BERJAYA CORPORATION BERHAD ( BCORP OR COMPANY )

Transcription

1 BERJAYA CORPORATION BERHAD ( BCORP OR COMPANY ) PROPOSED ACQUISITIONS OF 12.00% EQUITY INTEREST IN BERJAYA LAND BERHAD FOR A PURCHASE CONSIDERATION OF RM MILLION TO BE SATISFIED BY THE ISSUANCE OF RM MILLION NOMINAL VALUE OF IRREDEEMABLE CONVERTIBLE UNSECURED LOAN STOCKS TOGETHER WITH MILLION FREE DETACHABLE WARRANTS IN BCORP AND REMAINING RM65.86 MILLION IN CASH 1. INTRODUCTION On behalf of the Board of Directors of BCorp ( Board ), Maybank Investment Bank Berhad ( Maybank IB ) wishes to announce that BCorp and Juara Sejati Sdn Bhd ( JSSB ), a wholly-owned subsidiary of BCorp, have today entered into separate conditional share sale agreements ( SSAs ) with Tan Sri Dato Seri Vincent Tan Chee Yioun ( TSVT ) and Penta Investment Advisers Limited ( Penta ) (collectively, the Vendors ) to acquire a total of million ordinary shares of RM0.50 each in Berjaya Land Berhad ( BLand ) ( BLand Shares ), representing 12.00% equity interest in BLand for a total purchase consideration of RM million or RM0.70 per BLand Share ( Proposed Acquisition ). The purchase consideration will be satisfied by the issuance of RM million 10-year 2% Irredeemable Convertible Unsecured Loan Stocks ( New ICULS ) at 100% of its nominal value together with million free detachable warrants in BCorp ( New Warrants ) and remaining RM65.86 million in cash ( Cash Consideration ). The New ICULS and New Warrants are collectively referred to as Consideration Securities. As at 18 November 2015 ( LPD ), BCorp and its subsidiaries ( BCorp Group ) hold a total of 3.15 billion BLand Shares, representing approximately 63.05% of the issued and paid-up share capital of BLand (excluding million treasury shares) ( BLand Voting Shares ). Upon completion of the Proposed Acquisition, the BCorp Group will hold a total of 3.74 billion BLand Shares, representing approximately 75.05% of the BLand Voting Shares. 2. DETAILS OF THE PROPOSED ACQUISITION 2.1 Background information on the Proposed Acquisition The Proposed Acquisition entails the acquisitions by JSSB of million BLand Shares from each of the Vendors, or an aggregate of million BLand Shares representing 12.00% equity interest in BLand for a total purchase consideration of RM million or RM0.70 per BLand Share, to be satisfied by the issuance of the Consideration Securities and the Cash Consideration. The Proposed Acquisition is subject to the terms and conditions of the SSAs. As the Consideration Securities will be listed on the Main Market of Bursa Malaysia Securities Berhad ( Bursa Securities ), there must be at least 100 holders holding not less than one (1) board lot each of the respective securities and TSVT intends to distribute board lots of such New ICULS and New Warrants to be held by him without any consideration to enable their listing. An application will be made to Bursa Securities for the admission, listing of and quotation for the Consideration Securities as well as the listing of and quotation for the new ordinary shares of RM1.00 each in BCorp ( BCorp Shares ) to be issued upon conversion/exercise of the Consideration Securities on Bursa Securities. The salient terms of the New ICULS and New Warrants are set out in Table 1 and Table 2 of the Appendix of this Announcement respectively. 1

2 For avoidance of doubt, the New ICULS do not constitute part of the existing RM year 5% irredeemable convertible unsecured loan stocks 2012/2022 series of the Company constituted by the trust deed dated 6 March 2012 ( ICULS 2012/2022 ). The New Warrants also do not constitute part of the existing warrants 2012/2022 series of the Company constituted by the deed poll dated 6 March 2012 ( Warrants 2012/2022 ). 2.2 Background information on BLand BLand was incorporated in Malaysia on 31 July 1990 under the Companies Act 1965 ( Act ) under the name of Sports Toto Holdings Berhad. BLand changed its name to Berjaya Leisure Berhad on 25 September 1991 and assumed its present name on 20 May BLand was listed on the Main Board (now known as Main Market) of Bursa Securities on 15 March BLand and its subsidiaries ( BLand Group ) are involved in property development and investment in properties, development and operation of hotels and resorts, vacation time share, water theme park, operating of a casino, leasing of online lottery equipment and provision of software support, manufacture and distribution of computerised lottery and voting systems, motor retailer and provision of aftersales services, investment holding and the operation of Toto betting under Section 5 of the Pool Betting Act, As at the LPD, the issued and paid-up share capital of BLand is RM2,500,168,552 comprising 5,000,337,104 BLand Shares, with 10,943,104 BLand Shares held as treasury shares. A summary of the audited financial results of the BLand Group is as follows: Financial year ended ( FYE ) 30 April (RM million) (RM million) Profit before tax * Profit/(Loss) after tax and minority interests (383.0) ( PATAMI )/( LATAMI ) Net assets ( NA ) 5, ,924.6 Note: * Includes a non-cash impairment of goodwill relating to gaming cash generating units amounting to RM million, impairment in value of investment in associated companies of RM17.30 million, impairment in value of investment property of RM22.25 million and impairment in value of property, plant and equipment of RM19.21 million, totaling RM million. [The rest of this page has been intentionally left blank] 2

3 Based on the Register of Substantial Shareholders as at the LPD, the substantial shareholders of BLand and their respective shareholdings are as follows: Direct No. of BLand Shares % Indirect No. of BLand Shares % Teras Mewah Sdn Bhd 1,296,624, JSSB 642,965, ,879,612 (1) 8.3 Bizurai Bijak (M) Sdn Bhd 659,100, ,352,612 (2) 5.5 Berjaya Capital Berhad ,352,612 (3) 5.5 Berjaya Group Berhad 23,030, ,013,569,596 (4) 60.4 BCorp 109,084, ,036,599,596 (5) 60.9 TSVT 389,595, ,269,485,072 (6) 65.5 Penta 299,363, John Zwaanstra ,363,000 (7) 6.0 Notes: (1) Deemed interested by virtue of its interests in Berjaya Capital Berhad and Berjaya Assets Berhad, the holding company of Sublime Cartel Sdn Bhd and Berjaya Times Square Sdn Bhd. (2) Deemed interested by virtue of its interest in Berjaya Capital Berhad. (3) Deemed interested by virtue of its interests in Berjaya Sompo Insurance Berhad, Prime Credit Leasing Sdn Bhd, Inter-Pacific Securities Sdn Bhd, Inter-Pacific Capital Sdn Bhd and Rantau Embun Sdn Bhd. (4) Deemed interested by virtue of its 100% interests in Teras Mewah Sdn Bhd, JSSB, Bizurai Bijak (M) Sdn Bhd and its interests in its related companies, namely Prime Credit Leasing Sdn Bhd, Inter-Pacific Securities Sdn Bhd, Inter-Pacific Capital Sdn Bhd and Rantau Embun Sdn Bhd as well as its interests in Berjaya Sompo Insurance Berhad, Berjaya Times Square Sdn Bhd and Sublime Cartel Sdn Bhd. (5) Deemed interested by virtue of its 100% interest in Berjaya Group Berhad. (6) Deemed interested by virtue of his interests in BCorp, Hotel Resort Enterprise Sdn Bhd ( HRE ), B & B Enterprise Sdn Bhd, Berjaya VTCY Sdn Bhd, Berjaya Assets Berhad (the holding company of Berjaya Times Square Sdn Bhd and Sublime Cartel Sdn Bhd) and HQZ Credit Sdn Bhd (the ultimate holding company of Desiran Unggul Sdn Bhd and Premier Merchandise Sdn Bhd). (7) Deemed interested by virtue of his interest in Penta. [The rest of this page has been intentionally left blank] 3

4 The directors of BLand and their shareholdings in BLand as at the LPD are as follows: Designation Direct No. of BLand Shares % Indirect No. of BLand Shares % Tan Sri Datuk Seri Razman Md Hashim Bin Che Din Md Hashim Dato Ng Sooi Lin Chairman/Independent Non-Executive Director Chief Executive Officer/ Executive Director ,000 * - - Tan Thiam Chai Executive Director 40,000 * - - Phan Yoke Seng Executive Director Dato Dickson Tan Yong Loong ( Dato Dickson ) Datuk Robert Yong Kuen Loke ( Datuk Robert ) Note: * Negligible. Non-Independent Non- Executive Director Independent Non- Executive Director , Background information on the Vendors TSVT Penta TSVT, aged 63, is a major shareholder of BCorp. Penta was incorporated in the British Virgin Islands on 14 April 1998 under the International Business Companies Act (Cap 291). Penta is an Asian-based investment adviser and invests in the public equity markets of Asia and employs long short equity strategy to make its investments. As at the LPD, the total paid-in capital of Penta is USD1,250,000. Penta is wholly owned by Mr John Zwaanstra and the directors of Penta are Mr John Zwaanstra and Mr Todd Zwaanstra. [The rest of this page has been intentionally left blank] 4

5 2.4 Salient terms of the SSAs The salient terms of the SSAs are summarised as follows: (a) (b) (c) the BLand Shares will be acquired by JSSB free from all encumbrances and with all attached or accrued rights on completion date; on the completion date, Penta and TSVT shall each receive cash consideration of RM32.93 million and Penta and TSVT and/or his nominees shall be allotted and issued with million New ICULS together with million New Warrants respectively; the SSAs are conditional on the following being satisfied or waived on or before six (6) months from the date of the SSAs or such other date as may be mutually agreed between the parties in writing: (i) (ii) (iii) the approvals set out in Section 7 of this Announcement being obtained; the conditional shares sale agreement ( SSA ) entered into between TSVT, JSSB and BCorp shall be conditional upon the execution and signing of the SSA between Penta, JSSB and BCorp ( Penta SSA ) and vice versa; with regards to the Penta SSA: (aa) (bb) JSSB being reasonably satisfied with the legal opinions issued by a foreign counsel appointed by Penta confirming, among others, the enforceability and validity of the Penta SSA against Penta under the laws of any country or jurisdiction which JSSB is subject to; and a director resolution of Penta being passed approving the disposal by Penta of the BLand Shares under the Penta SSA, the Penta SSA as well as the transactions and matters contemplated by it; (d) (e) (f) the completion of the SSAs shall be within ten (10) business days after satisfying the conditions set out in Section 2.4(c) above or any other date as may be mutually agreed in writing between the parties; the completion of the SSAs shall take place simultaneously and JSSB is not obliged to complete any of the SSAs if completion of the other SSA does not take place; and if a party shall for any reason be unable to comply with its obligations stipulated under the SSAs, the non-defaulting party shall be entitled to: (i) (ii) (iii) defer the completion date to a date not more than 30 business days from the initial completion date; elect to enforce the provisions of the SSA by way of specific performance of the terms of the SSA against the defaulting party; or rescind the SSA. 5

6 2.5 Basis and justification for the purchase consideration for the Proposed Acquisition The purchase consideration of RM million or RM0.70 per BLand Share was arrived at on a willing-buyer willing-seller basis after taking into consideration the following: (i) (ii) (iii) (iv) last traded price of BLand Shares on 1 December 2015, being the last full trading day prior to the date of this Announcement of RM0.70; 12-month volume-weighted average market price ( VWAP ) of BLand Shares up to and including 1 December 2015 of RM0.7209; audited consolidated NA of BLand as at 30 April 2015 of RM4.92 billion (or RM0.99 per BLand Share); and prospects of the BLand Group as set out in Section 4 of this Announcement. The purchase consideration of RM0.70 per BLand Share represents the following: (i) the last traded price of BLand Shares on 1 December 2015 of RM0.70; (ii) discount of 2.90% to the 12-month VWAP of BLand Shares up to and including 1 December 2015 of RM0.7209; and (iii) price-to-book ratio of approximately 0.71 times based on the audited consolidated NA per BLand Share as at 30 April 2015, which indicates that the BLand Shares are trading at a discount to the NA of the BLand Group. 2.6 Liabilities to be assumed JSSB will not assume any liabilities, including contingent liabilities and guarantees, pursuant to the Proposed Acquisition. 2.7 Original cost of investment TSVT s investment in the million BLand Shares was made since 1996 at a total cost of RM million or an average of RM0.57 per BLand Share. Penta s investment in the million BLand Shares was made between 2007 and 2015 at a total cost of RM million or an average of RM0.91 per BLand Share. 2.8 Source of funding The Cash Consideration will be funded through borrowings. 2.9 Basis and justification for the issue price for the New ICULS and exercise price for the New Warrants The New ICULS shall be issued at RM1.00 nominal value per New ICULS, being 100% of its nominal value. The conversion price of the New ICULS is RM1.00 for every one (1) new BCorp Share, being the par value of BCorp Shares. The conversion price of the New ICULS of RM1.00 was arrived at after taking into consideration the minimum issue price allowable under the Act for the new BCorp Shares arising from the conversion of the New ICULS, which is no less than the par value of the BCorp Shares of RM

7 The exercise price of the New Warrants is RM1.00 for every one (1) new BCorp Share, being the par value of BCorp Shares. The exercise price of the New Warrants of RM1.00 was arrived at after taking into consideration the minimum issue price allowable under the Act for the new BCorp Shares arising from the exercise of the New Warrants, which is no less than the par value of the BCorp Shares of RM Ranking and status of the new BCorp Shares The new BCorp Shares to be issued upon conversion of the New ICULS and/or exercise of the New Warrants shall, upon allotment and issuance, rank pari passu in all respects with the existing BCorp Shares except that they shall not be entitled to any dividend, right, allotment and/or other distribution, the entitlement date of which is prior to the allotment date of the new BCorp Shares to be issued upon conversion of the New ICULS and/or exercise of the New Warrants Proceeds from exercise of the New Warrants The quantum of proceeds arising from the exercise of the New Warrants is dependent upon the actual number of the New Warrants exercised. The proceeds from the exercise of the New Warrants will be utilised as working capital for the BCorp Group at the relevant point in time. No proceeds will be raised from the conversion of the New ICULS as the conversion will not require any cash payment by the holders of the New ICULS and will be wholly satisfied through the surrender of the New ICULS with an aggregate nominal value equivalent to the conversion price. 3. RATIONALE AND BENEFITS OF THE PROPOSED ACQUISITION The Proposed Acquisition enables the BCorp Group to further increase its equity interest in BLand at a reasonable value as the Board believes that there are potential capital appreciation in the properties held by the BLand Group. In addition, the favourable prospects of the BLand Group as discussed in Section 4 of this Announcement, in particular the on-going property development projects are expected to contribute positively to the future earnings of the BCorp Group. The issuance of the Consideration Securities will minimise any immediate cash outflow. In addition, any conversion of the New ICULS and/or exercise of New Warrants will further strengthen BCorp s capital base, improve its gearing as well as improve the liquidity of the BCorp Shares. 4. PROSPECTS OF THE BLAND GROUP The overall outlook for the global tourism industry is expected to be challenging amid geopolitical instability and weaker economic growth in certain regions. On the domestic front, the overall outlook of the hotel industry is expected to slow down following the downtrend in the global tourism industry. Notwithstanding this challenging backdrop, the local hotel industry is expected to benefit from the ongoing promotional activities by Tourism Malaysia and together with the BLand Group s aggressive marketing strategy and diverse distribution channels, the BLand Group expects its hotels and resorts businesses in Malaysia which are well-positioned to weather these challenges to continue to improve its average room rate and revenue per available room. 7

8 The property development business segment of the BLand Group is primarily involved in the development of the BLand Group s land bank locally and abroad. The local property market outlook is expected to be challenging due to weaker buyer sentiment amid tighter lending guidelines and weaker economic environment. The residential property sector, however, will remain as the main driving force of the property market gravitating towards more affordable properties in line with the government s effort to promote first time home ownership among young buyers. Against this scenario, demand for BLand Group s residential properties will remain strong especially developments at strategically located areas at Bukit Jalil which has close proximity to urban public transportation systems such as the existing Ampang Line Light Rail Transit and the upcoming systems the proposed Mass Rapid Transit and Light Rail Transit extension lines. Despite stiff competition arising from the growing number of complexes at various locations within the Klang Valley, the BLand Group s complexes in the Golden Triangle are expected to remain resilient supported by high occupancy rates driven by its strategic locations. On the international front, development project in Hebei, China is still under construction while the luxurious Four Seasons Hotel project in Kyoto, Japan is progressing on schedule and is expected to be completed by mid The property market sentiment in Vietnam remains weak. The number forecast operators business under Berjaya Sports Toto Berhad ( BToto ), a listed subsidiary of BLand, is expected to be challenging for the financial year ending 30 April 2016 due to the Malaysia s rising costs of living coupled with the implementation of the Goods and Services Tax with effect from 1 April 2015 which have affected consumers spending sentiments. However, BToto is expected to maintain its market share in the number forecast operators business with its extensive network of outlets in Malaysia. In the United Kingdom, its motor retailing business is operated by H.R. Owen, a luxury motor retailer with a number of vehicle dealerships in the prestige and specialist car market for both sales and aftersales, predominantly in London. Trading has started strongly this year and should continue throughout the remainder of The trading results for the year ending 30 April 2016 would likely exceed those for the year ended 30 April Sources: (1) BToto Annual Report 2015 (2) BLand Annual Report 2015 The BLand Group intends to focus on its hotel, resort and recreation operations in the Asia Pacific region and continue with its effort on expanding and upgrading existing properties, developing new hotels and resorts in the Asia Pacific region whilst considering the potential disposal of properties located in Seychelles, Indian Ocean. The BLand Group also intends to focus on the residential property market by developing its existing landbank in Malaysia into bungalow lots, condominiums and landed properties while maintaining a healthy number of commercial properties. In addition, BToto may seek to introduce additional terminals and new games. The Board believes that the increased contribution from the motor retailing business coupled with the satisfactory performance of the hotels and resorts business as well as property development business would augur well for the prospects of the BLand Group. In addition, the Board believes that the potential boost in domestic tourism and property sector following the weakening ringgit would also benefit the BLand Group in the future. 8

9 5. RISK FACTORS RELATING TO THE PROPOSED ACQUISITION Prior to the Proposed Acquisition, BLand is already a subsidiary of BCorp. Accordingly, the Board does not foresee any material change to the risk profile of the BCorp Group s business as a consequence of the Proposed Acquisition. However, the risk factor associated with the Proposed Acquisition, which is by no means exhaustive, is the non-completion of the Proposed Acquisition. The completion of the Proposed Acquisition is subject to the conditions precedent set out in Section 2.4(c) of this Announcement, some of which may be beyond the control of BCorp. Accordingly, there can be no assurance that the Proposed Acquisition can be completed. In the event any of those conditions precedent is not fulfilled and/or waived, the SSAs will have to be terminated. 6. EFFECTS OF THE PROPOSED ACQUISITION 6.1 Issued and paid-up share capital For illustrative purposes, the proforma effect of the Proposed Acquisition on the issued and paid-up share capital of BCorp as at the LPD is as follows: No. of BCorp Shares ( 000) As at the LPD 4,652,463 Less: Treasury shares (182,000) Total voting BCorp Shares 4,470,463 To be issued upon full conversion of the ICULS 2012/ ,715 5,136,178 To be issued assuming full exercise of the Warrants 2012/ ,086 5,836,264 To be issued pursuant to the Proposed Acquisition - Assuming full conversion of the New ICULS 353,248 - Assuming full exercise of the New Warrants 706,497 Enlarged issued and paid-up share capital with voting rights 6,896,009 [The rest of this page has been intentionally left blank] 9

10 6.2 Substantial shareholders shareholdings The Proposed Acquisition is not expected to have any immediate effect on the substantial shareholders shareholdings until such time when the New ICULS are converted and/or the New Warrants are exercised into new BCorp Shares, the potential effect of which is also dependent on the issued and paid-up share capital of the Company at the relevant point in time. For illustrative purposes, the proforma effect of the Proposed Acquisition on the shareholdings of the substantial shareholders of BCorp as at the LPD is as follows: (I) As at the LPD After the Proposed Acquisition Direct Indirect Direct Indirect No. of No. of BCorp Shares BCorp Shares ( 000) (%) ( 000) (%) No. of BCorp Shares ( 000) (%) No. of BCorp Shares ( 000) (%) TSVT 1,035, ,042,508 (1) ,035, ,042,508 (1) HRE 605, , Dato Sri Robin Tan 2, ,618 (2) , ,618 (2) Yeong Ching ( Dato Sri Robin Tan ) Penta John Zwaanstra (II) After (I) and assuming full conversion/exercise of ICULS 2012/2022 and Warrants 2012/2022 (III) After (II) and assuming full conversion/exercise of New ICULS and New Warrants Direct Indirect Direct Indirect No. of BCorp Shares ( 000) (%) No. of BCorp Shares ( 000) (%) No. of BCorp Shares ( 000) (%) No. of BCorp Shares ( 000) (%) TSVT 1,402, ,350,120 (1) ,932,154 (3) ,350,120 (1) HRE 779, , Dato Sri Robin Tan 7, ,676 (2) , ,676 (2) Penta , John Zwaanstra ,873 (4)

11 Notes: (1) Deemed interested by virtue of his interests in HRE, Nostalgia Kiara Sdn Bhd, Superior Structure Sdn Bhd, Ascot Sports Sdn Bhd, Berjaya Assets Berhad (the holding company of Berjaya Times Square Sdn Bhd and Sublime Cartel Sdn Bhd), Berjaya Media Berhad (the holding company of Gemtech (M) Sdn Bhd), B & B Enterprise Sdn Bhd (the holding company of Lengkap Bahagia Sdn Bhd and Nautilus Corporation Sdn Bhd) and HQZ Credit Sdn Bhd (the ultimate holding company of Desiran Unggul Sdn Bhd, Premier Merchandise Sdn Bhd and Berjaya Infrastructure Sdn Bhd), and his deemed interest in Berjaya Sompo Insurance Berhad. (2) Deemed interested by virtue of his interests in HRE and Ascot Sports Sdn Bhd. (3) Assuming TSVT distributes an aggregate of 10,000 New ICULS together with 10,000 detachable New Warrants or 100 New ICULS and 100 detachable New Warrants to each of the 100 persons to be identified without any consideration. (4) Deemed interested by virtue of his interest in Penta. [The rest of this page has been intentionally left blank] 11

12 6.3 Earnings and earnings per BCorp Share ( EPS ) The Proposed Acquisition is not expected to have any material effect on the earnings of the BCorp Group. However, the Proposed Acquisition will dilute the EPS of the BCorp Group for the financial year ending 30 April 2016 as the EPS is calculated in accordance to the requirements of Financial Reporting Standard ( FRS ) 133: Earnings Per Share whereby FRS 133 deems the New ICULS as mandatorily convertible instrument which is included as part of the share base for the calculation of EPS. Notwithstanding this, barring unforeseen circumstances, the Proposed Acquisition is expected to contribute positively to the future earnings of the BCorp Group in the medium to long term with the higher contribution expected from the BLand Group as a consequence of the higher equity stake held in BLand. However, any potential increase in the PATAMI of the BCorp Group that may be derived from the BCorp Group s increased shareholding in BLand pursuant to the Proposed Acquisition will be reduced by the interest expense in relation to the New ICULS. [The rest of this page has been intentionally left blank] 12

13 6.4 NA per BCorp Share and gearing For illustrative purposes, based on the latest audited consolidated statements of financial position of BCorp as at 30 April 2015 and on the assumption that the Proposed Acquisition had been effected on that date, the proforma effect of the Proposed Acquisition on the NA per BCorp Share and gearing of the BCorp Group is as follows. (I) (II) (III) (IV) After (II) and assuming full conversion/ exercise After (I) and the of ICULS 2012/2022 Proposed and Warrants Acquisition 2012/2022 (2) After (III) and assuming full conversion/ exercise of New ICULS and New Warrants Audited as at 30 April 2015 Subsequent Adjustment (1) (RM 000) (RM 000) (RM 000) (RM 000) (RM 000) Share capital 4,330,614 4,652,463 4,652,463 6,018,264 7,078,009 Share premium 6,965 6,965 6, , ,243 ICULS Equity component 409, , ,648 (3) 300,701 - Other reserves (6,688) (6,688) 177,531 (4) 177, ,531 Warrant reserve 145, , ,018 (5) 28,260 - Retained earnings 2,196,545 2,129,398 2,099,538 (6) 1,898,912 1,898,912 Treasury shares (130,399) (130,399) (130,399) (130,399) (130,399) Net equity funds 6,952,767 7,058,444 7,541,764 8,447,252 9,206,296 No. of BCorp Shares in issue with voting rights ( 000) 4,148,614 4,470,463 4,470,463 5,836,264 6,896,009 NA (7) 6,392,116 6,646,818 6,801,177 8,113,370 9,201,375 NA per BCorp Share in issue with voting rights (RM) Total interest-bearing borrowings 7,221,409 7,212,995 7,331,402 (8) 7,147,073 7,094,526 Gearing (times) (9) Notes: (1) Comprises the issuance of million BCorp Shares arising from the conversion of million RM year 0% irredeemable convertible unsecured loan stocks 2005/2015 and 29.8 million ICULS 2012/2022 from 1 May 2015 up to the LPD. (2) Assuming full conversion of the ICULS 2012/2022 and exercise of all Warrants 2012/2022, including Warrants 2012/2022 held by BCorp s subsidiaries which are assumed to have been sold in the open market, are exercised into new BCorp Shares. (3) The fair value of the equity component of the New ICULS of RM million is determined based on the total nominal value of the New ICULS net of the liability component of the New ICULS of RM52.55 million, which is arrived at by discounting the coupon payments of the New ICULS over the tenure of ten (10) years applying an effective interest cost of 6.00% per annum. 13

14 (4) RM million consolidation reserves arises as the proportionate NA of the BLand Group to be acquired of RM million is higher than the purchase consideration. (5) The fair value of the New Warrants of RM28.26 million or RM0.04 each is measured using the Trinomial Option Pricing Model. (6) After deducting the fair value of the New Warrants of RM28.26 million and estimated expenses of approximately RM1.60 million comprising professional fees, estimated fees payable to the relevant authorities, printing costs, expenses relating to the convening of the extraordinary general meeting ( EGM ) and advertising expenses. (7) Excludes the equity component of all ICULS of BCorp, share option reserve and warrants reserve. (8) Includes the liability component of the New ICULS of RM52.55 million and the entire Cash Consideration is funded through borrowings. (9) Calculated based on total interest-bearing borrowings divided by NA (excluding the equity component of all ICULS of BCorp, share option reserve and warrants reserve). [The rest of this page has been intentionally left blank] 14

15 6.5 Convertible securities Save for the ICULS 2012/2022 and Warrants 2012/2022, BCorp does not have any other convertible securities in issue. Pursuant to the terms of the trust deed dated 6 March 2012 constituting the ICULS 2012/2022 and the deed poll dated 6 March 2012 constituting the Warrants 2012/2022, the Proposed Acquisition will not give rise to any adjustment to the conversion price of the ICULS 2012/2022 as well as the exercise price and number of the Warrants 2012/ APPROVALS REQUIRED The Proposed Acquisition is subject to the following approvals being obtained: (i) (ii) (iii) (iv) Securities Commission Malaysia ( SC ) for the issuance of the New ICULS in accordance with the SC s Guidelines on Issuance of Private Debt Securities and Sukuk to Retail Investors ( Guidelines on Retail PDS and Sukuk ); Bursa Securities for the admission, listing of and quotation for the Consideration Securities as well as the listing of and quotation for new BCorp Shares to be issued upon conversion/ exercise of the Consideration Securities on the Main Market of Bursa Securities; shareholders of BCorp at the EGM to be convened; and any other relevant authorities and/or parties, where required. The Proposed Acquisition is not conditional upon any other corporate exercise/scheme of BCorp. However, the proposed acquisition by JSSB of the million BLand Shares from TSVT is conditional on the proposed acquisition by JSSB of the million BLand Shares from Penta and vice versa. 8. PERCENTAGE RATIO The highest percentage ratio applicable to the Proposed Acquisition is the value of BLand assets (computed based on the percentage of BLand Shares to be acquired and the audited consolidated NA of BLand as at 30 April 2015) compared with the audited NA of the BCorp Group as at 30 April 2015 which amounts to approximately 9.25%. 9. INTERESTS OF THE DIRECTORS, MAJOR SHAREHOLDERS AND/OR PERSONS CONNECTED WITH THEM Save as disclosed below, none of the other Directors and/or major shareholders of BCorp or persons connected with them have any interest, direct or indirect, in the Proposed Acquisition: 9.1 Major Shareholder TSVT, being one of the Vendors, is deemed interested in the Proposed Acquisition by virtue of him being a major shareholder of BCorp. TSVT will abstain from voting on the resolution pertaining to the Proposed Acquisition in respect of his direct and/or indirect shareholding in BCorp at the EGM to be convened. 15

16 TSVT has undertaken that he shall ensure that all persons connected to him will abstain from voting on the resolution pertaining to the Proposed Acquisition in respect of their direct and/or indirect shareholdings in BCorp at the EGM to be convened. 9.2 Directors Dato Sri Robin Tan, the Chairman/Chief Executive Officer of BCorp, is a major shareholder of BCorp and son of TSVT. Mr Rayvin Tan Yeong Sheik ( Mr Rayvin Tan ) was an Executive Director of BCorp within the preceding six (6) months of the SSAs and is a shareholder of BCorp. Mr Rayvin Tan is son of TSVT and brother of Dato Sri Robin Tan. Dato Sri Robin Tan and Mr Rayvin Tan are deemed interested in the Proposed Acquisition by virtue of their relationships with TSVT. Dato Sri Robin Tan has abstained and will continue to abstain from all deliberations and voting at the relevant Board meetings of BCorp in relation to the Proposed Acquisition. Dato Sri Robin Tan and Mr Rayvin Tan will abstain and have undertaken to ensure that persons connected with them will abstain from voting on the resolution pertaining to the Proposed Acquisition in respect of their direct and/or indirect shareholdings in BCorp at the EGM to be convened. Datuk Robert is a common director and a shareholder of BCorp and BLand. Dato Dickson, a common director of BCorp and BLand, is nephew of TSVT and cousin of Dato Sri Robin Tan and Mr Rayvin Tan. Pursuant to the Main Market Listing Requirements of Bursa Securities ( Listing Requirements ), Datuk Robert and Dato Dickson are not deemed to be interested in the Proposed Acquisition. Notwithstanding, Datuk Robert and Dato Dickson have voluntarily abstained from all deliberations and voting at the relevant Board meetings of BCorp in relation to the Proposed Acquisition. 10. ADVISERS Maybank IB has been appointed as the Principal Adviser to the Company for the Proposed Acquisition. The Proposed Acquisition is a related-party transaction pursuant to Chapter of the Listing Requirements. Accordingly, Mercury Securities Sdn Bhd ( Mercury Securities ) has been appointed to act as the Independent Adviser to undertake the following in relation to the Proposed Acquisition: (a) comment as to: (i) (ii) whether the Proposed Acquisition is fair and reasonable so far as the shareholders of BCorp are concerned; whether the Proposed Acquisition is to the detriment of the non-interested shareholders of BCorp, and such opinion must set out the reasons for, the key assumptions made and the factors taken into consideration in forming that opinion; (b) (c) advise the non-interested shareholders of BCorp whether they should vote in favour of the Proposed Acquisition; and take all reasonable steps to satisfy itself that it has a reasonable basis to make the comments and advice in items (a) and (b) above. 16

17 11. DIRECTORS STATEMENT Having considered all aspects of the Proposed Acquisition (including but not limited to the rationale and benefits of the Proposed Acquisition, basis and justification for the purchase consideration of the Proposed Acquisition, salient terms of the SSAs and the effects of the Proposed Acquisition) and after careful deliberation, the Board (save for the Dato Sri Robin Tan, Datuk Robert and Dato Dickson) is of the opinion that the Proposed Acquisition is in the best interest of the BCorp Group. 12. AUDIT COMMITTEE S STATEMENT The Audit Committee of BCorp, having considered all aspects of the Proposed Acquisition, including but not limited to the rationale and benefits of the Proposed Acquisition, basis and justification for the purchase consideration of the Proposed Acquisition, salient terms of the SSAs and the effects of the Proposed Acquisition, is of the opinion that the Proposed Acquisition is: (i) (ii) (iii) in the best interest of BCorp; fair, reasonable and on normal commercial terms; and not detrimental to the interest of the non-interested shareholders of BCorp. The Audit Committee has sought the opinion of Mercury Securities in forming its views in relation to the Proposed Acquisition. 13. TRANSACTIONS WITH THE RELATED PARTIES FOR THE PAST TWELVE (12) MONTHS As at the date of this Announcement, save for the Proposed Acquisition, there is no transaction entered into between the BCorp Group and TSVT and/or persons connected with him for the twelve (12) months preceding the date of this Announcement. 14. ESTIMATED TIMEFRAME FOR APPLICATION TO AUTHORITIES AND COMPLETION The applications to the authorities are expected to be submitted within three (3) months from the date of this Announcement. Barring unforeseen circumstances, the Proposed Acquisition is expected to be completed in the second (2 nd ) quarter of DOCUMENT AVAILABLE FOR INSPECTION The SSAs are available for inspection at the Registered Office of the Company at Lot 13-01A, Level 13 (East Wing), Berjaya Times Square, No. 1 Jalan Imbi, Kuala Lumpur during normal office hours from Monday to Friday (except public holidays) for a period of three (3) months from the date of this Announcement. This Announcement is dated 2 December

18 APPENDIX Table 1 Salient terms of the New ICULS 1. Issuer : BCorp. 2. Issue Size : RM353,248,340 nominal value of RM1.00 each. 3. Issue Price : RM1.00 nominal value per New ICULS or 100% of the nominal value of New ICULS. 4. Form and Denomination : The New ICULS will be issued in denomination of RM1.00 or integral multiples thereof, and will be constituted by a trust deed to be executed by BCorp and a trustee ( Trustee ) ( Trust Deed ) who acts for the benefit of the holders of the New ICULS ( New ICULS Holders ). 5. Tenure : Ten (10) years from and inclusive of the date of issue of the New ICULS. 6. Maturity Date : The last day of a period of ten (10) years commencing from the date of issuance of the New ICULS. 7. Coupon Rate : Fixed rate of 2% per annum on the nominal value of the New ICULS, calculated based on a 365-day year, payable semi-annually in arrears on the New ICULS outstanding as at 30 June and 31 December of each year except that the last coupon payment shall be made on the Maturity Date. 8. Conversion Rights : Each New ICULS Holder shall have the right at any time during the Conversion Period to convert such nominal value of New ICULS held into fully paid new BCorp Shares at the Conversion Price. Unless previously converted, all outstanding New ICULS will be mandatorily converted by BCorp into new BCorp Shares at the Conversion Price on the day falling immediately after the Maturity Date. If at any time the nominal value of the New ICULS then outstanding is not more than ten per cent (10%) of the whole of the New ICULS issued, BCorp shall be entitled at its absolute discretion (but not obliged) to convert at the Conversion Price, all such New ICULS then outstanding in the manner provided in the Trust Deed, by giving not less than ten (10) market days notice in writing to the Trustee and by publication in national newspaper in the English language and of daily and general circulation in Malaysia to the New ICULS Holders and of the date fixed by BCorp for such early conversion. 9. Conversion Period : The New ICULS shall be convertible into new BCorp Shares on any market day from the date of issue of the New ICULS up to and including the Maturity Date (both dates inclusive). 10. Conversion Price : The Conversion Price is fixed at RM1.00 for every one (1) new BCorp Share. 11. Conversion Mode : By surrendering one (1) RM1.00 nominal value of New ICULS for one (1) new BCorp Share. 18

19 APPENDIX 12. Status : The New ICULS: (a) shall as between the New ICULS Holders themselves rank pari passu in all respects and without discrimination or preference as an unsecured obligation of BCorp; and (b) shall be unsubordinated to all other present and future unsecured and unsubordinated obligations of BCorp from time to time outstanding excluding all obligations and liabilities which have priority solely by Malaysian law. 13. Redemption : There will not be any redemption of the New ICULS. All New ICULS remaining immediately after the Maturity Date shall be mandatorily converted into new BCorp Shares at the Conversion Price. Subject to all relevant approvals being obtained (where necessary), BCorp and/or its subsidiaries may at any time purchase the New ICULS (i) on the stock exchange of Bursa Securities at any price; (ii) by tender available to all New ICULS Holders alike at any price; or (iii) by private treaty at any price. Any New ICULS purchased by BCorp and/or its subsidiaries and/or its agent who are acting for the purchase shall be cancelled and cannot be held or resold. New ICULS purchased by corporations or other entities which subsequently become subsidiaries of BCorp may continue to be held or resold even after becoming subsidiaries but shall be cancelled by BCorp at maturity if not resold before then. 14. Non-voting Rights : The New ICULS held by the BCorp Group, related corporation (as defined in the Act) or any director, major shareholder and chief executive officer of BCorp shall not be counted for purposes of voting at any meeting of the New ICULS Holders, whether a special meeting or otherwise. 15. Status of new BCorp Shares arising from the conversion of the New ICULS 16. Adjustment in the Conversion Price and/or nominal value of New ICULS in the event of alteration to the share capital : The new BCorp Shares to be issued arising from the conversion of the New ICULS shall, upon allotment and issuance, rank pari passu in all respects with the then existing BCorp Shares except that they shall not be entitled to any dividend, right, allotment and/or other distribution, the entitlement date of which is prior to the allotment of the new BCorp Shares to be issued pursuant to the conversion of the New ICULS. : BCorp shall make the necessary adjustment to the Conversion Price in the event of any alteration in the issued and paid-up share capital of BCorp on or before the Maturity Date, whether by way of rights issue, bonus issue, consolidation of shares, subdivision of shares or reduction of capital howsoever being effected (but excluding any cancellation of capital which is lost or unrepresented by available assets) or any other circumstances that are deemed necessary by the Directors of BCorp, in accordance with the provisions of the Trust Deed. 19

20 APPENDIX 17. New ICULS Holders rights to participate in any distribution and/or offer of further securities in BCorp 18. Amendments to the New ICULS Holders rights 19. Rights in the event of winding up, liquidation or an event of default 20. Events of default (or enforcement event, where applicable) : The New ICULS Holders are not entitled to participate in any distribution and/or offer of securities in BCorp until and unless such New ICULS Holders convert the New ICULS into new BCorp Shares, in which event the rights to participate will be as stated above under Status of new BCorp Shares arising from the conversion of the New ICULS. : Save as otherwise provided in the Trust Deed, a special resolution of the New ICULS Holders is required to sanction any modification, variation, abrogation or compromise of or arrangement in respect of the rights of the New ICULS Holders against BCorp. : In the event of a declaration of event of default by the Trustee in accordance with the Trust Deed or winding up or liquidation of BCorp, the Trustee may, and if so directed by a special resolution, shall declare (by giving a written notice to BCorp) that the outstanding New ICULS is immediately due and repayable at their nominal amounts of RM1.00 each together with accrued Coupon Rate up to and including the date of repayment. : The Trustee may, and if so directed by a special resolution, shall declare (by giving a written notice to BCorp) that the outstanding New ICULS are immediately due and repayable at their nominal amounts of RM1.00 each together with accrued Coupon Rate up to and including the date of repayment, if any of the following events (hereinafter referred to as Events of Default ) occur: (i) (ii) (iii) if BCorp defaults in the performance of its obligations under the terms and conditions of the New ICULS or fails to comply with its payment obligations under the Trust Deed (other than BCorp s obligation to pay the Coupon Rate in which event sub-clause (xi) below shall apply) and such default continues for a period of thirty (30) days after the due date for such performance; if BCorp defaults in the performance and observance of any agreement, covenant, undertaking, stipulation, provision or obligation contained in the Trust Deed or in any other applicable document relating to the issue, offer or invitation in respect of the New ICULS and on the part of BCorp to be performed and observed and cannot be remedied and, where such default is capable of remedy, such default continues for a period of thirty (30) days from the date of receipt by BCorp of a notice in writing from the Trustee requiring BCorp to remedy such default and where such default is not capable of remedy, the Trustee has certified in writing that the Trustee reasonably considers, in its opinion, such default to be materially prejudicial to the interests of the New ICULS Holders; if distress or execution or other process of a court of competent jurisdiction is levied or enforced upon or against the whole assets or properties of BCorp or any substantial part thereof and which prevents the Company from complying with its payment obligations under the Trust Deed and is not appealed against or contested by the Company or paid out, stayed, withdrawn, discharged or set aside within sixty (60) days thereof; 20

21 APPENDIX (iv) (v) (vi) (vii) if an encumbrancer takes possession or a receiver is appointed over the whole or a substantial part of the assets or undertaking of the Company or a scheme of arrangement under Section 176 of the Act has been proposed between the Company and its creditors or any class of them or between the Company and its members or any class of them, and such possession or appointment or scheme of arrangement is certified in writing by the Trustee to be materially prejudicial in their opinion to the interests of the New ICULS Holders; if the Company stops or threatens to stop payment of its debts or ceases or threatens to cease to carry on its business; if the Company is unable to pay its debts within the meaning of Section 218 of the Act; if an order is made or an effective resolution is passed for winding-up the Company except for the purpose of reconstruction, amalgamation or reorganisation on the terms of which have been approved by the Trustee, which approval shall not be unreasonably withheld; (viii) if the New ICULS or BCorp Shares shall cease to be listed on Bursa Securities or such other stock exchanges approved by the Trustee on which the BCorp Shares are listed; (ix) (x) (xi) if any other indebtedness of the Company becomes due and payable prior to its stated maturity by reason of a default by the Company in its obligations under the Trust Deed or where the security created for any other indebtedness becomes enforceable and such indebtedness becoming due and payable or such security becoming enforceable which prevents the Company from complying with its payment obligations under the Trust Deed and is certified in writing by the Trustee that such indebtedness of the Company is equivalent to 10% or more of the total debt of the Group and in the opinion of the Trustee may materially prejudice the interests of the New ICULS Holders; if there is a revocation, withholding, invalidation or modification of a licence, authorisation or approval that impairs or prejudices the Company s ability to comply with the terms and conditions of the Trust Deed or any other document relating to the issue, offer or invitation in respect of the New ICULS to the extent that the Company is unable to meet its payment obligations under the Trust Deed; if the Company fails to pay any Coupon Rate and/or any other amounts due and payable in relation to the New ICULS owing on the New ICULS for a consecutive period of seven (7) business days (being the days on which commercial banks settle payment in Kuala Lumpur (other than Saturday, Sunday or a public holiday)) as and when the same ought to be paid in accordance with the Trust Deed; 21

22 APPENDIX (xii) at any time any act, condition, thing, approval, consent, authorisation or licence required to be done, fulfilled, performed or obtained in order: (a) (b) (c) to enable the Company to lawfully enter into, exercise its rights and perform its obligations under the Trust Deed; to make the Trust Deed constitute the legal, valid, binding obligations of the Company and enforceable against the Company in accordance with the terms and conditions herein; to render the Trust Deed admissible in evidence in Malaysia, is not done, fulfilled, performed or obtained or is not otherwise in full force and effect for any reason whatsoever, and which prevents the Company from complying with its payment obligations under the Trust Deed; or (xiii) if it is or will become unlawful by the laws of Malaysia or by the laws of any applicable jurisdiction for the Company to perform or comply with any one or more of its obligations under the Trust Deed, and which prevents the Company from complying with its payment obligations under the Trust Deed. 21. Listing : An application will be made to Bursa Securities for the admission, listing of and quotation for the New ICULS and the listing of and quotation for new BCorp Shares to be issued upon conversion of the New ICULS on the Main Market of Bursa Securities. 22. Rating : The New ICULS are exempted from rating requirement pursuant to Paragraph 5.02(b) of the Guidelines on Retail PDS and Sukuk as it is an irredeemable convertible loan stocks whereby: (i) (ii) the New ICULS Holders are given the right to convert the New ICULS into new BCorp Shares at any time during the Conversion Period; and the underlying BCorp Shares will be listed on the Main Market of Bursa Securities. 23. Trust Deed : The New ICULS shall be constituted by the Trust Deed. 24. Governing law : Laws of Malaysia. [The rest of this page has been intentionally left blank] 22