BAN JOO & COMPANY LIMITED (Company Registration Number 196400100R) (Incorporated in the Republic of Singapore) ASSIGNMENT OF ACCOUNTS RECEIVABLES BY BAN JOO GLOBAL PTE. LTD. TO BAN JOO INVESTMENT (PTE) LTD 1. Introduction The Board of Directors of Ban Joo & Company Limited (the Company ) is pleased to announce that its wholly owned subsidiary, Ban Joo Global Pte. Ltd. ( BJG ), has today entered into an assignment of accounts receivables (the Agreement ) with Ban Joo Investment (Pte) Ltd ( BJI ) pursuant to which BJI agreed to acquire the Accounts Receivables (as defined hereinafter) of BJG for a total cash consideration of S$16,162,000 (the Disposal ). 2. Information about BJG and the Accounts Receivables BJG (Unique Entity Number 200714065W) is a private limited company incorporated in Singapore and having its registered address at 25 Circular Road Singapore 049381. BJG has an issued and paid-up share capital of S$18,475.92 comprising 4 ordinary shares. BJG has, inter alia, accounts receivables of:- (i) (ii) S$39,818,540.64 due and owing to it by its customers in respect of goods sold and delivered by BJG, which amount has been impaired and provided for in its management accounts for the seventeen month financial period ended 28 February 2010 (the Accounts ); and S$1,784,387.11 due and owing to it by its customers in respect of goods sold and delivered by BJG, which amount has yet to be provided for in its Accounts, (collectively, the Accounts Receivables ) BJG is principally engaged in the business of supplying or trading in a wide range of textiles and the raw material fibres used in the production of the textiles. 3. Disposal Consideration The cash consideration of S$16,162,000 (the Disposal Consideration ) was arrived at after arm s length negotiations and on a willing buyer willing seller basis. 1
BJI had paid and BJG had received a sum of S$6,962,000, being deposit paid by BJI in respect of the Disposal, on the date of execution of the Agreement. The said amount shall be applied towards part payment of the Disposal Consideration upon the Company receiving approval from its shareholders at an extraordinary general meeting to be convened in respect of the Disposal, if necessary, or a waiver from the Singapore Exchange Securities Trading Limited ( SGX-ST ) to comply with such requirement to seek approval from the shareholders of the Company. The balance payment of S$9,200,000 shall be payable by BJI to BJG in the following manner:- (i) (ii) (iii) (iv) on the date falling one (1) month from the Trigger Date (as defined hereinafter), BJI shall pay to BJG the sum of S$2,000,000; on the date falling two (2) months from the Trigger Date, BJI shall pay to BJG the sum of S$2,000,000; on the date falling three (3) months from the Trigger Date, BJI shall pay to BJG the sum of S$2,600,000; and on the date falling four (4) months from the Trigger Date, BJI shall pay to BJG the sum of S$2,600,000, (collectively, referred to as the Instalments ). The term Trigger Date shall mean the last date on which all the following events shall have occurred:- (i) (ii) completion of the proposed acquisition by Telemedia Pacific Communications Pte. Ltd., a wholly owned subsidiary of the Company, of Multi Skies Nusantra Limited (the Acquisition ). Please refer to the announcement dated 1 April 2010 released by the Company via the SGXNET for details in connection with the Acquisition; and the Company receiving approval from its shareholders at an extraordinary general meeting to be convened in respect of the Disposal, if necessary, or a waiver from the SGX-ST to comply with such requirement to seek approval from the shareholders of the Company. As security for the payment of the Instaments, BJI had agreed to create a second charge over 600,000,000 shares that it beneficially owns in the capital of the Company in favour of BJG. 4. Condition Precedent The Disposal is not subject to any condition precedent. 2
5. Rationale The disposal of the Accounts Receivables will allow the Company to write back approximately S$14.3 million to its profit and loss account in respect of the Accounts Receivables, of which S$39,818,540.64 have been impaired and fully provided. Accordingly, the Directors of the Company are of the opinion that the Disposal is in the best interests of the Company. 6. Effective Date BJG and BJI have agreed that the Accounts Receivables shall be deemed to have been transferred and assigned to BJI with effect from 31 March 2010. Accordingly any collection of the Accounts Receivables received by BJG on or after 31 March 2010 shall be accounted to and paid over to BJI. 7. Financial Effects The net sales proceeds from the Disposal after deducting all related expenses is estimated to be approximately S$16.1 million. The carrying net book value attributable to the Accounts Receivables in the audited consolidated financial statements of the Group as at 30 September 2008 was as follows:- (a) (b) in respect of S$39,818,540.64, the carrying value was zero as the same was fully impaired and provided for; and in respect of S$1,784,387.11, the carrying value was S$1,784,387.11 after adjustments for receivables collected between 30 September 2008 and the date of the Agreement. Accordingly, the gain of the net sales proceeds over the net book value is approximately S$14.3 million. Upon completion of the Disposal, the net gain on the Disposal is approximately S$14.3 million. The proforma financial effects of the Disposal are purely for illustrative purposes and are neither indicative of the actual financial effects of the Disposal on the net tangible liabilities ( NTL ) and losses per share ( LPS ) of the Group nor indicative of the financial performance of the Group for the financial year ended 30 September 2008. The proforma financial effects have been prepared based on the audited consolidated financial statements of the Group for its financial year ended 30 September 2008. 3
(a) NTL Assuming that the Disposal had been completed on 30 September 2008, the Disposal would have the following impact on the NTL of the Group:- NTL of the Group (S$ 000) NTL per share (cents) Before Disposal (21,128) (2.41) After Disposal (6,750) (0.77) (b) LPS Assuming that the Disposal had been completed on 1 October 2007, the Disposal would have the following impact on the losses of the Group:- Net loss attributable to shareholders (S$ 000) LPS (cents) Before Disposal (30,580) (3.49) After Disposal (16,202) (1.85) 8. Use of Proceeds The net sales proceeds from the Disposal will be used to fund any expansion or acquisition of new businesses which the Directors of the Company may approve. Pending the deployment of the net proceeds for such purposes, the net proceeds may be placed in deposits with financial institutions or invested in short term money market instruments as the Directors may, in their absolute discretion, deem fit. 9. Relative Figures under Chapter 10 of the Listing Manual The relative figures for the Disposal computed on the bases set out in Rule 1006 of the Listing Manual of the SGX-ST and based on the unaudited consolidated financial statements of the Group for the fifteen month financial period ended 31 December 2009 are set out below:- 4
Disposal (S$,000) The Group (S$ 000) % (a) (b) Net asset value (1) of the assets to be disposed of compared with the Group s net asset value as at 31 December 2009 The net profits (2) attributable to the assets disposed of compared with the Group s net profits for the fifteen month financial period ended 31 December 2009 1,784 55,728 3.2 14,378 4,837 297.2 (c) Aggregate value of the consideration compared with the Company s market capitalisation as at 31 March 2010 (3) (being the market day immediately preceding the date of the execution of the Agreement) (d) The number of equity securities issued by the issuer as consideration for an acquisition, compared with the number of equity securities previously in issue 16,162 269,450 6.0 NA NA NA Notes:- (1) Net asset value is defined as total assets less total liabilities. (2) Net profits is defined as profit before income tax, minority interests and extraordinary items. (3) The market capitalisation of the Company is determined by multiplying the number of shares by the weighted average price of such shares transacted on 31 March 2010 of S$0.04494 per share with the issued share capital of the Company of 5,995,762,828 shares. 10. Information on BJI As at the date of this announcement, BJI held 644,774,887 shares in the capital of Company, representing approximately 10.75% of the issued capital of the Company. It is 5
a substantial shareholder of the Company but is not a controlling shareholder of the Company within the meaning of Chapter 9 of the Listing Manual. 11. Interests of Directors and Controlling Shareholders Mr Lam Ah Seng @ Lam Pang Chuang is a Director of the Company. He is also a director and shareholder of BJI. As at the date of this announcement, Mr Lam held 38,889,772 shares in the capital of BJI, representing approximately 21.4% of the issued share capital of BJI. BJI is not an associate of Mr Lam within the meaning of Chapter 9 of the Listing Manual. In order to avoid any conflict of interest, Mr Lam has refrained from voting in respect of any resolution made by the board of Directors of the Company in respect of the Disposal. Save as disclosed above, none of the Directors or controlling shareholders is interested, directly or indirectly, in the Disposal. 12. Directors Responsibility Statement The Directors (including those who have been delegated supervision of this announcement) collectively and individually accept full responsibility for the accuracy of the information given in this announcement and confirm, having made all reasonable enquiries, that to the best of their knowledge and belief, the facts stated and opinions expressed in this announcement are fair and accurate in all material respects as at the date hereof, and that there are no material facts the omission of which would make this announcement misleading in any material respect. Where information has been extracted from published or otherwise available sources, the sole responsibility of the Directors has been to ensure that such information has been accurately and correctly extracted from these sources or, as the case may be, accurately reflected or reproduced in this Announcement. 13. Document for Inspection A copy of the Agreement may be inspected during normal business hours at the registered office of the Company at 25 Circular Road Singapore 049381 for a period of three months from the date of this announcement. By Order of the Board Ban Joo & Company Limited HADY HARTANTO Executive Deputy Chairman 1 April 2010 6