The Directors and shareholder of MPSB are as follows:-

Transcription

1 MILUX CORPORATION BERHAD ( MILUX OR THE COMPANY ) - JOINT-VENTURE CUM SHAREHOLDERS AGREEMENT BETWEEN MILUX PROPERTIES SDN. BHD., RGF CABARAN SDN. BHD. (FORMERLY KNOWN AS CG GLOBAL VENTURE SDN. BHD.) AND PHOENIX PENTAGON SDN. BHD. 1.0 INTRODUCTION The Board of of MILUX ( Board ) wishes to announce that its wholly-owned subsidiary, Milux Properties Sdn. Bhd. ( MPSB ), had on 16 October 2015 entered into a jointventure cum shareholders agreement ( JVSHA ) with RGF Cabaran Sdn. Bhd. (formerly known as CG Global Venture Sdn. Bhd.) ( RCSB ) (jointly referred to as the JV Parties ) and the joint venture company known as Phoenix Pentagon Sdn. Bhd. ( JVCO ), for the purpose of participating in a joint venture to cooperate by pooling in their respective resources to jointly manage the development of all that twelve (12) pieces of land measuring in area square metre in Mukim Bentong, Daerah Bentong, Negeri Pahang Darul Makmur into residential property consisting of condominiums styled as Pentagon Genting Highlands ( the Project or the Lands ). 2.0 DETAILS OF THE JVSHA (a) Parties to JVSHA 2.1 MPSB MPSB was incorporated in Malaysia on 7 May 2012 under the Companies Act, 1965 ( the Act ) as a private limited company and having its registered address at Level 7, Menara Milenium, Jalan Damanlela, Pusat Bandar Damansara, Damansara Heights, Kuala Lumpur, Wilayah Persekutuan, and place of business at No. 9 & 11, Jalan Haji Abdul Karim 29/KS2, Taman Perindustrian Sungai Jati, Klang, Selangor Darul Ehsan, Malaysia. It has an authorised share capital of RM.00 comprising ordinary shares of RM1.00 each and an issued and paid-up share capital of RM2.00 comprising 2 ordinary shares of RM1.00 each. MPSB is a wholly-owned subsidiary of MILUX. The and shareholder of MPSB are as follows:- and shareholder No. of MPSB shares Percentage of issued and paid-up share capital of MPSB (i) Koh Pee Seng (ii) Dato Mohamed Salleh Bin Bajuri Shareholder Milux Corporation Berhad 2 100% MPSB is involved in the business of acquiring land and building and to undertake the business of property development. 2.2 RCSB RCSB was incorporated in Malaysia on 28 August 2012 under the Act as a private limited company and having its registered address at 230A, Jalan Bandar 13, Taman Melawati, Kuala Lumpur.

2 It has an authorised share capital of RM100, comprising 100,000 ordinary shares of RM1.00 each and an issued and paid-up share capital of RM comprising 100 ordinary shares of RM1.00 each. The and shareholders of RCSB are as follows:- shareholders and No. of RCSB shares Issued and paid-up share capital of RCSB (%) (i) Chua Seong Seng (ii) Ghee Peng Lam 49 49% Shareholders (i) Ghee Peng Lam (ii) RGF Land Sdn. Bhd. ( RLSB or the Land Owner ) % 51% RCSB is a dormant company. 2.3 JVCO JVCO was incorporated in Malaysia on 12 August 2015 under the Act as a private limited company and having its registered address at Level 7, Menara Milenium, Jalan Damanlela, Pusat Bandar Damansara, Damansara Heights, Kuala Lumpur, Wilayah Persekutuan, and place of business at No. 9 & 11, Jalan Haji Abdul Karim 29/KS2, Taman Perindustrian Sungai Jati, Klang, Selangor Darul Ehsan, Malaysia. It has an authorised share capital of RM1,000, comprising 1,000,000 ordinary shares of RM1.00 each and an issued and paid-up share capital of RM2.00 comprising 2 ordinary shares of RM1.00 each. The current of JVCO are as follows:- (i) Mr. Koh Pee Seng; (ii) Dato Mohamed Salleh Bin Bajuri; and (iii) Mr. Tan Chee How The JVCO is currently a wholly-owned subsidiary of MPSB. Upon execution of JVSHA, the JV Parties shall take steps to ensure the composition of the Board of and shareholding of JVCO be as follows:- Name of JV Parties Capital Outlay (RM) No. of shares to be held (in units) Share equity percentage Entitlement to nominate number of to JVCO MPSB 252, ,000 60% minimum 3, maximum 4 RCSB 168, ,000 40% minimum 2, maximum 3 Total 420, , % minimum 5, maximum 7 JVCO is involved in the business of project management consultant and rendering project management advisory services. 3.0 DETAILS OF THE JOINT VENTURE ( JV ) 3.1 Details of the Lands RLSB, the holding company of RCSB, is the beneficial/registered owner of the following twelve (12) pieces of land measuring in area square metre held in Mukim Bentong, Daerah Bentong, Negeri Pahang Darul Makmur ( the Land Owner ) and is desirous of developing the Lands into residential property consisting of condominiums styled as Pentagon Genting Highlands :-

3 No. No. Hakmilik PT Area (M 2 ) 1. H.S (D) PT H.S (D) PT H.S (D) PT H.S (D) PT H.S (D) PT H.S (D) PT H.S (D) PT H.S (D) PT H.S (D) PT H.S (D) PT H.S (D) PT H.S (D) PT TOTAL RLSB was incorporated in Malaysia on 26 January 2015 under the Act as a private limited company and having its registered address at 32A-2, Jalan Teknologi 3/6C, Taman Sains Selangor 1, Seksyen 3, Kota Damansara, Petaling Jaya, Selangor Darul Ehsan, and place of business at Level 29, Central Plaza, No. 34 Jalan Sultan Ismail, Kuala Lumpur. It has an authorised share capital of RM1,000, comprising 1,000,000 ordinary shares of RM1.00 each and an issued and paid-up share capital of RM 1,000, comprising 1,000,000 ordinary shares of RM1.00 each. The and shareholders of RLSB are as follows:- shareholders and No. of RLSB shares Issued and paid-up share capital of RLSB (%) (i) Revi A/L Janardhanan Pillai (ii) Chua Seong Seng Shareholders (i) Revi A/L Janardhanan Pillai (ii) Chua Seong Seng RLSB is involved in the business of investment holding.

4 3.2 Salient Terms of JVSHA The JVSHA is conditional upon the following events having been fulfilled on or before the expiry of the period of three (3) months from the date of the JVSHA and where required in the event any of the Conditions Precedent have not been fulfilled or waived within the initial three (3) months, shall be automatically extended for a further period of one (1) month or such other extended period as the JV Parties may mutually agree in writing, within which all Conditions Precedent must be fulfilled or waived:- (i) the lawful assignment of the Project Management Agreement ( PM Agreement ) by RCSB to JVCO wherein an Assignment of PM Agreement shall be executed, stamped and a copy thereof shall be served on the Land Owner; (ii) the procurement of written consent of the Land Owner by RCSB to the assignment stipulated in (i) above; (iii) the approval of the shareholders of MILUX in a general meeting to be convened for the proposed diversification of the existing business of MILUX and its subsidiaries ( Group or MILUX Group ) (including MPSB) to include development project management consultancy; (iv) the completion of the legal due diligence on the Lands to the satisfaction of the JV Parties; (v) the approval of the respective shareholders of the JV Parties in a general meeting to be convened, authorising the execution of and the performance by them of their respective obligations under the JVSHA and of any other documents to be executed by them pursuant to the JVSHA.; (vi) any other consents, permits, licences and approvals as may be required by any other relevant authorities/parties (if applicable) and to give effect to the transaction contemplated herein been obtained; and (vii) upon fulfilment of Clauses (i) to (vi) above, the immediate subscription of the aggregate of 251,998 and 168,000 ordinary shares of RM1.00 each in the capital of JVCO to be subscribed by MPSB and RCSB respectively ( Investment Shares ) by the JV Parties in the Agreed Proportions, i.e. sixty per centum (60%) for MPSB and forty per centum (40%) for RCSB on the Subscription Date [within fourteen (14) days upon fulfilment of Clauses (i) to (vi) above which is to be mutually agreed between the JV Parties for the subscription of the Investment Shares by the JV Parties] at the office of the JVCO or at such other place as the JV Parties may agree in writing where all the events described in the JVSHA shall occur. The PM Agreement dated 17 September 2015 has been entered into between RLSB and RCSB. RLSB is desirous of engaging the services of RCSB for managing the development, construction, planning and completion of the Project, and RCSB is desirous to accept such appointment upon the terms and conditions stipulated in the PM Agreement. 3.3 Rationale of the JVSHA and JV (i) Diversification into new business area In view of the increasingly competitive market in the household appliances industry in which the Group operates, the Group has identified the JV as a new business opportunity which is expected to provide an additional source of income for the Group. (ii) Sharing of resources The JV Parties are desirous of participating in the JVCO for the purposes to cooperate by pooling in their respective resources to jointly manage the Project ( Project Management ); and the JVCO shall be operated on a profit-oriented basis employing the best management practices to ensure its commercial viability and success in the Project Management. The Group hopes to minimise the risks in relation to the management and financial commitment in the new business area, i.e. project management consultancy business, through the JV. Although the Group believes that it has the capability and competency to undertake the project management by itself, by entering into the JVSHA, the Group hopes to capitalise on the experience and management expertise of its JV partner, i.e.

5 RCSB, led by Mr. Ghee Peng Lam. It will also allow the Group to minimise the financial outlay for this initial diversification exercise and provide the opportunity for the Group to participate in future project management contracts secured by its JV partner. (iii) The Board believes that the Group has the capacity, capabilities and resources to venture into this JV by capitalising on the competency and experience of Mr. Koh Pee Seng, the Group Managing Director of MILUX who has been involved in property development since the 1990s. In addition, Mr Ghee Peng Lam, the director / shareholder of RCSB has more than a decade of on-site experience in project management and property development. The combined competency and experience of these key management personnel would ensure the success of this JV. 3.4 Share Equity Participation in the JVCO The issued and paid-up capital of the ordinary shares of the JVCO shall be in the proportion as set out below:- Name of Capital Outlay No. of shares to be Share equity shareholders (RM) held (in units) percentage MPSB 252, ,000 60% RCSB 168, ,000 40% Total 420, , % 4.0 SOURCE OF FUNDING The capital outlay to be rendered by MPSB shall be satisfied in cash vide internally-generated funds of MILUX Group in the following manner:- MPSB s projected cash outlay for its investment in the JVCO is estimated to be as follows: i. Initial paid-up share capital ( 60% share ) RM 251,998 ii. Advance for working capital to JVCO ( 60% share ) RM 60,000 RM 311,998 * RM 2.00 has been incurred as initial paid-up share capital for the incorporation of the JVCO. 5.0 RISKS FACTORS (i) Business diversification risks The JV would result in the MILUX Group s venture into the project management consultancy business. The MILUX Group will then be subjected to new challenges and risks inherent in the construction and property industry. The MILUX Group seeks to mitigate this risk by leveraging on the competency of the key management team with vast experience in project management consultancy business and to recruit additional professionals with relevant experience in the project management consultancy business to complement the existing key management team. (ii) Dependency on key management personnel The MILUX Group s venture into the project management consultancy business will depend to a significant extent upon the abilities, skills, experience, competency and continued efforts of the key management team of MPSB. The loss of any relevant key management personnel of MPSB and RCSB without suitable and timely replacement could materially affect the MILUX Group s project management consultancy business and consequently, the MILUX Group s revenue and profitability.

6 Recognising the importance of the key management personnel in the MILUX Group s project management consultancy business, the MILUX Group will continuously adopt appropriate approaches or measures to attract and retain the key management personnel. (iii) Non-completion of the JVSHA In the event any of the conditions precedent is not fulfilled or waived (as the case may be), the JV may be delayed or terminated, and the potential benefits arising therefrom may not materialise. In this respect, the Board seeks to limit such risk and will take all reasonable steps to comply with the relevant conditions precedent so as to be able to complete the JV. 6.0 FINANCIAL EFFECTS The JV is not expected to have any effect on the net assets and gearing, earnings and earnings per share and any major financial impact for the financial year ending 31 December 2015 but is expected to contribute positively to the future earnings of the Company. Such collaboration will not have any effect on the share capital and substantial shareholders shareholdings of MILUX. 7.0 APPROVALS REQUIRED The JVSHA does not require the approval of the Company s shareholders or any relevant government authorities. However, in line with paragraph of the Main Market Listing Requirements ( Main LR ) of Bursa Malaysia Securities Berhad ( Bursa Securities ), MILUX will seek the approval of its shareholders for the diversification of the business of the Group to include project management consultancy business once MILUX expects the JV to potentially contribute at least 25% to the future net profits of the Group and/or diversion of 25% or more of the Group s net assets to the JV. 8.0 DIRECTORS AND MAJOR SHAREHOLDERS INTEREST Mr. Chua Seong Seng is a Non-Independent Non-Executive Director and one of the major shareholders of MILUX by virtue of his shareholding held in the RLSB pursuant to Section 6A(4) of the Act. Mr. Chua Seong Seng is also a Director of RCSB. In view thereof, he would abstain from deliberating and voting on the relevant resolution in relation to the JVSHA at the Board meeting of MILUX. Save for the above, none of the and/or major shareholders and/or persons connected to them, has any interest, direct or indirect in the JV. 9.0 STATEMENT BY DIRECTORS Save for Mr. Chua Seong Seng who has abstained from rendering an opinion, the Board is of the opinion that the JV is in the best interest of the Company AUDIT AND RISK COMMITTEE S STATEMENT The Audit and Risk Committee of MILUX, having considered all aspects of the JVSHA, is of the opinion that the JVSHA is:- (i) (ii) fair, reasonable and on normal commercial terms; in the best interest of the Company; and

7 (iii) not detrimental to the interest of the minority shareholders of MILUX HIGHEST PERCENTAGE RATIO The highest percentage ratio applicable to the JVSHA pursuant to Paragraph 10.02(g) of the Main LR of Bursa Securities is 0.65% TRANSACTION WITH THE SAME RELATED PARTY There is no other transaction being entered between MILUX and the same related party for the preceding 12 months prior to the date of this Announcement DOCUMENTS FOR INSPECTION The JVSHA is available for inspection during normal business hours from Mondays to Fridays (except public holidays) at the registered office of MILUX located at Level 7, Menara Milenium, Jalan Damanlela, Pusat Bandar Damansara, Damansara Heights, Kuala Lumpur, Wilayah Persekutuan for a period of three (3) months from the date of this announcement. This announcement is dated 16 October 2015.