2.1 INFORMATION ON MINETECH QUARRIES SABAH SDN BHD

Transcription

1 ANNOUNCEMENT MINETECH RESOURCES BERHAD ( MRB or THE COMPANY ) PROPOSED JOINT VENTURE BETWEEN MINETECH QUARRIES SABAH SDN BHD AND LALUAN BINA SDN BHD TO FORM A JOINT VENTURE COMPANY ( PROPOSED JV ) 1. INTRODUCTION The Board of Directors of Minetech Resources Berhad ("MRB") ( Board ) is pleased to announce that its wholly-owned ultimate subsidiary of the Company, Minetech Quarries Sabah Sdn Bhd ( MQSSB ) had on 23 April 2012 entered into a joint venture agreement ( JV Agreement ) with Laluan Bina Sdn Bhd (Company Registration No M) ( LBSB ) (jointly referred to as the PARTIES ) to collaborate in combining their technical expertise, skills, know-how and other resources in the asphalt producing industry and other potential concrete products in the near future by establishing a joint venture company ( JV Co. ). 2. DETAILS OF THE PARTIES TO THE PROPOSED JV 2.1 INFORMATION ON MINETECH QUARRIES SABAH SDN BHD MQSSB was incorporated on 30 March 2007 as a private limited company under the Companies Act 1965 in Malaysia with an authorised share capital of RM100,000 divided into 100,000 ordinary shares of RM1.00 each, of which 2 (two) ordinary shares of RM1.00 each have been issued and fully paid-up. MQSSB is a wholly owned subsidiary of Minetech Premix Sdn Bhd and Minetech Premix Sdn Bhd is a wholly-owned subsidiary of MRB. MQSSB is involved in the business of trading of quarry products. 2.2 INFORMATION ON LALUAN BINA SDN BHD LBSB was incorporated on 16 December 2002 as a private limited company under the Companies Act 1965 in Malaysia with an authorised share capital of RM500, divided into 500,000 ordinary shares of RM1.00 each, of which 300,000 ordinary shares of RM1.00 each have been issued and fully paid-up. LBSB is involved in the business of production, manufacturing and sales of bitumen related products. LBSB is also involved in road maintenance such as milling, resurfacing, road upgrading & stabilization in the northern region (Perlis, Kedah, Penang & Perak). 3. DETAILS OF THE PROPOSED JV 3.1 Information on the JV Co The JV Co. is initially incorporated with the name of Elegant Causeway Sdn Bhd (Company No X) with an initial authorised share capital of RM5,000, divided into 5,000,000 million ordinary shares of RM1.00 each and the JV Co is to pursue and engage in the following business:- (a) (b) Among others to carry out business of owning, manufacturing operating and managing a premix production plant and importing, selling, marketing, distributing, promoting, bituminous products and its related products in Malaysia and other countries including premix products and other potential concrete products (hereinafter referred to as the Products ). Establish a business office at Gurun and such other business offices as the Board of Directors may decide where the business of the JV Co is carried out through branches or subsidiary companies established in Malaysia or elsewhere. 1

2 (c) (d) (e) (f) (g) (h) (i) (j) set up a Premix Plant on part of the Land in manufacturing the Products with a capacity of approximately 176 ton per hour (hereinafter referred to as the Premix Plant ) and acquire the equipment known as SPECO model Batch Master 2200 and the other necessary equipment associated with the manufacturing of the Products and the business of the JV Co. rent part of the Land measuring approximately 4 acres (hereinafter referred to as the Site ) from a registered owner of a piece of land measuring approximately 7.86 acres at Guar Nenas, Gurun, Kedah (referred to as the Land ) at a prevailing market rate. be entitled, at any time before and/or after the date of this Agreement to appoint, at its own cost a valuer or firm of valuers to determine the market rate of the rent payable for the Site and to conduct a due diligence review of the Site (hereinafter referred to as the Market Rate ). Operate efficiently and economically. Maximize profits and provide attractive return on investment to the PARTIES on an ongoing basis. conduct all its business on arm s length terms, including but not limited to any Sales & Purchase transaction between any of the PARTIES with JV Co. may purchase material or engaging services from any of the PARTIES where there would be commercial advantage to the JV Co in doing so. source the raw materials for the manufacturing of the Products at competitive market value and ensure the quality of such raw materials shall be as required by the JV Co for the relevant Products. 3.2 Structure of the JV Co The initial issued, subscribed and paid-up share capital of the JV Co. will comprise one million (1,000,000) ordinary shares of Ringgit Malaysia One (RM1.00) each and subject to the provision of the JV Agreement, the shareholding structure of the JV Co. will initially reflect the following proportions:- Shareholder Capital Outlay (RM) No. of shares to be Percentage held in JV Co. MQSSB 510, ,000 51% LBSB 490, ,000 49% The board of directors of the JV Co shall comprise five (5) directors, of which three (3) persons shall be nominated by MQSSB and two (2) persons shall be nominated by LBSB. 2

3 4. SALIENT TERMS OF THE JV AGREEMENT 4.1 Mutual Co-Operation (a) (b) (c) (d) The PARTIES and their respective managements shall give such valuer or firm of valuers auditor or firm of auditors and solicitor or firm of solicitors and its or their respective employees agents appointed by the JV Co full access to the Site and to assist them in the preparation of the valuation, special audit, the due diligence and to determine the Market Rate of the rent of the Site; The PARTIES and their respective managements will negotiate with land owner as to the terms to rent the Site to the JV Co for building a Premix Plant pursuant to this Agreement at a Market Rate to carry out the business of the JV Co pursuant to this Agreement; The PARTIES and their respective managements shall provide all necessary training to the relevant staff of JV Co and to assist JV Co to carry out research and development in the field relevant to the business of JV Co and to carry on its business in an efficient and profitable manner. The PARTIES and their respective managements will contribute their knowledge of the Malaysian market and the expertise to facilitate setting up of the Premix Plant including: (i) (ii) (iii) (iv) (v) (vi) to provide it s technical expertise in the technology and know how to set up the Premix Plant; to provide engineering designs for bituminous products and other related products (hereinafter referred to as the Products ) and the know-how for the manufacturing thereof; to supply from time to time the necessary materials and/or equipment to the JV Co and at competitive market rates at such time; to train the personnel/employees at JV Co required to start up and operate the Premix Plant; to provide all necessary training to the relevant staff of JV Co and to assist JV Co to carry out research and development in the field relevant to the business of JV Co and to carry on its business in an efficient and profitable manner; to provide evaluation of the Site for the Premix Plant; (e) (f) The PARTIES and their respective managements hereto agree that they will respectively and jointly take such steps as may be necessary from time to time to apply on behalf of the JV Co for all approval of permits and licences that may be necessary to enable the JV Co to carry on the business of the JV Co. The PARTIES and their respective managements hereto agree that it is the intention of the parties that JV Co will trade independently of its shareholders but it will not be prevented from purchasing materials or engaging services from any party where there would be commercial advantage to the JV Co in doing so. 3

4 5. TERMS OF COST SHARING AND ESTIMATED TOTAL COST As at the date of this announcement, there is no definitive cost sharing and estimated costs defined. 6. RATIONALE The joint venture is an extension of MRB s existing premix manufacturing business which involved in manufacturing, selling, marketing, distributing, promoting bituminous products and its related products in Malaysia and other countries including premix products and other potential concrete products. 7. SOURCE OF FUNDS MRB will finance its obligation via internally generated funds and/or borrowings. 8. FINANCIAL EFFECTS 8.1 Share Capital The Proposed JV will not have any effect on the issued and paid-up share capital of MRB. 8.2 Issued and Paid-Up Capital and Substantial Shareholders Shareholdings The Proposed JV will not have any effect on the issued and paid-up share capital and substantial shareholders shareholdings of MRB as it does not involve issuance of new shares. 8.3 Net Assets and Gearing The Proposed JV will not have any material effect on the net assets and gearing of the MRB. 8.4 Earnings Upon commencement of operation, the Proposed JV is expected to contribute positively to the future earnings of the Group. 9. PROPECTS AND RISKS FACTORS The MRB Group does not foresee any significant risk factors on the Proposed JV. 10. APPROVALS REQUIRED The Proposed JV is not subject to approval of the shareholders of the Company. 11. DIRECTORS, SUBSTANTIAL SHAREHOLDERS AND/OR PERSONS CONNECTED None of the directors and / or substantial shareholders and / or persons connected to the directors or substantial shareholders of the MRB Group have any interest, whether directly or indirectly, in the Proposed JV. 4

5 12. DIRECTORS RECOMMENDATION The Board having considered all the relevant factors in respect of the Proposed JV is of the opinion that the Proposed JV is in the best interest of MRB. 13. DEPARTURE FROM THE GUIDELINES ON THE OFFERING OF EQUITY AND EQUITY- LINKED SECURITIES ISSUED BY THE SECURITIES COMMISSION ( SC S EQUITY GUIDELINES ) The Proposed JV does not fall within the purview of the SC s Equity Guidelines. 14. DOCUMENTS FOR INSPECTION The JV Agreement is available for inspection at the registered office of MRB at 10 th Floor, Menara Hap Seng, No. 1 & 3 Jalan P Ramlee, Kuala Lumpur during normal office hours from Monday to Friday (except public holidays) for duration of three (3) months from the date of this announcement. This announcement is dated 23 April