TRIVE PROPERTY GROUP BERHAD (FORMERLY KNOWN AS ETI TECH CORPORATION BERHAD) ( TRIVE OR THE COMPANY ) (I) (II) PROPOSED REDUCTION OF THE EXISTING ISSUED AND PAID-UP SHARE CAPITAL OF TRIVE INVOLVING THE CANCELLATION OF RM0.075 FROM THE PAR VALUE OF EVERY EXISTING ORDINARY SHARE OF RM0.10 EACH IN THE COMPANY PURSUANT TO SECTION 64 OF THE COMPANIES ACT, 1965 ( ACT ) ( PROPOSED PAR VALUE REDUCTION ) AND THE PROPOSED REDUCTION OF THE SHARE PREMIUM ACCOUNT OF RM1,785,000 PURSUANT TO SECTIONS 60 AND 64 OF THE ACT ( PROPOSED SHARE PREMIUM REDUCTION ) (COLLECTIVELY, THE PROPOSED PAR VALUE REDUCTION AND THE PROPOSED SHARE PREMIUM REDUCTION ARE REFERRED TO AS THE PROPOSED CAPITAL REDUCTION ); AND PROPOSED AMENDMENT TO THE MEMORANDUM OF ASSOCIATION ( MA ) OF THE COMPANY ( PROPOSED AMENDMENT ) (COLLECTIVELY REFERRED TO AS THE PROPOSALS ) (In this announcement, the definition of Share(s) or Trive Share(s) may refer to ordinary shares of the Company with par value of RM0.10 each prior to the Proposed Par Value Reduction or ordinary shares of the Company with par value of RM0.025 each after the Proposed Par Value Reduction, as the context so requires.) 1. INTRODUCTION On behalf of the Board of Directors of Trive ( Board ), Mercury Securities Sdn Bhd ( Mercury Securities ) wishes to announce that the Company proposes to undertake the Proposals. 2. DETAILS OF THE PROPOSALS 2.1 Proposed Capital Reduction As at 31 July 2014, the audited accumulated losses of Trive are at RM96,307,368. The Proposed Capital Reduction has the objective of reducing / eliminating the accumulated losses of the Company to the extent possible via the implementation of the Proposed Par Value Reduction and the Proposed Share Premium Reduction. 2.1.1 Proposed Par Value Reduction The Proposed Par Value Reduction entails reduction of the par value of every Share via the cancellation of RM0.075 from the existing par value of RM0.10 of every Share pursuant to Section 64 of the Act. As at 26 October 2015, being the latest practicable date prior to this announcement ( LPD ), the authorised share capital of the Company is RM500,000,000 divided into 5,000,000,000 Shares with par value of RM0.10 each, out of which RM99,866,663 comprising 998,666,629 Shares have been issued and fully paid-up. The Proposed Par Value Reduction will give rise to a credit of RM74,899,997 under the Minimum Scenario (as defined herein) and a credit of RM87,374,415 under the Maximum Scenario (as defined herein). The total credit arising from the Proposed Par Value Reduction will be used to set off against the accumulated losses of the Company. 1
2.1.2 Proposed Share Premium Reduction The Proposed Share Premium Reduction involves the reduction of the Company s share premium account of RM1,785,000 pursuant to Sections 60(2) and 64(1) of the Act and such credit shall be utilised to set off against the accumulated losses of the Company. Based on the audited financial statements of the Company as at 31 July 2014, the share premium account of the Company stood at RM1,785,000 and remains the same as at 31 July 2015, based on the latest unaudited financial statements of the Company for the twelve (12)-month financial period ended 31 July 2015. For illustrative purposes, the effects of the Proposed Capital Reduction on the (accumulated losses) / retained earnings of the Company and the Group are as follows:- Minimum Scenario Maximum Scenario : Assuming none of the 166,325,568 outstanding warrants 2015 / 2017 ( Warrants A ) are exercised into new Trive Shares. : Assuming all the 166,325,568 outstanding Warrants A are fully exercised into new Trive Shares prior to the implementation of the Proposals. Minimum Scenario Company level Audited as at 31 July 2014 Unaudited as at 31 July 2015 Audited as at 31 July 2014 (Restated*) Group level Unaudited as at 31 July 2015 RM 000 RM 000 RM 000 RM 000 Accumulated losses (96,307) (97,895) (32,450) (49,364) Add:- Credit arising from the:- - Proposed Par Value Reduction 74,900 74,900 74,900 74,900 - Proposed Share Premium Reduction 1,785 1,785 1,785 1,785 Resultant (accumulated losses) / retained earnings (19,622) (21,210) 44,235 27,321 2
Maximum Scenario Company level Audited as at 31 July 2014 Unaudited as at 31 July 2015 Audited as at 31 July 2014 (Restated*) Group level Unaudited as at 31 July 2015 RM 000 RM 000 RM 000 RM 000 Accumulated losses (96,307) (97,895) (32,450) (49,364) Add:- Credit arising from the:- - Proposed Par Value Reduction 87,374 87,374 87,374 87,374 - Proposed Share Premium Reduction 1,785 1,785 1,785 1,785 Resultant (accumulated losses) / retained earnings (7,148) (8,736) 56,709 39,795 Note:- * Based on the latest unaudited consolidated financial statements of Trive for the twelve (12)-month financial period ended 31 July 2015. The effects of the Proposed Capital Reduction on the share capital of the Company upon its completion are further illustrated in Section 4.1 of this announcement. In any event, the Proposed Capital Reduction will not result in any adjustment to the:- (i) (ii) (iii) (iv) authorised share capital of the Company of RM500,000,000 but will be divided into 20,000,000,000 Shares of RM0.025 each; total number of issued and paid-up Shares which will remain intact at 998,666,629 Shares under the Minimum Scenario and 1,164,992,197 Shares under the Maximum Scenario, but will comprise Shares of RM0.025 each. Accordingly, the issued and paid-up share capital of the Company will reduce from RM99,866,663 as at the LPD to RM24,966,666 under the Minimum Scenario and RM29,124,805 under the Maximum Scenario; share reference price of the Company or number of Shares held by the shareholders of the Company; and number and exercise price of the outstanding Warrants A. Warrant holders who exercise their Warrants A, following completion of the Proposed Par Value Reduction, will be receiving Shares of RM0.025 each as opposed to Shares of RM0.10 each. The Proposed Capital Reduction will be effective upon lodgement of a sealed copy of the order of the High Court of Malaya ( High Court ) for the Proposed Par Value Reduction and the Proposed Share Premium Reduction with the Registrar of Companies. 3
2.2 Proposed Amendment The Proposed Amendment entails amendment to the MA of Trive to reflect the change in the par value of each Trive Share from RM0.10 each to RM0.025 each, as a result of the Proposed Par Value Reduction. The details of the Proposed Amendment are as follows:- Clause Existing Provision Revised Provision Clause VI of the MA The share capital of the Company is RM500,000,000.00 divided into 5,000,000,000 ordinary shares of RM0.10 each. The shares in the original or any increased capital may be divided into several classes and there may be attached thereto respectively any preferential, deferred or other special rights, privileges, conditions or restrictions as to dividends, capital, voting or otherwise. The share capital of the Company is RM500,000,000.00 divided into 20,000,000,000 ordinary shares of RM0.025 each. The shares in the original or any increased capital may be divided into several classes and there may be attached thereto respectively any preferential, deferred or other special rights, privileges, conditions or restrictions as to dividends, capital, voting or otherwise. 3. RATIONALE FOR THE PROPOSALS 3.1 Proposed Capital Reduction The Proposed Capital Reduction provides the Company with the opportunity to rationalise its financial position by reducing the accumulated losses of the Company to the extent possible. The reduction of accumulated losses in the statements of financial position of the Company and the Group will enhance its credibility with the bankers, customers, suppliers, investors and other stakeholders and also provide a better financial platform for the Group s future growth moving forward. In addition, the Proposed Par Value Reduction will also provide the Company with greater flexibility to raise funds at a more attractive price and to implement future corporate exercises which entail the issuance of equity and equity-related securities including, amongst others, ordinary shares and convertible securities, thus enabling Trive to take advantage of future fund raising opportunities as and when the need arises. In undertaking the Proposed Capital Reduction, the Company and its subsidiaries ( Group ) has also considered that the Proposed Capital Reduction would not result in any change to its net asset ( NA ) position. 3.2 Proposed Amendment The Proposed Amendment is undertaken to facilitate the change in the par value of Trive Shares from RM0.10 each to RM0.025 each, as a result of the Proposed Par Value Reduction. 4
4. EFFECTS OF THE PROPOSALS The Proposed Amendment will not have any effect on the share capital, NA and gearing, earnings and earnings per Share ( EPS ), substantial shareholders shareholding as well as convertible securities of Trive. The pro forma effects of the Proposed Capital Reduction are as follows:- 4.1 Issued and paid-up share capital Par Value Minimum Scenario Maximum Scenario No. of Shares No. of Shares RM ( 000) RM 000 ( 000) RM 000 Issued and paid-up share capital of Trive as at the LPD To be issued pursuant to full exercise of all the outstanding Warrants A Enlarged issued and paid-up share capital To be cancelled pursuant to the Proposed Capital Reduction After the Proposed Capital Reduction 0.10 998,667 99,867 998,667 99,867 0.10 - - 166,325 16,632 0.10 998,667 99,867 1,164,992 116,499 (0.075) - (74,900) - (87,374) 0.025 998,667 24,967 1,164,992 29,125 5
4.2 NA and gearing Minimum Scenario Group level (I) (II) Audited as at 31 July 2014 After (I) and the Proposed (Restated (1) ) After subsequent events (1) Capital Reduction RM 000 RM 000 RM 000 Share capital 77,690 99,867 (2) 24,967 Share premium 1,785 1,785 - Warrant reserve - 233 (2) 233 (Accumulated losses) / Retained earnings (32,450) (49,364) 27,071 (3) Shareholders fund / NA 47,025 52,521 52,271 Non-controlling interests (4) - - Total equity 47,021 52,521 52,271 No. of Trive Shares in issue ( 000) 776,899 998,667 998,667 NA per Trive Share (RM) 0.06 0.05 0.05 Total borrowings (RM 000) 28,950 4,123 4,123 Gearing (times) 0.62 0.08 0.08 Notes:- (1) Based on the latest unaudited consolidated financial statements of Trive for the twelve (12)-month financial period ended 31 July 2015. (2) After accounting for the issuance of 221,767,429 Shares and 166,325,568 Warrants A pursuant to a debt restructuring exercise, both of which were listed on 9 January 2015. (3) After deducting estimated expenses of RM250,000 to be incurred for the Proposals. 6
Maximum Scenario Group level (I) (II) (III) After (I) and assuming After (II) and the Audited as at 31 July 2014 After subsequent full exercise of all the Proposed Capital (Restated (1) ) events (1) outstanding Warrants A Reduction RM 000 RM 000 RM 000 RM 000 Share capital 77,690 99,867 (2) 116,499 29,125 Share premium 1,785 1,785 2,018 233 Warrant reserve - 233 (2) - - (Accumulated losses) / Retained earnings (32,450) (49,364) (49,364) 39,545 (3) Shareholders fund / NA 47,025 52,521 69,153 68,903 Non-controlling interests (4) - - - Total equity 47,021 52,521 69,153 68,903 No. of Trive Shares in issue ( 000) 776,899 998,667 1,164,992 1,164,992 NA per Trive Share (RM) 0.06 0.05 0.06 0.06 Total borrowings (RM 000) 28,950 4,123 4,123 4,123 Gearing (times) 0.62 0.08 0.06 0.06 Notes:- (1) Based on the latest unaudited consolidated financial statements of Trive for the twelve (12)-month financial period ended 31 July 2015. (2) After accounting for the issuance of 221,767,429 Shares and 166,325,568 Warrants A pursuant to a debt restructuring exercise, both of which were listed on 9 January 2015. (3) After deducting estimated expenses of RM250,000 to be incurred for the Proposals. 7
4.3 Earnings and EPS The Proposed Capital Reduction will not have any effect on the consolidated earnings and EPS of Trive. 4.4 Substantial shareholders shareholdings Based on the Company s Register of Substantial Shareholders, Trive does not have any substantial shareholders as at the LPD. Nonetheless, the Proposed Capital Reduction will not have any effect on the substantial shareholders shareholdings of the Company. 4.5 Convertible securities The Proposed Capital Reduction will not result in any adjustment to the exercise price and/or number of the outstanding Warrants A based on the terms of the deed poll governing Warrants A. Save for the outstanding Warrants A, the Company does not have any other outstanding convertible securities as at the LPD. 5. TENTATIVE TIMELINE Barring any unforeseen circumstances, the Board expects the Proposals to be completed in the first quarter of 2016. 6. APPROVALS REQUIRED The Proposals are subject to the approvals being obtained from the following parties:- (i) (ii) (iii) shareholders at an extraordinary general meeting to be convened for the Proposals; the order of the High Court pursuant to Sections 60 and 64 of the Act for the Proposed Capital Reduction; and any other relevant parties / authorities, if required. 7. INTER-CONDITIONALITY The Proposed Capital Reduction and Proposed Amendment are inter-conditional. Save for the above, the Proposals are not conditional upon any other corporate exercise undertaken or to be undertaken by the Company. 8. INTERESTS OF DIRECTORS, MAJOR SHAREHOLDERS AND/OR PERSONS CONNECTED WITH THEM None of the Directors, major shareholders of the Company and/or persons connected to them have any interest, direct and/or indirect in the Proposals. 8
9. DIRECTORS STATEMENT The Board, having considered all aspects of the Proposals, including but not limited to the rationale and financial effects of the Proposals, is of the opinion that the Proposals are in the best interests of the Company and its shareholders. 10. ADVISER Mercury Securities has been appointed as the Principal Adviser for the Proposals. This announcement is dated 2 November 2015. 9