PROPOSED ACQUISITION OF THE ENTIRE 21,045,316 ORDINARY SHARES OF RM1

Transcription

1 SCIENTEX BERHAD PROPOSED ACQUISITION OF THE ENTIRE 21,045,316 ORDINARY SHARES OF RM1.00 EACH IN THE SHARE CAPITAL OF MONDI IPOH SDN BHD FOR A PURCHASE CONSIDERATION OF RM58,000, BY SCIENTEX PACKAGING FILM SDN BHD, A WHOLLY-OWNED SUBSIDIARY OF SCIENTEX BERHAD 1. INTRODUCTION The Board of Directors of Scientex Berhad ( Scientex or the Company ) wishes to announce that on 5 August 2015, Scientex Packaging Film Sdn Bhd (Company No P) ( SPFSB ), a wholly-owned subsidiary of Scientex, has entered into a Share Purchase Agreement ( SPA ) with Mondi Consumer Packaging International GmbH (Registered with the Commercial Register of the Commercial Court of District Court of Steinfurt under HRB 10560) ( Vendor ) to acquire 21,045,316 ordinary shares of RM1.00 each in the capital of Mondi Ipoh Sdn Bhd (Company No P) ( MISB ) ( Sale Shares ), representing the entire issued and paid-up share capital of MISB for a purchase consideration of Ringgit Malaysia Fifty Eight Million (RM58,000,000.00) ( Purchase Consideration ) only to be satisfied entirely via cash upon the terms and conditions contained in the SPA ( Proposed Acquisition ). Upon completion of the Proposed Acquisition, SPFSB will hold the 100% equity interest in MISB and accordingly, MISB will become a wholly-owned subsidiary of the Company. 2. INFORMATION ON MISB MISB was incorporated in Malaysia on 17 November 1973 as a private limited company under the name of Thong Fook Plastic Industries Sdn Bhd. It changed its name to Thong Fook Plastics Industries Sdn Bhd and Nordenia-Thong Fook (Malaysia) Sdn Bhd on 27 August 1992 and 8 August 2000 respectively. It then changed its name to Nordenia (Malaysia) Sdn Bhd on 18 December 2007 before assuming its present name on 2 October 2012 when it became a part of Mondi Group following its acquisition as part of the acquisition from Nordenia International AG. MISB has an authorised capital of RM25,000, divided into 25,000,000 ordinary shares of RM1.00 each, of which 21,045,316 ordinary shares of RM1.00 each have been issued and fully paid up. MISB is currently a wholly-owned subsidiary of the Vendor. The principal activity of MISB is manufacturing and sale of plastic packaging products with manufacturing plants situated at Sungai Siput and Chemor, Ipoh, Malaysia. The existing directors of MISB are as follows:- a) Dr Matthias Florian b) Wong Chee Kheong c) Jӧrg Dorring-Kogge, Geb. Wollermann d) Andrzej Bednarek e) Dr. Marita Hedwig Paasch The audited financial statements for the following financial year end ( FYE ) shows that MISB has recorded the following net profit and net assets:- FYE 31 December 2014 FYE 31 December 2013 Net Profit RM144,148 ^ RM2,884,334 Net Assets RM37,242,624 RM46,319,673 ^ Note: Lower net profit mainly due to one-off gratuity payment of RM2.7 million. 1

2 3. INFORMATION ON THE VENDOR The Vendor was incorporated in Germany on 9 August 1966 under the name of Nordenia Kunststoffe Peter Mager KG before resumed its present name on 1 October The Vendor has a share capital of EUR 29,189,579. The principal activity of the Vendor is manufacturing of quality consumer packaging, hygiene components and release liner. The existing directors of the Vendor are Dr. Markus Fürst, Jörg Dorring-Kogge and Dr. Matthias Florian. The Vendor is a wholly-owned subsidiary of Mondi Group. Mondi has a dual listed company structure, with a primary listing on the Johannesburg Securities Exchange for Mondi Limited and a premium listing on the London Stock Exchange for Mondi plc. 4. BASIS OF ARRIVING AT AND JUSTIFICATION FOR THE PURCHASE CONSIDERATION The Purchase Consideration was arrived at on a willing-buyer willing-seller basis, after taking into account of the followings:- a) An enterprise value over normalised earnings before interest, tax, depreciation and amortisation ( EBITDA ) of approximately 6.44 times. The normalised EBITDA of MISB for the FYE 31 December 2014 is mainly after taking into account the one-off gratuity payment as mentioned above and the inter-companies adjustments within Mondi Group; b) A price-to-book multiple of approximately 1.56 times over the audited net assets of MISB for the FYE 31 December 2014 of RM37,242,624; and c) The future prospects of MISB as set out in Section 8 of this announcement. In addition, the Proposed Acquisition is expected to generate synergistic benefits to Scientex and/or its subsidiaries ("Scientex Group" or "the Group") resulting from economies of scale which would in turn give rise to improved operational, procurement and administrative efficiencies. The Proposed Acquisition allows the consolidation of MISB with the operations of the Scientex Group and accordingly will enable the Scientex Group to benefit from the increased and larger market share in plastic packaging as well as to leverage on its competitive advantage in the manufacturing of packaging products. 5. SALIENT TERMS OF THE SPA 5.1 The Vendor sells to SPFSB and SPFSB purchases from the Vendor, with effect from the Closing Date, the Sale Shares free from any charge, claim, condition, lien, option, pledge, mortgage, security interest or right of first refusal, including any restriction on voting, transfer or receipt of income, subject to full payment of the Purchase Consideration pursuant to the terms of the SPA. 5.2 The Purchase Consideration shall be paid on the Closing Date. 5.3 The completion of the SPA shall take place on 11 th August 2015 at a.m. at the offices of Block B-1, C-1, D, Lot 1608, Rawang Integrated Industrial Park, Jalan Rawang Batang Berjuntai, Rawang, Selangor Darul Ehsan ("Closing Date"). 5.4 At the Closing Date, SPFSB shall: a) deliver to the Vendor evidence satisfactory to the Vendor that all entities of the Mondi plc and Mondi Limited s group of companies ( Mondi Group ) which have provided security of whatever kind, including guarantees, for liabilities of 2

3 MISB vis-à-vis banks are released at the Closing Date, which guarantee to be released are as follows: (i) the corporate guarantee dated 7 May 2015 issued by Mondi plc in favour of the Royal Bank of Scotland in connection with the facility agreement dated 24 February 2014; (ii) the corporate guarantee dated 25 April 2003 issued by Nordenia International AG (former name of the Vendor) in favour of HSBC Bank Malaysia Berhad to secure RM7,700, in connection with the banking facilities granted by HSBC Bank Malaysia Berhad; and (iii) the corporate guarantee dated 29 October 2007 issued by Nordenia International AG (former name of the Vendor) in favour of HSBC Bank Malaysia Berhad to secure RM7,700,000 in connection with the banking facilities granted by HSBC Bank Malaysia Berhad; b) pay the Purchase Consideration to the Vendor s Account, free and clear of costs and charges and without any withholdings in immediately available funds with value as at the Closing Date; and c) deliver to the Vendor evidence that SPFSB is authorised to execute the SPA. 5.5 At the Closing Date, the Vendor shall deliver to SPFSB: a) original written resignations by Dr Matthias Florian, Jӧrg Dorring-Kogge, Geb. Wollermann, Andrzej Bednarek and Dr. Marita Hedwig Paasch, the existing directors of MISB with no claims whatsoever against MISB; b) instrument of transfer of the Sale Shares duly executed by the Vendor in favour of SPFSB, accompanied by the original share certificates representing the Sale Shares in the name of the Vendor, and the latest audited financial statements of MISB; c) evidence that the Vendor is authorised to execute the SPA; d) a copy of a board resolution of the MISB, duly certified as true copy of the original by the company secretary or director of MISB approving the registration of the share transfer in the Register of Members of the Company, cancellation of old share certificates, issuance of new share certificates in the name of SPFSB, affixing the common seal of MISB on the new share certificates to be issued and revocation of any bank mandates, subject only to the instrument of transfer of Sale Shares being duly stamped; e) a copy of a shareholders resolution of MISB, duly certified as true copy of the original by the company secretary or director of MISB, increasing the maximum number of Directors permitted by the Articles of Association of MISB to such number as shall accommodate the number of directors nominated by the SPFSB and the existing directors; and f) a copy of a shareholders resolution of MISB, duly certified as true copy of the original by the company secretary or director of the MISB, appointing such persons as SPFSB may nominate prior to Closing Date as new directors of the MISB. 6. SOURCE OF FUNDING The Proposed Acquisition will be funded by internally generated funds. 7. LIABILITIES TO BE ASSUMED BY SCIENTEX The only obligation/liability to be assumed by SPFSB and Scientex is releasing Mondi Group from any guarantee provided by them to MISB s financiers and replacing such guarantee with a guarantee(s) provided by SPFSB and/or Scientex upon Closing Date. Save for the aforesaid obligation and/or liability in and arising from, pursuant to or in connection with the SPA, there are no other liabilities, including contingent liabilities and/or guarantees to be assumed by SPFSB and Scientex arising from the Proposed Acquisition. 3

4 8. RATIONALE AND PROSPECTS Scientex Group is principally involved in two (2) business segments, namely manufacturing and property development. The manufacturing segment involves in the manufacturing of industrial and consumer packaging products whilst the property segment involves in the construction and development of residential and commercial properties. The Proposed Acquisition is expected to generate synergistic benefits to the Scientex Group as the Group continues to seek to expand its product portfolio in the packaging industry. With the successful acquisition of the Great Wall companies in January 2013, the Group has expanded its existing portfolio to consumer packaging products. Subsequently, the Group further diversify its consumer packaging products range with acquisition of Seacera Polyfilms Sdn Bhd (now known as Scientex Advance Sdn Bhd) in February The Proposed Acquisition would enable the Scientex Group to further diversify its packaging product range with the manufacture of consumer products for fast moving consumer goods and food and beverage sectors, and industrial products including form-fill-seal (FFS). Once MISB become a wholly-owned subsidiary of Scientex, Scientex will stand to benefit immediately from the revenue and earnings contribution from MISB. In addition, upon completion of the Proposed Acquisition, the enlarged Scientex Group expects to benefit from the increased production capacity and the larger customer base locally and in the region in the manufacturing of packaging products. This would accord the enlarged Scientex Group with larger market share, enhanced products range to cater for diversified customer base and sustain competitive advantages in the manufacturing of packaging products. The Proposed Acquisition will also provide an opportunity for the enlarged Scientex Group to pool together the skills, experiences, competencies and knowledge of MISB. Synergistic benefits are expected to be derived from the Proposed Acquisition resulting from economies of scale which would in turn give rise to improved operational, procurement and administrative efficiencies, which could be achieved through enlarged networks of customers, consolidation of operations, elimination of duplicate resources within the enlarged Scientex Group and the potential increase in efficiency and effectiveness of its marketing and distribution channels. 9. RISK FACTORS The Board of Directors of Scientex does not foresee any risk factors arising from the Proposed Acquisition other than the normal economic risk and inherent risk factors associated with the packaging industry, for which the Scientex Group is already involved in. 10. ESTIMATED TIME FRAME FOR COMPLETION Barring any unforeseen circumstances and subject to all relevant approvals being obtained, the Proposed Acquisition is estimated to be completed by 11 August EFFECT OF THE PROPOSED ACQUISITION 11.1 Share Capital and Substantial Shareholders Shareholding The Proposed Acquisition will not have any effect on the issued and paid-up share capital of Scientex and the shareholdings of the substantial shareholders of Scientex as the Proposed Acquisition will be wholly satisfied in cash. 4

5 11.2 Earnings and Net Assets The Proposed Acquisition is expected to have a positive contribution on the earnings and net assets of Scientex Group for the FYE 31 July 2016 as the Proposed Acquisition are expected to be completed by the first quarter of FYE 31 July Barring any unforeseen circumstances, the Proposed Acquisition is expected to contribute positively to the future earnings and net assets of the Group subsequent to the FYE 31 July Gearing The Proposed Acquisition will not have any material impact on the gearing of the Group for the FYE 31 July APPROVALS REQUIRED The Proposed Acquisition is not subject to the approval of the shareholders of Scientex. The Proposed Acquisition is not conditional upon any other corporate exercise currently undertaken by Scientex. 13. INTERESTS OF DIRECTORS, MAJOR SHAREHOLDERS AND/OR PERSON CONNECTED None of the Directors and/or major shareholders of Scientex and/or persons connected with them have any interest, direct or indirect, in the Proposed Acquisition. 14. DIRECTORS STATEMENT The Board of Directors of Scientex after careful deliberation on the Proposed Acquisition, is of the opinion that the Proposed Acquisition is in the best interest of the Company and the Group and the terms and conditions of the SPA are fair and reasonable. 15. HIGHEST PERCENTAGE RATIO APPLICABLE The highest percentage ratio applicable to the Proposed Acquisition pursuant to paragraph 10.02(g) of the Main Market Listing Requirements of Bursa Malaysia Securities Berhad is 8.14%, calculated based on the purchase consideration compared with the net assets of Scientex as at 31 July DOCUMENTS FOR INSPECTION The SPA is available for inspection at the registered office of Scientex at Jalan Utas 15/7, Shah Alam, Selangor Darul Ehsan during normal business hours on Monday to Friday (except public holidays) for a period of 3 months from the date of this announcement. This announcement is dated 5th day of August