DECLOUT LIMITED (Incorporated in the Republic of Singapore on 21 August 2010) (Company Registration No W)

Transcription

1 DECLOUT LIMITED (Incorporated in the Republic of Singapore on 21 August 2010) (Company Registration No W) PROPOSED ACQUISITION OF: (I) (II) THE INTERNET SERVICE PROVIDER BUSINESS OF PACNET INTERNET (S) PTE LTD; AND PACNET INTERNET (THAILAND) LIMITED. 1. INTRODUCTION The board of directors (the Directors or the Board ) of DeClout Limited (the Company, and together with its subsidiaries, the Group ) wishes to announce that: the Company s indirect subsidiary, OSINet Communications Pte. Ltd. ( OSINET ), had entered into an asset sale agreement dated 6 November 2015 (the ASA ) with Pacnet Internet (S) Pte Ltd (the Vendor ) to acquire certain assets (the Assets ) of the internet service provider ( ISP ) business presently carried on by the Vendor in Singapore (the Business ); and the Company s indirect subsidiary, Acclivis Technologies (Thailand) Limited ( Acclivis Thailand ), had entered into a share purchase agreement dated 6 November 2015 (the SPA, and together with the ASA, the Agreements ) with the Vendor to acquire the entire issued and paid-up share capital of Pacnet Internet (Thailand) Limited ( PITL, and such acquisition, the PITL ), for an aggregate consideration (the Consideration ) of approximately US$4.4 million (equivalent to approximately S$6.2 million 1 ) (collectively, the ). 2. INFORMATION ON THE ASSETS The Assets comprise: (iii) (iv) (v) (vi) relevant contracts entered into by the Vendor with its suppliers as at the date of the ASA in relation to its ISP business (the Supplier Contracts ); relevant contracts entered into by the Vendor with its customers as at the date of the ASA in relation to its ISP business (the Customers Contracts ); Pacific Internet trade marks in Singapore; Internal Protocol ( IP ) addresses; information technology equipment supplied to customers which are situated on the premises of such customers pursuant to the terms of the relevant Customers Contracts; and network equipment (the Fixed Assets ). Based on the unaudited financial statements of the Vendor as at 30 September 2015, the net book value of the Fixed Assets was approximately S$2,000. As at 30 September 2015, the Vendor has more than 2,000 customers. No independent valuation was conducted on the Assets. 1 Based on an exchange rate of U$1.00: S$1.40.

2 3. INFORMATION ON PITL AND THE VENDOR PITL is a company incorporated in Thailand in 1999, and has an issued and paid-up share capital of Baht 188,176,100 (equivalent to approximately S$7,527,000 2 ) comprising 1,881,761 shares. As at the date hereof, PITL is legally and beneficially owned by the Vendor, Pacific Digiway Limited ( Pacific Digiway, a wholly-owned subsidiary of the Vendor) and Mr. James Aloysius Fagan ( Mr. Fagan ), who hold 922,063 shares (approximately %), 959,693 shares ( %) and 5 shares (0.0003%), respectively. PITL s principal activity is the conduct of an ISP business in Thailand, and it holds the required licences for the conduct of such business in Thailand. Based on the unaudited consolidated financial statements of PITL and its subsidiary (the PITL Group ) for 9M2015, the net profit before tax of the PITL Group was approximately Baht 20.3 million (equivalent to approximately S$0.8 million 2 ), and the consolidated net tangible assets value of the PITL Group as at 30 September 2015 was approximately Baht 63.8 million (equivalent to approximately S$2.6 million 2 ). Based on the unaudited consolidated financial statements of the PITL Group for the financial year ended 31 December 2014 ( FY2014 ), the net profit before tax and the net profit after tax of the PITL Group were approximately Baht 16.5 million (equivalent to approximately S$0.6 million 2 ) and Baht 13.4 million (equivalent to approximately S$0.5 million 2 ) respectively. No independent valuation was conducted on the PITL Group. The Vendor is a wholly-owned subsidiary of Telstra Corporation Limited ( Telstra ), Australia s leading telecommunications company listed on the Australian Securities Exchange. The Vendor s principal activity is the conduct of an ISP business in Singapore and it holds the required licences for the conduct of such business in Singapore. None of the Vendor, Pacific Digiway nor Telstra is related to the Directors or controlling shareholders of the Company and their respective associates. 4. PRINCIPAL TERMS OF THE PROPOSED ACQUISITION 4.1 Consideration The Consideration comprises US$2.3 million (equivalent to approximately S$3.2 million 3 ) pursuant to the ASA; and US$2.1 million (equivalent to approximately S$3.0 million 3 ) (the PITL Purchase Price ) pursuant to the SPA. The Consideration shall be fully satisfied in cash. The Consideration was arrived at on a willing-buyer and willing-seller basis, after negotiations which were conducted at arm s length between the parties, and takes into account, inter alia, revenue to be generated by the Customers Contracts, the unaudited consolidated net profit after tax of the PITL Group for FY2014, the unaudited consolidated profit before tax of the PITL Group for 9M2015, as well as the current order book of the PITL Group. The Consideration shall be funded using a combination of internal resources of the Group and debt financing. 4.2 Completion Completion of the pursuant to the respective Agreements ( Completion ) will take place at the offices of the Vendor s solicitors after the last of their respective conditions precedent (as set out below) has been satisfied or waived (or at such other place, at such other time and/or on such other date as the relevant parties may agree) (the Completion Date ), provided always that if any of conditions precedent are not (or do not remain) either satisfied, or waived on or before 31 December 2015 (in the case of the SPA) or 14 January 2016 (in the case 2 Based on an exchange rate of Baht 25: S$1. 3 Based on an exchange rate of U$1.00: S$1.40.

3 of the ASA), the Agreements may be terminated by the relevant party at any time thereafter by giving written notice to the other party to the Agreements. 4.3 Conditions precedent Completion of the ASA is conditional upon the following: (iii) the execution by the relevant parties of a service agreement for the provision of certain telecommunications services by the Vendor (or an affiliate of the Vendor) to OSINET (or an affiliate of OSINET), and a transitional service agreement for the Vendor to provide or procure the provision of transitional services to OSINET; consent to the novation of certain key Supplier Contracts being obtained from the counterparties to those contracts; and regulatory approval from the Infocomm Development Authority of Singapore. Completion of the SPA is not conditional upon any conditions precedent. As at the date of this announcement, none of the above conditions precedent has been fulfilled. 5. RATIONALE FOR THE PROPOSED ACQUISITION The Board believes that the Assets and PITL to be acquired from the Vendor are synergistic and complementary to the existing business offerings of the Group. The key rationale for the are as follows: (iii) the Assets comprises, and PITL has, an established customer base and proven track record of revenue and profit; OSINET currently owns and operates an internet service provider business in Singapore and the of the Assets and PITL will allow the Group to expand its regional reach throughout South-East Asia, and its infrastructure and internet network connectivity services to better provide a full suite of end-to-end managed services; and with an enlarged customer base, the Group will be able to cross sell the different information-technology and telecommunication products of other subsidiaries in the Group. 6. FINANCIAL EFFECTS OF THE PROPOSED ACQUISITION The pro forma financial effects of the are presented for illustration purposes only and are not intended to reflect the actual future financial situation of the Group after the Completion. Such pro forma financial effects have been computed based on the following assumptions and bases: (a) (b) (c) (d) (e) the audited consolidated financial statements of the Group for FY2014; the unaudited consolidated financial statements of the PITL Group for FY2014; amortisation of intangible assets arising from the had not been taken into account; the Assets and PITL are acquired at fair value pursuant to the ; and expenses incurred in relation to the of approximately S$300,000.

4 For the avoidance of doubt, such pro forma financial effects do not take into account any corporate actions announced and undertaken by the Group subsequent to 1 January 2015; and any issuance of new ordinary shares in the capital of the Company ( Shares ) subsequent to 1 January Net tangible assets ( NTA ) per Share Assuming that the had been completed on 31 December 2014, the effect of the on the Group s NTA per Share as at 31 December 2014 would have been as follows: Before the After the NTA (1) of the Group (S$'000) 27,897 24,335 Number of Shares ( 000) 334, ,841 NTA per Share (S$ cents) Note: (1) NTA means total assets less the sum of total liabilities, non-controlling interest and intangible assets (net of non-controlling interest) Earnings per Share ( EPS ) Assuming that the had been completed on 1 January 2014, the effect of the on the Group s EPS for FY2014 would have been as follows: Before the After the Net profit attributable to shareholders of the Company for FY2014 (S$'000) 1,708 1,945 Weighted average number of Shares ( 000) 318, ,489 EPS (S$ cents) Gearing There is no material impact on the gearing ratio of the Group and the Company arising from the, as the Consideration is to be primarily funded by internal resources of the Group. 7. RELATIVE FIGURES UNDER RULE 1006 OF THE CATALIST RULES Based on the Group s latest announced unaudited consolidated financial statements for the six (6) months financial period ended 30 June 2015 ( HY2015 ) and the unaudited management accounts of the PITL Group for HY2015, the relative figures for the computed on the bases set out in Rule 1006 of the Singapore Exchange Securities Trading Limited Listing Manual Section B: Rules of Catalist (the Catalist Rules ) are as follows:

5 Rule 1006 (a) Bases Net asset value of the assets to be disposed of, compared with the Group s net asset value Relative figures Not applicable (b) Net profit attributable to the assets acquired, compared with the Group s 17.4% net profits (1) (c) (d) (e) Aggregate value of the consideration given or received, compared with the Company s market capitalisation based on the total number of issued shares excluding treasury shares (2) Number of equity securities issued as consideration for an acquisition, compared with the number of securities previously in issue Aggregate volume or amount of proved and probable reserves to be disposed of, compared with the aggregate of the Group s proved and probable reserves. This basis is applicable to a disposal of mineral, oil or gas assets by a mineral, oil and gas company, but not to an acquisition of such assets 6.2% Not applicable Not applicable Notes: (1) The Group s profit before tax for HY2015 was approximately S$1.66 million and the PITL Group s profit before tax for HY2015 was Baht 7.2 million (equivalent to approximately S$0.3 million 4 ). There was no profit attributable to the Assets. (2) The Company s market capitalisation of approximately S$99.4 million was computed based on the Company s existing issued and paid-up share capital of 474,367,530 Shares as at the date of this announcement and the volume weighted average price of S$ per Share on 6 November 2015, being the market day preceding the date of the Agreements (being 6 November 2015). Having regard to the above, as the relative figures computed on the bases set out in Rule 1006 of the Catalist Rules exceed 5% but do not exceed 75%, the constitutes a discloseable transaction under Rule 1010 of the Catalist Rules and read together with Rule 1006 of the Catalist Rules. 8. SERVICE CONTRACTS No person is proposed to be appointed as a Director in connection with the. Accordingly, no service contract is proposed to be entered into between the Company and any such person in connection with the. 9. INTERESTS OF DIRECTORS AND CONTROLLING SHAREHOLDERS None of the Directors or their respective associates has any interest, direct or indirect, in the, other than through their respective shareholding interests in the Company (if any). The Directors have not received any notification of interest in the from any controlling shareholders of the Company, and are not aware of any controlling shareholders of the Company who has any interest, direct or indirect, in the, other than through their respective shareholding interests in the Company. 4 Based on an exchange rate of Baht 25: S$1.

6 10. DOCUMENTS AVAILABLE FOR INSPECTION The Agreements are available for inspection during normal business hours from 9.00 a.m. to 5.00 p.m. at the registered office of the Company at 29 Tai Seng Avenue, #05-01 Natural Cool Lifestyle Hub, Singapore for a period of three (3) months from the date of this announcement. 11. ANNOUNCEMENTS Further announcements on the will be made in due course as and when appropriate. 12. DIRECTORS RESPONSIBILITY STATEMENT The Directors collectively and individually accept full responsibility for the accuracy of the information given in this announcement and confirm after making all reasonable enquiries that, to the best of their knowledge and belief, this announcement constitutes full and true disclosure of all material facts about the, the Company and its subsidiaries, and the Directors are not aware of any facts the omission of which would make any statement in this announcement misleading. Where information in this announcement has been extracted from published or otherwise publicly available sources or obtained from a named source, the sole responsibility of the Directors has been to ensure that such information has been accurately and correctly extracted from those sources and/or reproduced in this announcement in its proper form and context. 13. TRADING CAUTION Shareholders and potential investors of the Company are advised to read this announcement and any further announcements by the Company carefully. Shareholders of the Company are advised to refrain from taking any action in respect of their securities in the Company which may be prejudicial to their interests, and to exercise caution when dealing in the securities of the Company. In the event of any doubt, shareholders of the Company should consult their stockbrokers, bank managers, solicitors, accountants or other professional advisers. BY ORDER OF THE BOARD DECLOUT LIMITED Wong Kok Khun Chairman and Group Chief Executive Officer 7 November 2015 This announcement has been prepared by the Company and its contents have been reviewed by the Company s sponsor ( Sponsor ), Canaccord Genuity Singapore Pte. Ltd., for compliance with the relevant rules of the Singapore Exchange Securities Trading Limited (the SGX-ST ). The Sponsor has not independently verified the contents of this announcement. This announcement has not been examined or approved by the SGX-ST and the SGX-ST assumes no responsibility for the contents of this announcement, including the correctness of any of the statements or opinions made, or reports contained in this announcement. The contact person for the Sponsor is Ms. Alice Ng, Director and Head of Continuing Sponsorship, Canaccord Genuity Singapore Pte. Ltd. at 77 Robinson Road #21-02 Singapore , telephone (65)