capital of Shining Holdings). Accordingly, the Proposed Shining IPT Transactions constitute interested person transactions within the meaning of Chapter 9 of the Listing Manual. Pursuant to Chapter 9 of the Listing Manual, HLF has been appointed as independent financial adviser to the Independent Directors to advise them on whether the Proposed Shining IPT Transactions are on normal terms and whether the transactions are prejudicial to the interests of the Company and the minority Shareholders. The letter from HLF to the Independent Directors in relation to the Proposed Shining IPT Transactions is set out in Appendix 1 of this Circular. The proposed divestment of the Hardware Business Business Transfer Agreement: The Company s wholly-owned subsidiary, Builders Shop, carries on the Hardware Business at six shop units in Singapore including at the Shop Unit. Builders Shop has entered into the Business Transfer Agreement to sell the Hardware Business to Shining Holdings. Shining Holdings is controlled by the Executive Directors. Accordingly, the proposed divestment of the Hardware Business is an interested person transaction within the scope of Chapter 9 of the SGX-ST Listing Manual. 18