UEM SUNRISE BERHAD ( UEM SUNRISE OR COMPANY ) PROPOSED JOINT VENTURE BETWEEN UEM SUNRISE AND EDGENTA TOWNSHIP MANAGEMENT SERVICES SDN BHD ( ETMSSB ), A WHOLLY-OWNED SUBSIDIARY OF UEM EDGENTA BERHAD (FORMERLY KNOWN AS FABER GROUP BERHAD) ( UEM EDGENTA ) ( PROPOSED JV ) 1. INTRODUCTION The Board of Directors ( Board ) of UEM Sunrise wishes to announce that UEM Sunrise had, on 30 November 2015, entered into a joint venture shareholders agreement ( JVA ) with ETMSSB, a wholly-owned subsidiary of UEM Edgenta (ETMSSB and UEM Sunrise are collectively referred to as the Parties ) to establish and operate a joint venture company in Malaysia ( JV Company ). 2. DETAILS OF THE PROPOSED JV 2.1 Capital of the JV Company The JV Company shall have an eventual issued and paid up share capital of RM3,900,000.00 ordinary share of RM1.00 each. The shareholding structure of the JV Company shall be as follows: Parties No. of Shares held Percentage of Shareholding Consideration (RM) ETMSSB 2,730,000 70% 2,730,000.00 UEM Sunrise 1,170,000 30% 1,170,000.00 Total 3,900,000 100% 3,900,000.00 2.2 Salient Terms and Features of the JVA No. Items Details 1. Purpose of JV Company : The business of the JV Company is to offer Township Management Services (Integrated Facilities Management, Estate Management) and Property (Stratified and Non-Stratified) Management Services (collectively referred to as Services ) 2. Completion : Completion will take place on a date to be mutually agreed but no later than 31 st December 2015 upon issuance and subscription of the new JV Company shares by the Parties. 3. Responsibilities of Parties : ETMSSB will be the lead operational partner for the delivery of the Services by the JV Company. UEM Sunrise will provide first right of refusal for the JV Company to undertake the provision of the Services for their development. The Parties will contribute capital in accordance to the proposed shareholding structure and jointly explore various business opportunities to expand the revenue base of the JV Company.
No. Items Details 4. Non-Competition : Neither Party nor its affiliates shall during the period of being the shareholder of the JV Company and for a period of 12 months after it ceases to be the shareholder of the JV Company: Carry on or be engaged as a shareholder or partner in any business similar to the JV Company (except for holding not more than 5% of any company listed in recognised stock exchange); Solicit any customer who is at any time within the prior 12 months had been a customer of the JV Company; and Solicit any person who was an employee of the JV Company within the prior 12 months, without the prior written consent of the other Party. 5. Termination of the JVA : The Agreement shall be terminated: (a) when the Shareholder ceases to hold any shares in the JV Company; or (b) when a resolution is passed by shareholders or creditors, or an order made by a court or other competent body or person instituting a process that shall lead to the JV Company being wound up and its assets being distributed among the JV Company's creditors, shareholders or other contributors. 3. SOURCE OF FUNDS UEM Sunrise will fund its investment in the JV Company through internally generated funds. 4. INFORMATION ON THE PARTIES ETMSSB ETMSSB was incorporated in Malaysia on 25 November 2015 under the Companies Act, 1965 as a private company limited by shares. ETMSSB became a wholly-owned subsidiary of UEM Edgenta on 30 November 2015. The authorised share capital is RM400,000.00 divided into 400,000 ordinary shares of RM1.00 each. The issued and paid-up share capital is RM2.00 divided into 2 ordinary shares of RM1.00 each. The authorised and paid up capital of ETMSSB may be increased from time to time. ETMSSB is incorporated to provide property and township management services to assets developed by third parties. The services offered by ETMSSB include but is not limited to Township Management Services, Stratified Management Services and Security Management Services.
UEM SUNRISE UEM Sunrise was incorporated in Malaysia as a public company limited by shares on 20 August 2008 under the Companies Act, 1965 as UEM Land Holdings Berhad. It assumed its present name on 13 June 2013. The authorised share capital is RM3,517,000,000.00 divided into 7,004,000,000 ordinary shares of RM0.50 each and 1,500,000,000 redeemable convertible preference shares of RM0.01 each. The issued and paid up share capital is RM2,276,643,176.03 divided into 4,537,436,037 ordinary shares of RM0.50 each and 792,515,753 redeemable convertible preference shares of RM0.01 each. The principal activity of UEM Sunrise is investment holding. The principal activities of its subsidiaries are property development, land trading, property investment, project procurement and management and investment holding. 5. RISK The risks related to the transaction in connection with the Proposed JV are typical to any commercial contract. These include breaches and non-performance of obligations under the Proposed Joint Venture. 6. RATIONALE FOR THE PROPOSED JV UEM Sunrise currently provides property management services for its various property development projects. The provision of these services are not part of UEM Sunrise s core business and the purpose of the Proposed JV is to allow UEM Sunrise to realign its focus on its core businesses of property development. 7. EFFECTS OF THE PROPOSED JV The Proposed JV will not have any material effect on UEM Sunrise s consolidated net assets, earnings and earnings per share in respect of the financial year ending 31 December 2015 and will not have any effect on UEM Sunrise s issued and paid-up share capital and substantial shareholders shareholdings. The Proposed JV is expected to contribute positively to UEM Sunrise s financial performance in the future. 8. APPROVALS REQUIRED The Proposed Joint Venture is not subject to the shareholders approval and/or any regulatory authorities. 9. ESTIMATED TIME FRAME OF COMPLETION Completion shall take place on a date to be mutually agreed between the Parties, which shall not be later than 31 December 2015.
10. INTERESTS OF DIRECTORS, MAJOR SHAREHOLDERS AND/OR PERSONS CONNECTED Save as disclosed below, none of the directors and major shareholders of UEMS and/or persons connected to them has any interest, direct and/or indirect, in the Proposed JV. As at to date, Khazanah holds 100.0% equity interest in UEM Group Berhad. UEMG, a major shareholder of UEMS, holds 66.1% equity interest in UEMS. ETMSSB is 100% held by UEM Edgenta which in turn is 70.7% held by UEMG. As such, Khazanah and UEMG are deemed interested in the Proposed JV. Tan Sri Dr Ir Ahmad Tajuddin Ali is the Chairman of UEMG and Non-Independent Non-Executive Chairman of UEMS while Dato Izzaddin Idris is the Group Managing Director / Chief Executive Officer of UEMG, Non-Independent Non-Executive Director of both UEMS and UEM Edgenta. Further, Mr Sheranjiv Sammanthan, a Non-Independent Non-Executive Director of UEMS, is a nominee of Khazanah. As such, they are deemed interested in the Proposed JV (collectively, the Interested Directors ). The Interested Directors have abstained from deliberating and voting on any resolutions pertaining to the Proposed JV at any Board meeting. None of the Interested Directors has any direct or indirect interest in UEMS. 11. AUDIT COMMITTEE RECOMMENDATION The Audit Committee of UEMS, after having considered all aspects of the Proposed JV, is of the opinion that the Proposed JV is: (i) (ii) (iii) in the best interest of UEMS; fair, reasonable and on normal commercial terms; and not detrimental to the interest of the minority shareholders of UEMS. 12. DIRECTORS RECOMMENDATION The Board (other than the Interested Directors), having considered all aspects of the Proposed JV, is of the opinion that the Proposed JV is in the best interest of UEM Sunrise and its minority shareholders. 13. OTHER INFORMATION REQUIRED UNDER THE MAIN MARKET LISTING REQUIREMENTS OF BURSA MALAYSIA SECURITIES BERHAD ( LISTING REQUIREMENTS ) The highest percentage ratio for the Proposed JV pursuant to Paragraph 10.02(g) of the Main Market Listing Requirements is 0.02%. This is a voluntary announcement based on Paragraph 10.08 of the Listing Requirements of Bursa Malaysia Securities Berhad.
14. TOTAL AMOUNT TRANSACTED WITH THE SAME RELATED PARTY FOR THE PRECEDING 12 MONTHS In the 12 months preceding the date of this announcement, there was no transaction by UEM Sunrise and/or its subsidiaries with UEM Group and persons connected to it other than the Proposed JV and recurrent related party transactions ( RRPT ) which were undertaken pursuant to the existing shareholders mandate in relation to RRPT which was obtained on 24 April 2014 and 21 May 2015. 15. DOCUMENT AVAILABLE FOR INSPECTION The JVA dated 30 November 2015 is available for inspection at the registered office of the Company at 19-2, Mercu UEM, Jalan Stesen Sentral 5, Kuala Lumpur Sentral, 50470 Kuala Lumpur, during normal business hours from Mondays to Fridays (except public holidays) for a period of three (3) months from the date of this announcement. This announcement is dated 30 November 2015.