METRONIC GLOBAL BERHAD ( MGB

Transcription

1 METRONIC GLOBAL BERHAD ( MGB or the Company ) - PROPOSED DISPOSAL OF MGB S ENTIRE EQUITY INTEREST IN METRONIC I-CARES SDN BHD ( MiCare ), A SUBSIDIARY ( PROPOSED DISPOSAL ) References are made to the announcement dated 5 October 2012, 10 October 2012, 24 December 2012 and 4 February 2013 in relation to the Proposed Disposal. The defined terms used in this announcement shall carry the same meaning as defined in the earlier announcements made previously unless it specifies otherwise. MGB, on 5 October 2012, announced that the Company had entered into a Sale and Purchase Agreement with Zuellig Pharma Specialty Solutions Holdings Pte Ltd ( the Purchaser or ZPSSH ) to dispose of its entire equity interest in Micare to the Purchaser for a total consideration of RM10,199,700 ( the SPA ). The SPA among others involves the sale by MGB of 1,379,051 ordinary shares in MiCare, comprising about 51% of the total share capital of MiCare. In addition, under the SPA, the other 4 shareholders of MiCare are also selling, amongst them, 1,054,639 ordinary shares in MiCare, comprising about 39% of the total share capital of MiCare. The other Sellers are (i) Mohd Kamal bin Omar (who was a Director of MGB at the time the SPA was entered into on 5 October 2012), (ii) Chan Lay Sing, (iii) Lee Sing Chong, and (iv) Moses Hee Wing Kuen (collectively referred as the Sellers ). The Board of Directors of MGB ( Board ) wishes to announce that the Company, on 9 October 2012, had received a letter from Bursa Malaysia Berhad ( Bursa ) informing that, inter alia, pursuant to paragraph (11) (d) of the Main Market Listing Requirements ( Main LR ), the Proposed Disposal is a related-party transaction by virtue of Mohd Kamal bin Omar s (a director of MGB at the time) interests in MiCare. The Company, under paragraph (2), is therefore required to obtain its shareholders approval at a General Meeting and appoint an independent adviser. Bursa in the letter above also informed that pursuant to paragraph 8.29 of the Main LR stipulates that where a transaction entered into or proposed to be entered into by a Listed issuer or any other action or proposal of a listed issuer is specified in the Main LR as one which requires securities holders approval, such approval must be obtained before the transaction, action or proposal being completed. The Company as required by Bursa, had appointed M&A Securities Sdn Bhd on 17 October 2012 as the Independent Advisor in relation to the Proposed Disposal. A circular and notice of extraordinary general meeting setting out the full details of the Proposed Disposal shall be dispatched to the shareholders of MGB in due course. The Board also wishes to announce that the Company on 14 February 2013 had entered into a Amendment Agreement ( the Amended SPA ) with the Purchaser. The salient terms of the SPA as supplemented by the Amended SPA are as follows: 1

2 1. The Disposal Consideration which is subject to adjustment shall be paid in the following manner: (a) (b) RM9,179,734 or 90% payable upon completion or fulfillment of all the conditions precedent set out in the SPA ( the Completion Date ); and RM1,019,970 or 10% to be paid into escrow held by Zuellig Pharma Sdn Bhd as stakeholder ( Deferred Amount ). The Deferred Amount is payable after expiry of one (1) year and 45 days from the Completion Date, subject to an adjustment (if any) whereby if the net asset value of MiCare ( NAV ) as derived from the net asset statement prepared in accordance with the Sale and Purchase Agreement is less than RM7.0 million, the Purchase Price payable to all the Sellers shall be reduced by an amount equivalent to 90% of the shortfall. The maximum reduction for the shortfall in respect of account receivables or book debts however shall be an amount equivalent to RM3,600, The SPA, as amended by the Amended SPA, is conditional upon the following conditions having been fulfilled or waived on or before the Cut-Off Date which is 28 February 2013; i. the written consent having been obtained from HSBC Amanah Berhad for (i) the change in the shareholders of MiCare as contemplated by the SPA, (ii) the appointment of directors nominated by ZPSSH and (iii) such other transactions in the SPA upon terms acceptable to ZPSSH; ii. iii. iv. the written consents from ten (10) Insurers and Employers which ZPSSH shall determine for the change of the controlling shareholder of MiCare under the SPA; MiCare having received a pioneer status tax exemption for an extended period of five (5) years commencing from the date immediately after the expiry of the Pioneer Status tax exemption granted by the Ministry of International Trade and Industry ( MITI ) or Malaysian Industrial Development Authority ( MIDA ) via Multimedia Development Corporation ( MDeC ) to MiCare with the effective date 26 October 2006 on materially the same terms and conditions and if such pioneer status tax exemption is subject to any conditions which are required to be fulfilled on or prior to the Cut-Off Date, such conditions are so fulfilled; following the receipt of the pioneer status tax exemption granted by MITI or MIDA via MDeC to MiCare referred to in Section (c), MDeC having been notified of, and no objections having been received as of the date where ZPSSH issues a certificate confirming that the Conditions Precedent has been fulfilled to its satisfaction ( Fulfilment Date ) in relation to the purchase of the Sale Shares by ZPSSH; v. the execution of a licence agreement by MiCare and the Sellers in form and substance identical to the Licence Agreement; 2

3 vi. vii. viii. ix. ZPSSH being satisfied based on the Management Accounts and other documents made available by MiCare that all loans extended by MiCare to any shareholders, directors or affiliates of MiCare have been repaid in full; ZPSSH being satisfied based on the Management Accounts and other documents made available by MiCare that all or any amounts owed by any person to MiCare and likely cannot be collected have been written off and extinguished; the Warranties in the SPA remaining true, accurate and not misleading; and ZPSSH being satisfied that the employees of MiCare have given their written confirmation to MiCare that the Employee Handbook forms an integral part of their employment contract with MiCare, and that any and all work product that they had created or will create in connection with the MiCares and icares software, and related system and processes, whether in the course of their employment or otherwise, belong solely to MiCare. 3. If completion documents are not delivered as required, ZPSSH is entitled: a. To exercise its rights as described in Section 4 below. b. To effect Completion so far as practicable having regard to the defaults which have occurred; or c. To fix a new date for Completion (not being more than 35 days after the initial date for Completion). 4. In the event that the Sellers fails to complete the SPA when obliged to do so, and ZPSSH is willing and demonstrates its ability to complete the SPA and has not failed to comply with any of the terms if the SPA or breached any of the terms of the SPA, to elect to exercise its rights to specific performance or require the Sellers to pay to ZPSSH an aggregate sum of RM1,800, as agreed liquidated and ascertained damages and compensation for breach of the SPA; 5. In the event ZPSSH fails to complete the SPA when obliged to do so, and the Sellers are willing and demonstrate their ability to complete the SPA and has not failed to comply with any of the terms of the SPA or breached any of the terms of the SPA, ZPSSH shall pay an aggregate sum of RM1,800, as agreed liquidated and ascertained damages and compensation for breach of the SPA. 6. If no resolution is passed at an EGM of MGB to approve, without amendments, the transactions contemplated under the SPA in accordance with the terms therein, as amended by the Amended SPA on or before 31 March 2013, the Amended SPA shall lapse and have no further effect. For the avoidance of doubt, the SPA shall remain in full force and effect and all parties rights thereunder are preserved. 3

4 7. MGB and ZPSSH covenant to have MiCare enter into a binding agreement with Metronic Engineering Sdn Bhd to extend the tenancy agreement between Metronic Engineering Sdn Bhd and MiCare dated 1 January 2012 for the demised premises of part of the office space on 1 st Floor of No. 2, Jalan Astaka U8/83, Bukit Jelutong, Seksyen U8, Shah Alam, Selangor on the same terms and conditions as the existing lease for a period of up to 28 February 2015 except for (a) the monthly rental, which shall as from the Completion Date be at RM35,000 per month, and (b) the right by the Company to terminate the Tenancy Agreement at its sole discretion, without giving any reasons whatsoever, upon service of a 2 months notice in writing. 8. MGB and ZPSSH covenant to make available to MiCare the same accounting and human resource services and facilities provided to MiCare as at the date of the Amended SPA for a period of seven (7) months after the Completion upon the same terms (other than fees) prevailing as at the date of the Amended SPA. Fees for the aforesaid services shall be RM 5,000 payable monthly to MGB. MiCare shall have the right to terminate the provision of the said accounting and human resource services systems and facilities at its sole discretion, without giving any reasons whatsoever, upon service of a 2 months notice in writing. None of the Directors, major shareholders and persons connected with a Director or a major shareholder of MGB has any interest, direct or indirect, in the Proposed Disposal. Encik Mohd Kamal bin Omar, who is a former director of MGB as well as a shareholder of MiCare, has abstained from all deliberations and voting at the relevant board meetings in respect of the Proposed Disposal during his tenure as a director of MGB. He will also abstain from voting in respect of his direct and/or indirect shareholdings in MGB on the resolution pertaining to the Proposed Disposal, to be tabled at the forthcoming EGM. He will also undertake to ensure that persons connected with him (if any) will abstain from voting on the resolution pertaining to the Proposed Disposal to be tabled at the forthcoming EGM. MGB has not transacted (not being a transaction within the ordinary course of business) with Encik Mohd Kamal bin Omar for the preceding twelve (12) months from the date of this Circular. MGB s Audit Committee, after taking into consideration all aspects of the Proposed Disposal, which include amongst others but not limited to the basis of arriving and justification for the Disposal Consideration, the rationale and financial effects of the Proposed Disposal as well as the evaluation of the Independent Adviser on the Proposed Disposal, is of the opinion that the terms of the Proposed Disposal (as a whole) are in the best interest of MGB, fair, reasonable and on normal commercial terms, and not detrimental to the interests of MGB s non-interested shareholders. The financial effects and other information on the Proposed Disposal as set out in the earlier announcements remain unchanged. 4

5 A copy of the Amended SPA is available for inspection at the Registered Office of MGB at 10-1, Jalan Sri Hartamas 8, Sri Hartamas, Kuala Lumpur, Wilayah Persekutuan during normal business hours from Monday to Friday (except state public holidays) for a period of not less than three (3) months from the date of this Announcement. This announcement is dated 15 February