ASIA KNIGHT BERHAD ( A-KNIGHT OR THE COMPANY ) (I) (II) (III) (IV) (V) (VI) (VII) PROPOSED SHARE PREMIUM REDUCTION; PROPOSED CAPITAL REDUCTION; PROPOSED RIGHTS ISSUE WITH WARRANTS; PROPOSED ACQUISITION; PROPOSED SPECIAL ISSUE; PROPOSED IASC; AND PROPOSED AMENDMENT (COLLECTIVELY REFERRED TO AS THE PROPOSED REGULARISATION PLAN ) (Unless stated otherwise, definitions used in this amended announcement shall carry the same meaning as defined in the Company s announcement in relation to its Proposed Regularisation Plan dated 5 April 2016) 1. INTRODUCTION Further to the announcement made by the Company on 5 April 2016 in relation to the Proposed Regularisation Plan, TA Securities Holdings Berhad ( TA Securities ), on behalf of A-Knight, wishes to announce that A-Knight and the Vendors had on 14 April 2016 entered into a Supplemental Share Sale Agreement to vary certain terms in the SSA ( Supplemental SSA ). 2. DETAILS OF THE PROPOSED REGULARISATION PLAN 2.1 Summary of the amendments to the Proposed Regularisation Plan The summary of the material amendments to the scheme of the Proposed Regularisation Plan are as follows:- As announced on 5 April 2016 Proposed Rights Issue with Warrants A renounceable rights issue of 406,930,356 Rights Shares together with 406,930,356 Warrants at an issue price of RM0.10 per Rights Share on the basis of seven (7) Rights Shares for every one (1) A-Knight Share held after the Proposed Capital Reduction together with one (1) free Warrant for every one (1) Rights Share subscribed As amended pursuant to the Supplemental SSA A renounceable rights issue of 639,461,988 Rights Shares together with 639,461,988 Warrants at an issue price of RM0.10 per Rights Share on the basis of eleven (11) Rights Shares for every one (1) A-Knight Share held after the Proposed Capital Reduction together with one (1) free Warrant for every one (1) Rights Share subscribed Proposed Special Issue Proposed issuance of up to 200,000,000 Issuance Shares to investor(s) to be identified later at an issue price of RM0.10 per Issuance Share The Board had resolved not to undertake the Proposed Special Issue. Save as disclosed above, the other salient terms of the Proposed Regularisation Plan remain unchanged. 1
Asia Knight Berhad - Proposed Regularisation Plan 2.2 Rationale for the Supplemental SSA The Board of A-Knight had resolved to fund the Proposed Acquisition entirely from proceeds raise from the Proposed Rights Issue with Warrants and therefore will not undertake the Proposed Special Issue. The existing shareholders of A-Knight will now have the opportunity to subscribe for the Rights Shares to further participate in the equity of the Company and the prospects and future growth upon the completion of the Proposed Acquisition, without having their shareholdings percentage in the Company being further diluted by the Proposed Special Issue after the issuance of the Consideration Shares. 3. PROPOSED UTILISATION OF PROCEEDS The Proposed Rights Issue with Warrants is expected to raise gross proceeds of RM63.95 million. The proposed utilisation of proceeds is as follows:- Proposed utilisation Expected timeframe for utilisation of proceeds (from the date of listing of the Rights Shares) RM million Proposed Acquisition Immediate 58.00 Working capital (1) Within 12 months 3.35 Estimated expenses in relation to the Proposed Regularisation Plan (2) Immediate 2.60 Total gross proceeds 63.95 (1) The Board intends to utilise a portion of the proceeds as general working capital to support the business operations which include, but are not limited to, financing the day-to-day operations, including overhead and operating expenditure as well as administrative expenses. (2) The estimated expenses in relation to the Proposed Regularisation Plan consist of professional fees, fees payable to the relevant authorities, expenses to convene the extraordinary general meeting, printing, advertising and other ancillary expenses. Any surplus or shortfall for the estimated expenses in relation to the Proposed Regularisation Plan will be adjusted accordingly to/from the working capital of the A-Knight. The proceeds arising from the exercise of Warrants are dependent on the total number of Warrants exercised during the tenure of the Warrants. The proceeds from the exercise of the Warrants will be received on an as and when basis over the tenure of the Warrants. For illustrative purposes, based on the exercise price of the Warrants of RM0.10 per Warrant, the gross proceeds expected to be raised from the exercise of Warrants pursuant to the Proposed Regularisation Plan is RM63.95 million. Such proceeds shall be utilised for working capital requirements. 2
Asia Knight Berhad - Proposed Regularisation Plan 4. EFFECTS OF THE PROPOSED REGULARISATION PLAN The effects of the Proposed Regularisation Plan after incorporating all the above amendments are as follows:-. 4.1 Share capital 4.2 EPS The Proposed Share Premium Reduction will have no impact on the number of shares and par value of the Company. The effects of the Proposed Regularisation Plan on the issued and paid-up share capital of the Company are as follows:- Par Value RM No. of shares Issued and paid-up share capital as at the LPD 1.00 58,132,908 58,132,908 After the Proposed Capital Reduction 0.10 58,132,908 5,813,291 To be issued pursuant to the Proposed Rights Issue with Warrants 0.10 639,461,988 63,946,199 RM 697,594,896 69,759,490 To be issued pursuant to the Proposed Acquisition 0.10 300,000,000 30,000,000 997,594,896 99,759,490 To be issued pursuant to the full exercise of the Warrants 0.10 639,461,988 63,946,198 Total enlarged issued and paid-up share capital 1,637,056,884 163,705,688 The Proposed Regularisation Plan is expected to be earnings accretive and is expected to contribute positively to the long-term future earnings of the enlarged A-Knight Group. However, barring any unforeseen circumstances, the EPS of the enlarged A-Knight Group may be diluted in the future financial years as a result of the increase in the issued and paid-up capital of the Company arising from the exercise of the Warrants into new A-Knight Shares. [The rest of this page has been intentionally left blank] 3
4.3 NA and gearing The proforma effects of the Proposed Regularisation Plan on the NA and gearing of A-Knight based on its audited financial statements as at 30 June 2015 are set out below:- Pro Forma I Pro Forma II Pro Forma III Pro Forma IV Pro Forma V Audited as at 30 June 2015 After the Proposed Share Premium Reduction Forma I and the Proposed Capital Reduction Forma II and the Proposed Rights Issue with Warrants Forma III and the Proposed Acquisition Forma IV and assuming full exercise of Warrants RM 000 RM 000 RM 000 RM 000 RM 000 RM 000 Share capital 58,133 58,133 5,813 (ii) 69,759 99,759 163,705 (v) Share premium 2,464 - (i) - - - - Other reserve 38 38 38 38 38 38 Accumulated losses (53,597) (51,133) (i) 1,187 (ii) (65,359) (iii) (65,359) (1,413) Warrant reserve - - - 63,946 (iv) 63,946-7,038 7,038 7,038 68,384 98,384 162,330 No. of shares in issue ( 000) 58,133 58,133 58,133 697,595 997,595 1,637,057 Par value (RM) 1.00 1.00 0.10 0.10 0.10 0.10 NA per share (RM) 0.12 0.12 0.12 0.10 0.10 0.10 Total borrowings (RM 000) - - - - 5,949 5,949 Gearing (times) - - - - 0.06 0.04 (i) The reduction of the share premium amounting to RM2,463,943 arising from the Proposed Reduction of Share Premium will be credited to the Accumulated Losses Account. (ii) The reduction of the issued and paid-up share capital amounting to RM52,319,617 arising from the Proposed Capital Reduction will be credited to the Accumulated Losses Account. (iii) After accounting for the warrants reserves based on the issuance of 639,461,988 Warrants at a fair value of RM0.10 per Warrant and after deducting estimated expenses in relation to the Proposed Regularisation Plan of RM2.6 million. For illustrative purposes, the Warrants are assumed to have a fair value of RM0.10 each based the information extracted from Bloomberg as at the LPD. (iv) Arising from the issuance of Warrants pursuant to the Proposed Rights Issue of Shares with Warrants. (v) After assuming the full exercise of 639,461,988 Warrants at the exercise price of RM0.10 per Warrant. 4
4.4 Substantial Shareholders Shareholdings The Proposed Share Premium Reduction will have no impact on the substantial shareholders shareholdings. The effects of the shareholding on the substantial shareholders of A-Knight are as follows:- As at the LPD Proforma 1 - After the Proposed Rights Issue with Warrants (4) Direct Indirect Direct Indirect Substantial Shareholders No. of shares % No. of shares % No. of shares % No. of shares % Pahangply Holdings Berhad 16,274,923 28.00 - - 195,299,076 28.00 - - See Seng Lai & Sons Realty Sdn Bhd 8,587,831 14.77 - - 103,053,972 14.77 - - See Han Liong 1,118,300 1.92 31,851,245 (1) 54.79 13,419,600 1.92 382,214,940 (1) 54.79 See Teck Wah 3,479,812 5.99 29,489,733 (2) 50.73 41,757,744 5.99 353,876,796 (2) 50.73 See Seng Hong 429,000 0.74 17,608,060 (3) 30.29 5,148,000 0.74 211,296,720 (3) 30.29 Vendors - - - - - - - - (1) Deemed interest pursuant to Section 6A of the Act by virtue of his interest in Pahangply Holdings Berhad, See Seng Lai & Sons Realty Sdn Bhd, NGE Leasing & Credit Sdn Bhd, Nanyang father, See Teck Wah. (2) Deemed interest pursuant to Section 6A of the Act by virtue of his interests in Pahangply Holdings Berhad, See Seng Lai & Sons Realty Sdn Bhd, NGE Leasing & Credit Sdn Bhd, Nanyang son, See Han Liong. (3) Deemed interest pursuant to Section 6A of the Act by virtue of his interest in Pahangply Holdings Berhad, NGE Leasing & Credit Sdn Bhd, Nanyang General Enterprises Sdn Bhd, Nanyang Timber Industry Sdn Bhd and Far East Navigation (Malaysia) Sdn Bhd. (4) Assuming all the shareholders of A-Knight subscribe to all their respective entitlement of the Rights Shares under the Proposed Rights Issue with Warrants. [The rest of this page has been intentionally left blank] 5
Asia Knight Berhad - Proposed Regularisation Plan Proforma 2 - forma 1 and the Proposed Acquisition Proforma 3 - forma 2 and the Exercise of Warrants Direct Indirect Direct Indirect Substantial Shareholders No. of shares % No. of shares % No. of shares % No. of shares % Pahangply Holdings Berhad 195,299,076 19.58 - - 374,323,229 22.87 - - See Seng Lai & Sons Realty Sdn Bhd 103,053,972 10.33 - - 197,520,113 12.07 - - See Han Liong 13,419,600 1.35 382,214,940 (1) 38.31 25,720,900 1.57 732,578,635 1) 44.75 See Teck Wah 41,757,744 4.19 353,876,796 (2) 35.47 80,035,676 4.89 678,263,859 (2) 41.43 See Seng Hong 5,148,000 0.52 211,296,720 (3) 21.18 9,867,000 0.60 404,985,380 (3) 24.74 Vendors 300,000,000 30.07 - - 300,000,000 18.33 - - (1) Deemed interest pursuant to Section 6A of the Act by virtue of his interest in Pahangply Holdings Berhad, See Seng Lai & Sons Realty Sdn Bhd, NGE Leasing & Credit Sdn Bhd, Nanyang father, See Teck Wah. (2) Deemed interest pursuant to Section 6A of the Act by virtue of his interests in Pahangply Holdings Berhad, See Seng Lai & Sons Realty Sdn Bhd, NGE Leasing & Credit Sdn Bhd, Nanyang son, See Han Liong. (3) Deemed interest pursuant to Section 6A of the Act by virtue of his interest in Pahangply Holdings Berhad, NGE Leasing & Credit Sdn Bhd, Nanyang General Enterprises Sdn Bhd, Nanyang Timber Industry Sdn Bhd and Far East Navigation (Malaysia) Sdn Bhd [The rest of this page has been intentionally left blank] 6
4.5 Convertible Securities As at the LPD, A-Knight does not have any convertible securities. 5. DOCUMENTS FOR INSPECTION The Supplementary SSA will be available for inspection at the registered office of A-Knight at No 9, Jalan Bayu Tinggi, 2A/KS6, Taipan 2 Batu Unjur, 41200 Klang, Selangor Darul Ehsan during 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 14 April 2016. 7