PNE MICRON HOLDINGS LTD (Incorporated in the Republic of Singapore) Company Registration No. 200105909M (1) INCORPORATION OF INDIRECT SUBSIDIARY PNE TEKNICAST SDN. BHD.; (2) ENTRY INTO A SHAREHOLDERS AGREEMENT WITH TEKNICAST SDN. BHD. ; AND (3) UPDATE ON USE OF PROCEEDS FROM THE PRIVATE PLACEMENT AND EXERCISE OF CALL OPTIONS (1) INCORPORATION OF NEW SUBSIDIARY The Board of Directors (the Board or the Directors ) of PNE Micron Holdings Ltd (the Company, and together with its subsidiaries, the Group ), is pleased to announce that the Company s wholly-owned subsidiary, PNE-Sino Pte. Ltd. ( PNE- Sino ) had on 23 August 2013 together with a third party, Teknicast Sdn. Bhd. ( Teknicast ), incorporated a new subsidiary known as PNE Teknicast Sdn. Bhd. ( PNE Teknicast ) in Malaysia with an initial issued and paid-up capital of RM100equivalent to approximately S$39) (the Incorporation ). Following the Incorporation, PNE Teknicast has become an indirect subsidiary of the Company. PNE Teknicast will be principally involved in the provision of spray-painting, powder coating, organic coating, metallic-finishing-technology coating, silk-screening, and other related secondary processes and operations. End markets to be serviced will include the oil and gas industry. Further information on the Incorporation is elaborated in Section (2) below. (2) ENTRY INTO A SHAREHOLDERS AGREEMENT WITH TEKNICAST SDN. BHD. The Board of Directors of the Company wishes to further announce that the Company s wholly-owned subsidiary, PNE-Sino has on 8 October 2013, entered into a shareholders agreement (the Shareholders Agreement ) with Teknicast to participate in a new investment company, PNE Teknicast to carry out the business of spray-painting of aluminum casting components that are complementary to Teknicast s high pressure precision die-casting activities ( Joint Venture ). Teknicast is currently primarily engaged in precision aluminium die-casting and machining activities in West Malaysia, with extensive experience in serving global multinational customers supplying to a range of industry segments for the last 30 years. The Joint Venture is in the ordinary course of the Company s business and the 1
rationale for the Joint Venture is to enable the Company to expand its service market to include the oil and gas industry sector. Teknicast is a 100% wholly-owned subsidiary of Teknicast Holdings Sdn Bhd. Pursuant to the Shareholders Agreement, the authorised, issued and paid-up capital of PNE Teknicast shall be RM5.0 million (equivalent to approximately S$1.9 million) divided into 5,000,000 ordinary shares in the capital of PNE-Teknicast ( Shares ) at RM1.00 each. PNE-Sino and Teknicast (collectively the Parties, and each a Party ) will subscribe for the following number of Shares as set out below: Party No. of Shares Shareholding Percentage PNE-Sino 3,000,000 Shares 60% Teknicast 2,000,000 Shares 40% Total 5,000,000 Shares 100% The initial issued and paid-up capital of PNE Teknicast is RM100 (equivalent to approximately S$39) comprising of 100 Shares of RM1 each. The Parties will gradually increase the issued and paid-up capital of PNE Teknicast from RM100 to RM5.0 million within the next few months after the signing of the Shareholders Agreement. PNE-Sino s investment of RM3.0 million (equivalent to approximately S$1.2 million) representing 60% of the issued and paid-up capital of PNE Teknicast ( Investment in PNE Teknicast ) will be funded by the proceeds from the Private Placement (as defined below) and exercise of Call Options (as defined below), as further elaborated in Section (3) below. Other salient terms of the Shareholders Agreement include, inter alia, the following:- (i) (ii) The total number of directors holding office shall consist of five (5) Directors. PNE-Sino and Teknicast shall be entitled to appoint three (3) and two (2) directors to the board of directors of PNE Teknicast respectively; The Chairman of the Board of Directors of PNE Teknicast ( Board of PNE Teknicast ) shall be a director appointed by PNE-Sino. As of the date of entry into the Shareholders Agreement, the Chairman of the Board shall be Mr Tan Kong Sin (Chief Executive Officer and Director of the Company); (iii) The appointment of Managing Director/ General Manager/ Chief Executive Officer for PNE Teknicast shall be a matter for the Board of PNE Teknicast as a whole; (iv) No party shall sell all or any part of its Shares, except in the event that either Party ( Offeror ) desires to purchase all of the Shares for cash from the other Party ( Offeree ), the Offeror shall send to the Offeree, a written offer ( Offer ) with the specified price for the Shares. The Offeree shall, within thirty (30) days of the receipt of the Offer, (a) accept the Offer, or (b) deliver to the Offeror a 2
counter-offer ( Counter-Offer ), to purchase the Offeror s Shares. If the Offeree neither accepts the Offer, nor delivers a Counter-Offer within such ninety (90) day period, the Offeree shall be deemed to have accepted the Offer and shall sell all its Shares according to the Offer. (v) If a Party proposes to sell or transfer the Shares to a third party, it shall first make an offer to the other Party. The offer shall remain valid for at least ninety days (90) days. The Incorporation and the Joint Venture are not expected to have any material impact on the earnings per share and net tangible assets per share of the Group for the current financial year ending 30 September 2013. None of the directors or controlling shareholders of the Company has any interest, direct or indirect, in the above Incorporation and the Joint Venture other than through their shareholdings in the Company. A copy of the Shareholders Agreement is available for inspection at the registered office of the Company at 996, Bendemeer Road, #07-06, Singapore 339944 during normal business hours for a period of 3 months from the date of this announcement. (3) UPDATE ON USE OF PROCEEDS FROM THE PRIVATE PLACEMENT AND EXERCISE OF CALL OPTIONS The Company had on 20 December 2012, entered into a subscription agreement for the issue and allotment of 85,500,000 new shares in the capital of the Company ( New Share(s) ) ( Private Placement ) and call option agreements for the issue and allotment of up to 57,500,000 New Shares ( Call Options ) at an issue and exercise price of S$0.036 per New Share. The Private Placement and grant of Call Options were completed on 7 January 2013, whereby 85,500,000 New Shares were allotted and issued to eleven subscribers and 57,500,000 Call Options were granted to nine subscribers. As at the date of this announcement, 54,500,000 Call Options have been exercised and there are 3,000,000 outstanding Call Options. With regards to the intended use of the proceeds from the Private Placement and exercise of Call Options, the Board wishes to update that the Company had decided to re-deploy the sum of S$1.2 million out of S$4.8 million which was earlier intended for the purposes of funding new potential investments and business through acquisitions, joint ventures and collaboration in businesses involving the trading of resources as and when the opportunities arise, for the Investment in PNE Teknicast pursuant to the Joint Venture. 3
The Board believes that the Joint Venture will be able to further enhance the Group s continued and long-term growth and expansion objective. In addition, the redeployment of the S$1.2 million for the Investment in PNE Teknicast would also eliminate the requirement for the Group to seek additional financing and borrowings from financial institutions for the Joint Venture. Pursuant to the above, the following table shows an update on the use of the proceeds from the Private Placement and exercise of Call Options, as at the date of this announcement:- Intended Use Of Proceeds Private Placement and Exercise of Call Options Proceeds Status Of Use Amount Utilised To-Date Balance 1. Fund new investments Redeployment of S$1.2 million and businesses 4,800 for the Investment in PNE involving the trading of Teknicast resources (1,200) 3,600 2. Expenses incurred in connection with the 240 Utilised for intended use (230) 10 Private Placement and exercise of Call Options Total 5,040 (1,430) 3,610 The Company will make further announcements via SGXNET as and when the remaining proceeds from the Private Placement and Exercise of Call Options are materially disbursed. By Order of the Board Tan Tee Ching 4
Company Secretary 8 October 2013 This announcement has been prepared by the Company and its contents have been reviewed by the Company s sponsor, PrimePartners Corporate Finance Pte. Ltd. ( Sponsor ), for compliance with the relevant rules of the Singapore Exchange Securities Trading Limited (the SGX-ST ). The Sponsor has not independently verified the contents of this announcement. This announcement has not been examined or approved by the SGX-ST and the SGX-ST assumes no responsibility for the contents of this announcement including the correctness of any of the statements or opinions made or reports contained in this announcement. The contact person for the Sponsor is Mr. Mark Liew, Managing Director, Corporate Finance, at 20 Cecil Street, #21-02 Equity Plaza, Singapore 049705, telephone (65) 6229 8088. 5