POLARIS LTD. (previously known as CarrierNet Global Ltd.) Company Registration No D (Incorporated in the Republic of Singapore)

Transcription

1 POLARIS LTD. (previously known as CarrierNet Global Ltd.) Company Registration No D (Incorporated in the Republic of Singapore) FURTHER ANNOUNCEMENT ON THE PROPOSED ACQUISITION OF THE BUSINESS AND BUSINESS ASSETS OF JUZZ1 HOLDINGS (SINGAPORE) PTE. LTD. 1. INTRODUCTION The Board of Directors ( Board or Directors ) of Polaris Ltd. ( Company, and together with its subsidiaries, Group ) refers to the Company s announcement dated 29 April 2013 regarding the memorandum of understanding entered into by the Company and its whollyowned subsidiary, Polaris Network Pte. Ltd. ( Polaris Network ) on 29 April 2013 and is pleased to announce that the Company had on 30 May 2013 entered into a conditional assets sale and purchase agreement ( SPA ) with Juzz1 Holdings (Singapore) Pte. Ltd. ( Vendor ), Teo Ngee Hua ( Daniel Teo ) and Lee Jessie ( Jessie Lee ) (in their capacity as the shareholders and warrantors of the Vendor)(each, a Warrantor and collectively, Warrantors ) and Polaris Network, for the purchase by the Company of all of the Vendor s business and business assets together with goodwill of such business as a going concern which shall be transferred to Polaris Network ( Proposed ). The Warrantors join with the Vendor in giving certain representations, warranties and undertakings on a joint and several basis under the SPA. The Vendor is a private limited company incorporated in the Republic of Singapore and is engaged in the retail sale of computer hardware and accessories, and computer software business. Except that Jessie Lee has been appointed as a director of Polaris Network, the Vendor and its shareholders, Daniel Teo and Jessie Lee are independent third parties and are not directly or indirectly related to the Company, the Directors, controlling shareholders of the Company, or their respective associates. 2. PROPOSED ACQUISITION 2.1 Details of the Proposed Pursuant to the SPA, the Company will acquire as a going concern the business of retail sale of computer hardware and accessories, and computer software carried on by the Vendor ( Business ) and certain business assets, including, amongst others, inventory, equipment, contracts, trade receivables, know-how, goodwill of such business and rights under certain leases, tenancies and licences of 7 retail shops located in retail malls, namely, Funan DigitaLife Mall (5 retail shops) and Parkway Parade(1 retail shop) and at 777, Jurong Gateway, Singapore (1 retail shop) as set out in the SPA ( Business Assets ) at which the Vendor carries out the Business (collectively, Business and Business Assets ) and assume certain trade accounts payable ( Assumed Liabilities ) as set out in the SPA but excluding certain liabilities as set out in the SPA. Subject to the completion ( Completion ) of the Proposed, the Business and Business Assets shall be transferred to Polaris Network and Polaris Network will assume the obligation and responsibility to carry on the Business as a going concern. The Completion is expected to take place on 20 June 2013 (being 15 th business day after the SPA) ( Completion Date ) save that the parties may mutually defer the Completion Date to a later date or terminate the SPA in accordance with its terms. 1

2 2.2 Consideration The total consideration for sale and purchase of the Business and the Business Assets shall be the sum of S$5,000,000 (subject to the adjustment mechanism set out in the SPA) ( Total Purchase Price ) and was arrived at following arms length negotiation between the Company and the Vendor, on a willing buyer willing seller basis, taking into account, inter alia, the track record of the Vendor, its customers and suppliers base and relationship, its financial statements and position, the results of financial due diligence undertaken by Ernst and Young LLP which was engaged by the Company for this purpose and the Company s assessment of the business and prospects of the Vendor (including synergy with the existing business of the Group). Subject to the terms and conditions of the SPA, the Total Purchase price shall be satisfied by the Company partly in cash and partly by way of allotment and issue of new ordinary shares to the Vendor in the following manner: (i) (ii) (iii) within five (5) days from the Completion Date, the Company shall pay the Vendor S$2,000,000 (being 40% of the Total Purchase Price) by way of allotment and issue of 81,967,213 ordinary shares ( Consideration Shares ) in the share capital of the Company, at an issue price ( Issue Price ) of S$ per Consideration Share (which represents a discount of approximately 9.63% the volume weighted average price for trades done on the Singapore Exchange Securities Trading Limited ( SGX- ST ) on 30 May 2013, being the full market day on which the SPA is signed), credited as fully paid, to the Vendor. The Consideration Shares will be issued pursuant to general mandate obtained at the annual general meeting ( AGM ) of the Company held on 29 April 2013 and be subject to a moratorium for 12 months after the Completion. The Consideration Shares will represent approximately 2.39% of the total number of shares of the Company in the enlarged issued share capital of the Company upon completion of the allotment and issuance of the Consideration Shares. The Consideration Shares, when issued, shall rank pari passu in all respects with the existing ordinary shares ( Shares ) of the Company; within five (5) days from the Completion Date, the Company shall pay the Vendor S$1,500,000 (being 30% of the Total Purchase Price) ( Cash Consideration ) in cash provided that the net asset value (Business Assets less Assumed Liabilities) of the Business has an aggregate value of no less than S$2,800,000 based on the unaudited management accounts of the Vendor as at 31 May 2013 and subject to the adjustment mechanism pegged to the results of a joint physical stock-take exercise to be carried out by the Company and the Vendor as set out in the SPA. the balance of S$1,500,000 of the Total Purchase Price ( Deferred Payment ) (being 30% of the Total Purchase Price) is deferred and payable in tranches if certain agreed net profit after tax thresholds for each relevant period commencing the year of the Completion Date up to the year of 2016 has been achieved. 2.3 Payment of the Consideration The Total Purchase Price will be funded through the Company s internal cash resources and/or external borrowings and by the allotment and issue of the Consideration Shares by the Company. 2.4 Conditions precedent 2

3 Completion of the Proposed shall be subject to the fulfilment (unless otherwise waived by the in accordance with the terms of the SPA) of all the following conditions precedent ( Conditions Precedent ): (i) (ii) (iii) (iv) (v) (vi) (vii) (viii) (ix) the Company being satisfied with the financial due diligence on the Business and the Business Assets; receipt by Polaris Network of such waivers or consents as may be necessary to enable Polaris Network to own and operate the Business in the same or substantially the same manner that it was being operated prior to the execution of the SPA (including any consent being given by the landlord of the Leased Retail Shops in respect of an assignment or novation of thereto); all other consents and approvals required under any and all applicable laws for the Proposed under the SPA being obtained and where any consent or approval is subject to conditions, such conditions being satisfactory to Polaris Network or the Company, in their sole discretion; all representations and warranties of the Vendor and the Warrantors in respect of the Business and the Business Assets shall be true, correct and complete in all material respects as of the Completion Date as though made at such date with reference to the facts and circumstances existing at such time; no order or judgment of any court or governmental, statutory or regulatory body having the effect of making unlawful or otherwise prohibiting the transactions under the SPA and any related transactions as may be required in relation thereto and to the sale and transfer of the Business and the Business Assets to the Company and Polaris Network or otherwise restricting/limiting the Business shall have been issued or made on or prior to the Completion Date; there shall not have been any changes, whether individually or in the aggregate that have had or can reasonably be expected to have a material adverse effect on the financial condition, results, operations or prospect of the Business; the approval-in-principle of the SGX-ST being granted for the listing of and quotation for the Consideration Shares on the Catalist; the entry into new employment contracts by certain employees of the Vendor as may be identified by Polaris Network at its sole discretion; and the entry into new service contracts by Daniel Teo and Jessie, respectively with Polaris Network on such terms and conditions and in such form being acceptable to the Company. Subject to the terms and conditions of the new service contracts to be entered into by Polaris Network, Daniel Teo will be employed as a general manager of Polaris Network while Jessie Lee will be appointed as a director of Polaris Network, both for a period of three years from their employment date and their remuneration package will include a basic salary, allowances and variable performance bonus. It is noted that as of the date of this Announcement, Ms Jessie Lee has already been appointed director of Polaris Network in anticipation of the completion of the Proposed. Save as disclosed above, there is no service contract with any director or any person proposed to be appointed as a director of the Company and its subsidiaries in connection with the Proposed. 3

4 3. FINANCIAL EFFECTS OF THE PROPOSED ACQUISITION 3.1 As at the date of this announcement, the issued and paid-up ordinary share capital of the Company is approximately S$87,769,299 comprising 3,350,878,766 Shares. When completed and assuming that all the 81,967,213 Consideration Shares are issued, the existing issued and paid-up Share capital of the Company will be increased by approximately 5.70% to approximately S$92,769,299 comprising 3,432,845,979 Shares. 3.2 For illustrative purpose only, the financial effects of the Proposed set out below have been prepared based on the audited consolidated financial statements for the Group for the financial year ended 31 December 2012 ( FY2012 ) and subject to the following assumptions: (i) (ii) the effects of the transaction on the earnings per share ( EPS ) of the Group shown below is on the assumption that the transaction had been completed at the beginning of FY2012; and the effects of the transaction on the net tangible assets ( NTA ) per share of the Group shown below is on the assumption that the transaction had been completed at the end of FY2012. The effect of the Proposed on the EPS of the Group is as follows: Before the Proposed After the Proposed Net profit after tax (S$ 000) 3,197 3,802 Number of Shares ( 000) 2,325,879 2,407,846 EPS (cents) S$0.14 S$0.16 The effect of the Proposed on the NTA per share of the Group is as follows: Before the Proposed After the Proposed NTA (S$ 000) 6,217 11,217 Number of Shares ( 000) 2,325,879 2,407,846 NTA per Share (cents) S$0.27 S$ RATIONALE FOR THE PROPOSED ACQUISTION The Board considers that the Proposed, in line with the Group s business strategy and expansion plan, will offer a good opportunity to the Group to broaden its business and revenue base in the future. The Board also considers the Proposed is beneficial to the Company and its shareholders as a whole. 5. INTERESTS OF DIRECTORS AND CONTROLLING SHAREHOLDERS None of the Directors or Controlling Shareholders of the Company has any interest, direct or indirect, in the Proposed, other than through their respective shareholdings in the Company. 4

5 6. RELATIVE FIGURES COMPUTED ON THE BASES SET OUT IN RULE 1006 OF THE CATALIST RULES The Proposed constitutes a discloseable transaction under Rule 1010 of the SGX- ST Listing Manual Section B: Rules of Catalist ( Catalist Rules ) but does not require shareholders approval as the relative figure computed based on the bases set out below exceeds 5%, but does not exceed 75% under Rules 1008 and 1014 respectively. Rule Bases (A) (B) Relative Figures 1006(a) The net asset value of the assets to be disposed of as noted under column (A), compared with the Group s net asset value as noted under column (B) Not applicable Not applicable Not applicable 1006(b) 1006(c) 1006(d) 1006(e) The net profits attributable to the assets acquired for the financial period 1 March 2011 to 31 July 2012 as noted under column (A), compared with the Group s net profits for the financial year ended 31 December 2012 as noted under column (B) The aggregate value of the consideration given as noted under column (A), compared with the Company s market capitalisation as at 29 May 2013 being the market day preceding the date of SPA as noted under column (B) The number of equity securities issued by the Company as consideration for an acquisition as noted under column (A), compared with the number of equity securities previously in issue as at 29 May 2013 as noted under column (B) The aggregate volume or amount of proven and probable reserves to be disposed of, compared with the aggregate of the Group s proven 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 S$605,076 S$3,197, % S$5,000,000 S$90,473, % 81,967,213 3,350,878, % Not applicable Not applicable Not applicable 7. VALUE ATTRIBUTABLE TO THE BUSINESS AND BUSINESS ASSETS Based on the audited financial statements of the Vendor for the financial period ended 01 March 2011 to 31 July 2012: (a) (b) (c) the book value and net tangible asset value of the Business Assets to be acquired as at 31 July 2012 were approximately S$2,538,651 and S$2,538,651, respectively; there is no open market value for assets to be acquired; and the net profits attributable to the assets to be acquired amounts to approximately S$605, ADDITIONAL LISTING APPLICATION The Company will be making an additional listing application to the SGX-ST through the Sponsor for the listing and quotation of the Consideration Shares on Catalist in due course. 5

6 The Company will keep shareholders duly informed upon the receipt of listing and quotation notice from the SGX-ST. The Consideration Shares will not be placed to any person who is a Director or a substantial shareholder of the Company or any other person who falls within the categories set out in Rule 812(1) of the Catalist Rules. 9. DOCUMENTS FOR INSPECTION A copy of the SPA is available for inspection during normal business hours at the registered office of the Company at 81, Ubi Avenue 4, #03-11 Singapore for a period of three (3) months commencing from the date of this announcement. 10. 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 Proposed, 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. By Order of the Board Ang Chuan Hui, Peter Executive Director & CEO Date: 30 May 2013 This announcement has been prepared by the Company and reviewed by the Company s sponsor, Stamford Corporate Services Pte. Ltd. ("Sponsor"), for compliance with the Singapore Exchange Securities Trading Limited ("SGX-ST") Listing Manual Section B: Rules of Catalist. The Sponsor has not verified the contents of this announcement including the accuracy or completeness of any of the information disclosed or the correctness of any of the statements or opinions made or reports contained in this announcement. This announcement has not been examined or approved by the SGX-ST. The Sponsor and the SGXST assume 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 Mr. Yap Wai Ming. Telephone number: (65) waiming.yap@stamfordlaw.com.sg 6