YONG TAI BERHAD ( YTB OR THE COMPANY ) PROPOSED DISPOSALS BY YTB OF ITS 100% EQUITY INTEREST IN: i) YUTA REALTY SDN BHD ( YUTA ) FOR A CASH CONSIDERATION OF RM300,000; ii) YONG TAI SAMCHEM SDN BHD ( YTSM ) FOR A CASH CONSIDERATION OF RM10; iii) SYARIKAT KOON FUAT INDUSTRIES SDN BHD ( SKF ) FOR A CASH CONSIDERATION OF RM10,700,000. TO EXTREME RICHES SDN BHD ( EXTREME RICHES OR THE PURCHASER ) 1. INTRODUCTION The Board of Directors of YTB ( Board ) wishes to announce that YTB had on 29 June 2017 entered into three (3) Share Sale Agreements ( SSA ) with Extreme Riches, for the followings: a) Proposed disposal of the 100% equity interest in YUTA, comprising 402,600 ordinary shares of RM1.00 each in YUTA ( YUTA Shares ) for a cash consideration of RM300,000 ( Proposed Disposal of YUTA); b) Proposed disposal of the 100% equity interest in YTSM, comprising 2,000,000 ordinary shares of RM1.00 each in YTSM ( YTSM Shares ) for a cash consideration of RM10 ( Proposed Disposal of YTSM); and c) Proposed disposal of the 100% equity interest in SKF, comprising 127,500 ordinary shares of RM1.00 each in SKF ( SKF Shares ) for a cash consideration of RM10,700,000 ( Proposed Disposal of SKF). (collectively, the Proposed Disposals ). Further details of the Proposed Disposals are set out in the ensuing sections. 2. DETAILS OF THE PROPOSED DISPOSALS Under the terms of the SSA, YUTA, YTSM and SKF, respectively shall be disposed free from all liens, pledges, equities, charges, mortgages, options and any encumbrances affecting the YUTA Shares, YTSM Shares and SKF Shares, respectively or any part thereof together with all rights and advantages attached thereto or accruing thereon including all dividends and distributions declared, paid or made in respect thereof on or after the date of the signing of the SSA. 2.1 INFORMATION ON YUTA YUTA was incorporated in Malaysia on 9 October 1980 under the Companies Act, 1965 ( Act ) as a private limited company. The present authorized share capital of the YUTA is RM500,000, of which 402,600 ordinary shares of RM1.00 each have been issued and credited as fully paid-up. YUTA is principally involved in property development and investment holding. For the financial year ended ( FYE ) 30 June 2016, YUTA recorded an audited profit after tax of RM47,550 while its audited net assets position was RM4,600,041. The latest unaudited net assets position up to 31 May 2017 was RM300,541.
2.2 INFORMATION ON YTSM YTSM was incorporated in Malaysia on 31 March 2004 under the Act as a private limited company. The present authorized share capital of the YTSM is RM5,000,000, of which 2,000,000 ordinary shares of RM1.00 each have been issued and credited as fully paidup. YTSM is an investment holding company. For the FYE 30 June 2016, YTSM recorded an audited loss after tax of RM3,840 while its audited net assets position was RM2,068,971. The latest unaudited net liabilities position up to 31 May 2017 was RM2,149. 2.3 INFORMATION ON SKF SKF was incorporated in Malaysia on 31 December 1973 under the Act as a private limited company. The present authorized share capital of the SKF is RM300,000, of which 127,500 ordinary shares of RM1.00 each have been issued and credited as fully paid-up. SKF is principally involved in manufacturing and dyeing of all types of fabrics and related products. For the FYE 30 June 2016, SKF recorded an audited profit after tax of RM9,019,267 while its audited net assets position was RM9,531,269. The latest unaudited net assets position up to 31 May 2017 was RM10,793,036. 2.4 INFORMATION ON EXTREME RICHES Extreme Riches was incorporated in Malaysia on 27 November 2014 under the Act as a private limited company. The present authorized share capital of the Extreme Riches is RM400,000, of which 2 ordinary shares of RM1.00 each have been issued and credited as fully paid-up. Extreme Riches is an investment holding company. The directors of Extreme Riches are Ngan Ah Choong and Hor Hock Lam. The shareholders of Extreme Riches are as follows: Shareholders of Extreme Riches No. of ordinary shares held % Ngan Ah Choong 1 50 Hor Hock Lam 1 50 Total 2 100 2.5 BASIS AND JUSTIFICATION OF ARRIVING AT THE DISPOSAL CONSIDERATION The disposal consideration of the Proposed Disposals, which will be fully satisfied in cash, was arrived at on a willing buyer-willing seller basis, after taking into consideration, amongst others, the latest unaudited net assets/liabilities position of YUTA, YTSM and SKF up to 31 May 2017.
2.6 ORIGINAL COST OF INVESTMENT The total original cost of investment by YTB in YUTA, YTSM and SKF respectively are as follows: YUTA 1 October 1997 402,600 2,989,866 Total 402,600 2,989,866 YTSM 31 March 2004 6 6 29 November 2004 299,994 299,994 5 July 2006 900,000 900,000 6 December 2014 800,000 800,000 Total 2,000,000 2,000,000 SKF 1 October 1997 127,500 6,431,326 Total 127,500 6,431,326 2.7 ASSUMPTION OF LIABILITIES The Purchaser will not assume any liabilities, including contingent liabilities and guarantees, arising from the Proposed Disposals under the terms of the SSA. 3. UTILISATION OF PROCEEDS The proceeds of RM11,000,010 from the disposals consideration are expected to be utilised for the Group s general working capital purposes within a period of 12 months. 4. RATIONALE FOR THE PROPOSED DISPOSALS The Proposed Disposals are part of YTB strategic business rationalisation plan to concentrate on its core property development business segment. The Proposed Disposals of the 3 subsidiaries marks the complete exit for the Group from the garment and textile business segment and enable YTB to accelerate its execution and growth into the cultural and tourism-related real estate development business segment.
5. EFFECTS FOR THE PROPOSED DISPOSALS 5.1 SHARE CAPITAL AND SHAREHOLDINGS OF SUBSTANTIAL SHAREHOLDERS The Proposed Disposals will not have any effect on the share capital or the shareholdings of substantial shareholders of YTB as there is no issuance of new ordinary shares of RM0.50 each in YTB. 5.2 NET ASSETS PER SHARE AND GEARING The proforma effects of the Proposed Disposals on the net assets ( NA ) per share and gearing of YTB GROUP, based on the latest audited consolidated statement of financial position of YTB as at 30 June 2016 are set out below: Audited as at 30 June 2016 After the Proposed Disposals RM 000 RM 000 Share capital ordinary shares 80,172 217,565 Share capital ICPS - 172,827 Share premium 2,221 82,780 Warrant reserve 6,218 6,218 Accumulated losses (761) (2) (852) NA attributable to ordinary 87,850 478,538 shareholders Number of YTB Shares in issue ( 000) 160,345 435,131 NA per YTB Shares 0.55 1.10 Borrowings (RM 000) 2,195 2,195 Gearing (%) 2.5% 0.5% After adjusting the issuance of new YTB Shares and irredeemable convertible preference shares in YTB arising from the completion of corporate exercises (as announced on 5 February 2016) subsequent to 30 June 2016. (2) After taking consideration an estimated loss on disposal at group level of RM0.09 million upon completion of the Proposed Disposals. 5.3 EARNINGS AND EARNINGS PER SHARE ( EPS ) The Proposed Disposals is expected to result in a loss on disposal at group level of approximately RM0.09 million, representing a potential decrease in basis EPS of approximately 0.02 sen per YTB share computed based on the existing number of YTB shares in issue of 435,131,250, after adjusting the issuance of new YTB Shares and irredeemable convertible preference shares in YTB arising from the completion of corporate exercises (as announced on 5 February 2016) subsequent to 30 June 2016. 6. APPROVALS REQUIRED The Proposed Disposals are not subject to the approval of shareholders of YTB or any other relevant authorities and/or parties being obtained.
7. INTERESTS OF DIRECTORS, MAJOR SHAREHOLDERS AND/OR PERSONS CONNECTED TO THEM None of the directors, major shareholders of YTB and/or persons connected to them have any interest, direct or indirect, in the Proposed Disposals. 8. DIRECTORS STATEMENT The Board, having considered all aspects of the Proposed Disposals, is of the opinion that the Proposed Disposals is in the best interest of YTB. 9. PERCENTAGE RATIOS The highest percentage ratio applicable to the Proposed Disposals pursuant to Paragraph 10.02(g) of the Main Market Listing Requirements of Bursa Malaysia Securities Berhad is 2.29% based on the consolidated NA of YTB as at 30 June 2016 after adjusting the issuance of new YTB Shares and irredeemable convertible preference shares in YTB arising from the completion of corporate exercises (as announced on 5 February 2016) subsequent to 30 June 2016 of RM480.9 million. 10. DOCUMENTS FOR INSPECTION The SSA will be made available for inspection at the registered office of YTB at Ground Floor, No. 8, Lorong Universiti B Section 16, 46350 Petaling Jaya Selangor Darul Ehsan during the 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 29 June 2017.