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i) The sale consideration for the Proposed Disposal of USD4,351,284.95 was determined on a willing buyer willing seller basis after taking into consideration the Assets Valuation Report as at 30 June 2006 provided by Tianjin Jin Ping Xie Tong Certified Public Accountants Firm and the year 2006 Audit Report of KTPCO and the Audit Report up to 28 February 2007 provided by Tianjin Jin Da Xin Certified Public Accountants Firm, China.
ii) Salient Terms of the Agreement
a) GGL's 60% shareholding in KTPCO is sold to TPCO free of encumbrances.
iii) The Proposed Disposal is expected to be completed approximately in 5 months from the date of the Agreement.
3. Rationale For The Proposed Disposal
RM million
6. Effects Of The Proposed Disposal
The Proposed Disposal:
i) Does not have any effect on FACBII's share capital.
Upon completion, the Proposed Disposal is estimated to result in a gain of RM2.0 million to the consolidated accounts of FACBII.
8. Directors And Substantial Shareholders' Interests
News
Facb Industries Incorporated Berhad's Wholly Owned Subsidiary Global Glister limited Entered Into Agreement To Dispose 60% Registered Shareholding In Kanzen Tpco Limited
BackApr 27, 2007
1. IntroductionThe Board of Directors of FACB Industries Incorporated Berhad ("FACBII") ("Board") wishes to announce that FACBII's wholly-owned subsidiary Global Glister Limited ("GGL") has entered into a Share Transfer Agreement with TPCO Investment Co. Ltd ("TPCO") on 24 April 2007 ("Agreement") to dispose of its entire 60% registered shareholding in Kanzen TPCO Limited ("KTPCO") to TPCO ("Proposed Disposal"), its joint venture partner in KTPCO. TPCO holds the remaining 40% shareholding in KTPCO.
KTPCO is a joint venture company incorporated in Tianjin, China pursuant to a joint venture agreement entered into on 21 November 2002 between GGL and TPCO for the manufacturing of stainless steel welded pipes and butt-weld fittings principally for China and exports. KTPCO has a registered capital of USD7.0 million. GGL and TPCO had contributed by way of cash their proportionate 60% and 40% registered capitals in KTPCO which were USD4.2 million and USD2.8 million respectively. KTPCO commenced its business operation on 1 January 2004.
2. Details Of The Proposed Disposal
KTPCO is a joint venture company incorporated in Tianjin, China pursuant to a joint venture agreement entered into on 21 November 2002 between GGL and TPCO for the manufacturing of stainless steel welded pipes and butt-weld fittings principally for China and exports. KTPCO has a registered capital of USD7.0 million. GGL and TPCO had contributed by way of cash their proportionate 60% and 40% registered capitals in KTPCO which were USD4.2 million and USD2.8 million respectively. KTPCO commenced its business operation on 1 January 2004.
i) The sale consideration for the Proposed Disposal of USD4,351,284.95 was determined on a willing buyer willing seller basis after taking into consideration the Assets Valuation Report as at 30 June 2006 provided by Tianjin Jin Ping Xie Tong Certified Public Accountants Firm and the year 2006 Audit Report of KTPCO and the Audit Report up to 28 February 2007 provided by Tianjin Jin Da Xin Certified Public Accountants Firm, China.
ii) Salient Terms of the Agreement
a) GGL's 60% shareholding in KTPCO is sold to TPCO free of encumbrances.
b) The Agreement shall take effect after obtaining approvals from Tianjin State-Owned Assets Supervision And Administration Commission and Tianjin Commission Of Commerce, China. Such applications shall be made by TPCO within 10 working days after execution by both parties of the Agreement.
c) TPCO or its affiliated company or KTPCO shall fully settle the loan provided by Oversea-Chinese Banking Corporation Limited, Tianjin, China to KTPCO of principal sum USD3,460,727.20 and relevant interest within 15 working days after obtaining the approvals as stated in item (b) above. FACBII shall cease to be a guarantor to the said loan upon the full repayment.
d) TPCO or its affiliated company or KTPCO shall repay the trade/financial support provided by the FACBII Group to KTPCO of USD2,807,507.04 within 15 working days after obtaining the approvals as stated in item (b) above.
e) Sale consideration (after deducting tax, if applicable, on the part of the vendor i.e. GGL) shall be paid by TPCO in cash and in one lump sum within 20 working days after obtaining the approvals as stated in item (b) above.
e) Sale consideration (after deducting tax, if applicable, on the part of the vendor i.e. GGL) shall be paid by TPCO in cash and in one lump sum within 20 working days after obtaining the approvals as stated in item (b) above.
iii) The Proposed Disposal is expected to be completed approximately in 5 months from the date of the Agreement.
KTPCO's performance has not been satisfactory. The proceeds from the Proposed Disposal will be used as working capital for the Group's existing operations, repayment of borrowings as well as for future investments.
4. Financial Information On KTPCORM million
a. Original Cost of Investment 16.0 *
b. Net loss for the year 1.8 **
c. Net assets 23.0 **
Remarks:
* Fully invested on 12 September 2003
** Based on the audited accounts for the year ended 30 June 2006
5. Past Five Years Audited Financial Information And Latest Interim Results On KTPCO
b. Net loss for the year 1.8 **
c. Net assets 23.0 **
Remarks:
* Fully invested on 12 September 2003
** Based on the audited accounts for the year ended 30 June 2006
 |
1/1/04 to 30/6/04
RM'000 |
30/6/05
RM'000 |
30/6/06
RM'000 |
Unaudited 8 months to 28/2/07
RM'000 |
| Turnover |
2,247
|
34,036
|
34,874
|
24,522
|
| Profit Before Tax |
(1,489)
|
(336)
|
(1,823)
|
144
|
| Profit After Tax & Minority Innterest |
(1,489)
|
(336)
|
(1,823)
|
144
|
6. Effects Of The Proposed Disposal
The Proposed Disposal:
i) Does not have any effect on FACBII's share capital.
ii) The effect of the transaction on the earnings per share, net assets per share and gearing of the FACBII Group:
Audited as at Proforma after Proposed
30 June 2006 Disposal as at 30 June 2006
a. Earnings per share (18.61) sen (17.07) sen
b. Net assets per share RM2.24 RM2.28
c. Gearing 0.63 times 0.49 times
iii) Will not have any effect on the shareholdings of the substantial shareholders of FACBII.
Upon completion of the Proposed Disposal, KTPCO will cease to be a subsidiary of FACBII.
7. Expected Gains Or Losses Arising From The Proposed DisposalAudited as at Proforma after Proposed
30 June 2006 Disposal as at 30 June 2006
a. Earnings per share (18.61) sen (17.07) sen
b. Net assets per share RM2.24 RM2.28
c. Gearing 0.63 times 0.49 times
iii) Will not have any effect on the shareholdings of the substantial shareholders of FACBII.
Upon completion of the Proposed Disposal, KTPCO will cease to be a subsidiary of FACBII.
Upon completion, the Proposed Disposal is estimated to result in a gain of RM2.0 million to the consolidated accounts of FACBII.
8. Directors And Substantial Shareholders' Interests
None of the Directors of FACBII and persons connected to the Directors have any interest, either direct or indirect, in the Proposed Disposal.
None of the major shareholders of FACBII and persons connected to the major shareholders have any interest, either direct or indirect, in the Proposed Disposal.
9. Board of Directors' OpinionNone of the major shareholders of FACBII and persons connected to the major shareholders have any interest, either direct or indirect, in the Proposed Disposal.
The Board is of the opinion that the Proposed Disposal is in the best interest of the Company.
10. Approvals RequiredThe Proposed Disposal is subject to the approvals of Tianjin State-Owned Assets Supervision And Administration Commission and Tianjin Commission Of Commerce, China. The Proposed Disposal is not subject to the approval of the shareholders of FACBII.
11. Document Available For InspectionThe Agreement is available for inspection for 2 weeks from the date of the announcement to Bursa Malaysia from 9.00 a.m. to 5.00 p.m. during business hours at the registered office of the Company at MNI Twins, Tower 1, Level 13, 11 Jalan Pinang, 50450 Kuala Lumpur.