This Circular is dated 29 June 2015 JIANKUN

THIS CIRCULAR (AS DEFINED HEREIN) IS IMPORTANT AND REQUIRES YOUR IMMEDIATE
THIS
THIS CIRCULAR
CIRCULAR (AS
(AS DEFINED
DEFINED HEREIN)
HEREIN) IS
IS IMPORTANT
IMPORTANT AND
AND REQUIRES
REQUIRES YOUR
YOUR IMMEDIATE
IMMEDIATE
ATTENTION.
ATTENTION.
ATTENTION.
If you are in any doubt as to the course of action to be taken, you should consult your stockbroker,
If
are
doubt
to
of
to
you
should
If you
you
are in
in any
any
doubt as
as
to the
the course
course
of action
action
to be
be taken,
taken,
youimmediately.
should consult
consult your
your stockbroker,
stockbroker,
bank
manager,
solicitor,
accountant
or other
professional
advisers
bank
manager,
solicitor,
accountant
or
other
professional
advisers
immediately.
bank
manager,
solicitor,
accountant
or
other
professional
advisers
immediately.
Bursa Malaysia Securities Berhad is not liable for any non-disclosure on the part of the Company, takes no
Bursa
Securities Berhad
is
not
for
non-disclosure on
the
of
takes
no
Bursa Malaysia
Malaysia
Berhad
is Circular,
not liable
liablemakes
for any
any
theitspart
part
of the
theorCompany,
Company,
takesand
no
responsibility
for Securities
the contents
of this
no non-disclosure
representation on
as to
accuracy
completeness
responsibility
for
the
contents
of
this
Circular,
makes
no
representation
as
to
its
accuracy
or
completeness
and
responsibility
for
the
contents
of
this
Circular,
makes
no
representation
as
to
its
accuracy
or
completeness
and
expressly disclaims any liability whatsoever for any loss howsoever arising from or in reliance upon the whole or
expressly
disclaims any
liability
whatsoever
expressly
any of
liability
whatsoever for
for any
any loss
loss howsoever
howsoever arising
arising from
from or
or in
in reliance
reliance upon
upon the
the whole
whole or
or
any
part ofdisclaims
the contents
this Circular.
any
part
of
the
contents
of
this
Circular.
any part of the contents of this Circular.
JIANKUN
INTERNATIONAL
BERHAD
JIANKUN
INTERNATIONAL
BERHAD
JIANKUN
INTERNATIONAL
(Company
No. 111365-U)BERHAD
(Company
No.
(Company
No. 111365-U)
111365-U)
(Incorporated in Malaysia
under
the Companies Act, 1965)
(Incorporated
(Incorporated in
in Malaysia
Malaysia under
under the
the Companies
Companies Act,
Act, 1965)
1965)
CIRCULAR
TO SHAREHOLDERS
IN RELATION
TO THE
CIRCULAR
CIRCULAR TO
TO SHAREHOLDERS
SHAREHOLDERS IN
IN RELATION
RELATION TO
TO THE
THE
PROPOSED
ACQUISITION
OF
93
FREEHOLD VACANT
SUBDIVIDED
PLOTS
HELD UNDER
PROPOSED
ACQUISITION
OF
93
VACANT
SUBDIVIDED
PLOTS
UNDER
PROPOSED
ACQUISITION
OF
93 FREEHOLD
FREEHOLD
VACANT
SUBDIVIDED
PLOTS HELD
HELD
UNDER
PT
71831
TO
PT
71923,
H.S.(D)
153315
TO
H.S.(D)
153407,
MUKIM
OF
KAJANG,
PT
71831
TO
PT
71923,
H.S.(D)
153315
TO
H.S.(D)
153407,
MUKIM
OF
KAJANG,
PT
71831
TO
PT
71923,
H.S.(D)
153315
TO
H.S.(D)
153407,
MUKIM
OF
KAJANG,
DISTRICT
OF ULU
LANGAT,
STATE OF
SELANGOR, FOR
AN AGGREGATE
CASH
DISTRICT
LANGAT,
OF
FOR
DISTRICT OF
OF ULU
ULU
LANGAT, STATE
STATE
OF SELANGOR,
SELANGOR,
FOR AN
AN AGGREGATE
AGGREGATE CASH
CASH
CONSIDERATION
OF
RM22,500,000
(“PROPOSED
ACQUISITION”)
CONSIDERATION
CONSIDERATION OF
OF RM22,500,000
RM22,500,000 (“PROPOSED
(“PROPOSED ACQUISITION”)
ACQUISITION”)
AND
AND
AND
NOTICE
OF EXTRAORDINARY
GENERAL MEETING
NOTICE
NOTICE OF
OF EXTRAORDINARY
EXTRAORDINARY GENERAL
GENERAL MEETING
MEETING
Adviser
Adviser
Adviser
M&A
SECURITIES
SDN
BHD (15017-H)
M&A
SECURITIES
SDN
(15017-H)
M&A
SECURITIES
SDN BHD
BHD
(15017-H)
(A Wholly-Owned
Subsidiary
of Insas
Berhad)
(A
of
Berhad)
(A Wholly-Owned
Wholly-Owned
Subsidiary
of Insas
InsasSecurities
Berhad) Berhad)
(A Participating
Organisation Subsidiary
of Bursa Malaysia
(A
Participating
Organisation
of
Bursa
Malaysia
Securities
(A Participating Organisation of Bursa Malaysia Securities Berhad)
Berhad)
The Notice convening the Extraordinary General Meeting (“EGM”) of Jiankun International Berhad (“JIB”) in
The
convening
Extraordinary
General
Meeting
(“EGM”)
of
Jiankun
International
Berhad
(“JIB”)
in
The Notice
Notice
the
Extraordinary
General
Meeting
(“EGM”)
of Kiara
Jiankun
International
Berhad
(“JIB”)
in
Proposed the
Acquisition
to be held
at Dewan
Perdana,
Bukit
Equestrian
& Country
Resort,
Jalan
respect
of theconvening
respect
of
Proposed Acquisition
to
held
Dewan
Bukit
Kiara Equestrian
&
Resort,
respect
of the
the
Acquisition60000
to be
be Kuala
held at
atLumpur,
Dewan Perdana,
Perdana,
Bukit
& Country
Country
Resort, Jalan
Jalan
Bukit
Kiara,
OffProposed
Jalan Damansara,
on
Tuesday,
14Kiara
July Equestrian
2015 at 10.00
a.m. together
with
Bukit
Kiara,
Off
Jalan
Damansara,
Bukit
Kiara,
Offare
Jalan
Damansara,
60000 Kuala
Kuala Lumpur,
Lumpur, on
on Tuesday,
Tuesday, 14
14 July
July 2015
2015 at
at 10.00
10.00 a.m.
a.m. together
together with
with
the
Proxy
Form
enclosed
in this 60000
Circular.
the
Proxy
Form
are
enclosed
in
this
Circular.
Proxy Formentitled
are enclosed
in this
Athe
shareholder
to attend
andCircular.
vote at the EGM is entitled to appoint a proxy to attend and vote on his
A
entitled
to attend
and
the EGM
to appoint aa proxy
to
and
vote
on
A shareholder
shareholder
entitled
attend
and vote
vote at
at
EGM is
is entitled
entitled
proxy
to attend
attend
andThe
vote
on his
his
behalf.
The Proxy
Formtomust
be deposited
Officetoofappoint
JIB at Suite
10.03,
Level 10,
Gardens
at the Registered
behalf.
The
Proxy
Form
must
be
deposited
at
the
Registered
Office
of
JIB
at
Suite
10.03,
Level
10,
The
Gardens
behalf.
The
Proxy
Form
must
be
deposited
at
the
Registered
Office
of
JIB
at
Suite
10.03,
Level
10,
The
Gardens
South Tower, Mid Valley City, Lingkaran Syed Putra, 59200 Kuala Lumpur, on or before the date and time
South
Mid Valley
Lingkaran Syed
Putra,
59200
Kuala
Lumpur,
on
before
date
time
South Tower,
Tower,
ValleyforCity,
City,
Syedlodging
Putra, of
59200
Kuala Form
Lumpur,
on or
or
before athe
the
date and
and from
time
indicated
belowMid
in order
it toLingkaran
be valid. The
the Proxy
will not
preclude
shareholder
indicated
below
in
order
for
it
to
be
valid.
The
lodging
of
the
Proxy
Form
will
not
preclude
a
shareholder
from
indicated and
below
in order
for itattothe
be EGM
valid.should
The lodging
of the Proxy
Form willwishes
not preclude
a shareholder from
attending
voting
in person
the shareholder
subsequently
to do so.
attending
attending and
and voting
voting in
in person
person at
at the
the EGM
EGM should
should the
the shareholder
shareholder subsequently
subsequently wishes
wishes to
to do
do so.
so.
Last date and time for lodging the Proxy Form
: Sunday, 12 July 2015 at 10.00 a.m.
Last
date
and
time
for
lodging
the
Proxy
Form
:
Sunday,
12
July
2015
at
10.00
a.m.
Last date and time for lodging the Proxy Form
: Sunday, 12 July 2015 at 10.00 a.m.
Date and time of EGM
: Tuesday, 14 July 2015 at 10.00 a.m.
Date
:: Tuesday,
Date and
and time
time of
of EGM
EGM
Tuesday, 14
14 July
July 2015
2015 at
at 10.00
10.00 a.m.
a.m.
This Circular is dated 29 June 2015
This
This Circular
Circular is
is dated
dated 29
29 June
June 2015
2015
DEFINITIONS
Except where the context otherwise requires, the following definitions shall apply throughout this
Circular:
“Act”
:
Companies Act, 1965, as amended from time to time and any reenactment thereof
“Board”
:
Board of Directors of JIB
“Bursa Securities”
:
Bursa Malaysia Securities Berhad
“BVSB” or “Vendor”
:
Bison Ventures Sdn Bhd
“Circular”
:
This circular to shareholders of JIB dated 29 June 2015 in relation to
the Proposed Acquisition
“Development Land”
:
84 plots of land (PT 71840 to PT 71923, H.S.(D) 153324 to H.S.(D)
153407), aggregating to 101,517 square feet, for the development of
84 units of three-storey terrace houses
“EGM”
:
Extraordinary general meeting
“FYE”
:
Financial year ended/ending
“JIB” or “Company”
:
Jiankun International Berhad
“JIB Group” or “Group”
:
JIB and its subsidiaries, collectively
“JIB Share(s)” or “Share(s)” :
Ordinary share(s) of RM0.25 each in JIB
“LAT”
:
Loss after taxation
“LPD”
:
23 June 2015, being the latest practicable date prior to the printing
of this Circular
“M&A Securities”
:
M&A Securities Sdn Bhd
“NBSB” or “Purchaser”
:
Nagamas Bizworks Sdn Bhd, a wholly-owned subsidiary of JIB
“Purchase Price”
:
The aggregate purchase price of the Land of RM22,500,000
“Proposed Acquisition”
:
The proposed acquisition of the Land, for the Purchase Price
“Land”
:
93 freehold vacant subdivided plots held under PT 71831 to PT
71923, H.S.(D) 153315 to H.S.(D) 153407, Mukim of Kajang, District
of Ulu Langat, State of Selangor
“SPA”
:
Conditional sale and purchase agreement dated 6 April 2015 entered
into between NBSB and BVSB for the Proposed Acquisition
“Surrender Land”
:
9 plots of land (PT 71831 to PT 71839, H.S.(D) 153315 to H.S.(D)
153323) aggregating to 12,131 square feet, to be surrendered to
serve as open green space for the overall development
“Valuer”
:
City Valuers and Consultants Sdn Bhd, the independent registered
valuer appointed by the Company
“Valuation Report”
:
Valuation report on the Development Land dated 30 April 2015
issued by the Valuer
For the purpose of this Circular, all references to a time of day shall be a reference to Malaysian time
unless otherwise stated.
In this Circular, words importing the singular shall, where applicable, include the plural and vice versa
and words importing the masculine gender shall, where applicable, include the feminine and vice
versa. References to persons shall, where applicable, include corporations.
Certain figures included in this Circular have been subject to rounding adjustments.
References to “we”, “us”, “our” and “ourselves” are to our Company save where the context
otherwise requires, our subsidiaries and to “you” or “your” are to the shareholders of JIB.
ii
TABLE OF CONTENTS
LETTER TO OUR SHAREHOLDERS IN RELATION TO THE PROPOSED ACQUISITION:
Page
1
1.
INTRODUCTION
2.
DETAILS OF THE PROPOSED ACQUISITION
1
3.
BACKGROUND INFORMATION OF THE VENDOR
7
4.
RATIONALE FOR THE PROPOSED ACQUISITION
7
5.
INDUSTRY OVERVIEW AND PROSPECTS
8
6.
RISK FACTORS
12
7.
FINANCIAL EFFECTS
14
8.
SHARE PRICE PERFORMANCE
15
9.
APPROVALS REQUIRED
16
10.
DIRECTORS’ AND MAJOR SHAREHOLDERS’ INTERESTS
16
11.
DIRECTORS’ RECOMMENDATION
16
12.
ESTIMATED TIME FRAME FOR COMPLETION
16
13.
OUTSTANDING PROPOSALS ANNOUNCED BUT PENDING COMPLETION
16
14.
EGM
16
15.
FURTHER INFORMATION
17
APPENDICES
I
VALUATION CERTIFICATE BY THE VALUER
18
II
FURTHER INFORMATION
25
NOTICE OF EGM
ENCLOSED
PROXY FORM
ENCLOSED
ii
ii
JIANKUN INTERNATIONAL BERHAD
(Company No. 111365-U)
(Incorporated in Malaysia under the Companies Act, 1965)
Registered Office:
Suite 10.03, Level 10
The Gardens South Tower
Mid Valley City
Lingkaran Syed Putra
59200 Kuala Lumpur
29 June 2015
Directors:
Dato’ Ir Lim Siang Chai (Executive Chairman)
Lee Leong Kui (Executive Director)
Foong Kah Heng (Executive Director)
Tan Sri Dato’ (Dr) Abdul Aziz bin Abdul Rahman (Independent Non-Executive Director)
Fathi Ridzuan bin Ahmad Fauzi (Independent Non-Executive Director)
Kamil bin Abdul Rahman (Independent Non-Executive Director)
Chan Fook Mun (Independent Non-Executive Director)
To: The Shareholders of Jiankun International Berhad
Dear Sir/Madam,
▪
PROPOSED ACQUISITION
1.
INTRODUCTION
On 6 April 2015, M&A Securities, on behalf of the Board, announced that NBSB had on even
date entered into the SPA with BVSB for the Proposed Acquisition.
The purpose of this Circular is to provide you with the relevant information on the Proposed
Acquisition and to seek your approval for the resolution pertaining to the Proposed Acquisition
to be tabled at the forthcoming EGM. The notice of EGM and the Proxy Form are enclosed in
this Circular.
YOU ARE ADVISED TO READ AND CONSIDER CAREFULLY THE CONTENTS OF THIS
CIRCULAR TOGETHER WITH THE APPENDICES BEFORE VOTING ON THE
RESOLUTION PERTAINING TO THE PROPOSED ACQUISITION TO BE TABLED AT THE
FORTHCOMING EGM.
2.
DETAILS OF THE PROPOSED ACQUISITION
2.1
Basis of the Purchase Price
The Land, previously identified as parent Lot 5682 was originally approved by the
planning authority on 7 January 2008 for the development of 93 units of three-storey
terrace houses. Following the approval, 93 individual qualified titles identified as PT
1
1
71831 to PT 71923 were issued. On 4 March 2015, a new layout plan amending the
abovementioned original approved plan was subsequently approved by the Majlis
Perbandaran Kajang planning authority for the development of 84 units of three-storey
terrace houses. As part of the overall development of the Land, the remaining 9 freehold
vacant subdivided plots will be surrendered to serve as open green space.
Notwithstanding that the 9 freehold vacant subdivided plots will be surrendered to serve
as open green space for the overall development, the Proposed Acquisition entails the
acquisition of the entire 93 freehold vacant subdivided plots.
Pursuant thereto, the purchase price of the Land of RM22,500,000 was arrived at on a
“willing buyer-willing seller” basis, after taking into consideration the market value of 84
freehold vacant subdivided three-storey terrace house plots forming part of the Land. In
arriving at the market value of the Land, the Valuer had adopted the Residual Method of
Valuation as stated in its valuation report on the Development Land dated 30 April 2015.
A copy of the valuation certificate is enclosed in Appendix I of this Circular.
2.2
Details of the Land
The Land, triangular in shape, is located in the Seri Kembangan locality, adjacent to
Taman Desa Serdang and opposite the Bukit Gita Bayu enclave. It is situated about 20
kilometres south of Kuala Lumpur city centre and about 15 kilometres north-east of
Putrajaya. The Land is approachable from Kuala Lumpur city centre and is accessible via
the Sungai Besi Expressway.
Within the neighbourhood of the Land are several residential and industrial
developments. Residential developments include Taman Putra Budiman, Taman
Balakong Jaya, Taman Puncak Utama, Serdang Lama and Taman Seri Timah and
exclusive residential developments in the vicinity include Country Heights Mines Resort
City, BluWater Estate and Jade Hills. These developments mainly consist of 1, 2 and 3storey terrace houses, semi-detached and detached houses and vacant detached house
plots as well as apartments and townhouses.
Industrial developments nearby include Taming Jaya Industrial Park, Taman Industri
Selesa Jaya, Kampung Baru Balakong Industrial Area and Kawasan Perindustrial
Balakong Jaya.
Other notable developments in the general vicinity include Sekolah Menengah
Kebangsaan Desa Serdang, Australian International School Malaysia, University Putra
Malaysia, Wisma Minlon, Malaysia International Exhibition and Convention Centre, Mines
Resort and Golf Club, The Mines Shopping Complex and South City Plaza.
(Source: Valuation Report)
Further details of the Land are summarised below:
Location
:
Tenure
Land area
:
:
Category of land use
Express condition
Restriction-in-Interest
Encumbrances
:
:
:
:
Development Land
Surrender Land
PT 71840 to PT 71923, H.S.(D) PT 71831 to PT 71839, H.S.(D)
153324 to H.S.(D) 153407, 153315 to H.S.(D) 153323,
Mukim of Kajang, District of Ulu Mukim of Kajang, District of Ulu
Langat, State of Selangor
Langat, State of Selangor
Freehold(1)
Combined land area of 101,517
Combined land area of 12,131
square feet(3)
square feet(1)
Building(1)
Residential(1)
Nil(1)
The titles have been charged to Bank of China (Malaysia) Berhad on
10 October 2013(1)
2
2
Net book value
Existing and proposed
use
Market value
:
:
:
Development Land
Surrender Land
Not available(2)
The Land is currently vacant and is proposed to be developed into
84 units of three-storey terrace houses
RM22,500,000(3)
Not applicable
Notes:
(1)
(2)
(3)
Based on title searches.
NBSB is not privy to such information of the Vendor.
Extracted from the Valuation Report
NBSB proposes to develop the Land into a residential development with an approximate
gross development value of RM72 million and gross development cost of approximately
RM57.4 million (including land cost), yielding a gross development profit of
approximately RM14.6 million. The construction is expected to commence in the fourth
quarter of 2015 after the completion of the Proposed Acquisition and after obtaining the
approval for the building plan (which is expected to be obtained in the fourth quarter of
2015). The development is expected to complete within 24 months from the
commencement of the construction. The Board has yet to finalise the exact sources of
funds to finance the development cost as the Proposed Acquisition has yet to be
completed and the development of the Land is still in the planning stage.
2.3
Salient terms of the SPA
The Vendor agrees to sell and NBSB agrees to purchase the Land, subject to the
Surrender Land, on an “as is where is” basis free from all caveats, liens, charges and
encumbrances but subject to all the conditions of title expressed or implied and
restrictions in title affecting the same upon the terms and conditions of the SPA.
(a)
Payment of Purchase Price
The Purchase Price shall be paid to the Vendor in the following manner:
(i)
prior to the execution of the SPA, the sum of RM0.45 million (“Earnest
Deposit”) had been paid on 2 March 2015 by NBSB to the Vendor’s
solicitors, as deposit and earnest money for the purchase of the Land;
(ii)
upon the execution of the SPA, NBSB paid a further sum of RM1.80 million
to the Vendor (“Balance Deposit”). The Balance Deposit together with the
Earnest Deposit shall collectively be referred to as “the Deposit” and in the
event of completion of the sale and purchase, shall be part payment of the
Purchase Price;
(iii)
the balance of the Purchase Price of RM20.25 million (“Balance Purchase
Price”) shall be paid to the Vendor’s solicitors as stakeholder within three
(3) months from the date the conditions precedent of the SPA have been
satisfied (“Completion Period”), failing which, the Vendor shall automatically
grant to NBSB an extension of time of one month from the expiration of the
Completion Period (“Extended Completion Period”), subject to NBSB paying
the Vendor, interest on the Balance Purchase Price or any part thereof still
outstanding at the rate of eight percent (8%) per annum calculated on a
daily basis from the first day of the Extended Completion Period to the day
the Balance Purchase Price is paid in full. If NBSB fails to settle the Balance
Purchase Price within the stipulated time, clause 2.3(c)(i) below shall apply.
3
3
(b)
Conditions precedent
(i)
The SPA shall be conditional upon the following conditions precedent:
(1)
NBSB shall obtain the approval from its shareholders to approve the
purchase of the Land in an EGM and provide proof to the Vendor of
the same; and
(2)
The Vendor shall provide NBSB’s solicitors, the Surat Sokongan for
earthworks and retaining work completed from the Engineering
Department of Majlis Perbandaran Kajang.
(ii)
NBSB irrevocably agrees, covenants and undertakes to the Vendor to do all
acts and submit all applications to obtain the EGM approval and furnish all
information, execute all instruments, deeds or documents and generally do
all things necessary within fourteen (14) days from the date of the SPA in
order to fulfil the conditions precedent.
(iii)
In the event the conditions precedent are not fulfilled within the three (3)
months from the date of the SPA or such extended date as maybe mutually
agreed by the parties, and provided always that NBSB has provided proof to
the Vendor that it has complied with clause 2.3(b)(ii) above, the parties
shall be entitled to terminate the SPA. In such an event, the Deposit shall
be refunded to NBSB upon demand without any interest or compensation
whatsoever within fourteen (14) days from the date of termination.
Any failure by the Vendor to refund all other monies in excess of the
Deposit within fourteen (14) days of termination, the Vendor shall pay NBSB
interest at the rate of eight percent (8%) per annum on the outstanding
sum from the expiry of the fourteen (14) days’ period until the date of
actual refund of all monies to NBSB (“Late Refund Interest”). Upon refund
of all monies together with the Late Refund Interest, (if any), the SPA shall
be terminated and rendered null and void and neither party shall have any
claims against the other provided that this is without prejudice to any right
which either party may be entitled to against the other party in respect of
any antecedent breach of the SPA.
(iv)
(c)
In the event NBSB has not complied with clause 2.3(b)(ii) above, the
Vendor shall be entitled to forfeit the Deposit and clause 2.3(c)(i) below
shall apply.
NBSB’s and Vendor’s default
(i)
In the event of NBSB being in default of paying the whole or any part of the
Balance Purchase Price to the Vendor’s solicitors in the manner and within
the time stipulated in the SPA, then it is agreed between the Vendor and
NBSB that the Vendor shall be entitled to terminate the SPA by way of
notice in writing to NBSB’s solicitors (“Notice of Termination”) and the
Deposit (i.e. RM2.25 million) paid by NBSB shall be forfeited absolutely to
the Vendor by way of agreed liquidated damages and thereafter, the
Vendor shall refund all other monies, without interest, paid by NBSB to the
Vendor within fourteen (14) days of termination.
Any failure by the Vendor to refund all other monies in excess of the
Deposit within fourteen (14) days of termination, the Vendor shall pay NBSB
Late Refund Interest. Upon refund of all monies together with the Late
Refund Interest, (if any), the SPA shall be terminated and rendered null and
4
4
void and neither party shall have any claims against the other provided that
this is without prejudice to any right which either party may be entitled to
against the other party in respect of any antecedent breach of the SPA.
(ii)
In the event the Vendor shall fail or neglect to complete the sale in
accordance with the SPA through no fault of NBSB, NBSB shall be entitled at
its sole discretion either to seek for specific performance and all relief
flowing therefrom or to terminate the SPA and require the Vendor to refund
to NBSB whatever sums so far received by the Vendor pursuant to the SPA
together with a further sum equivalent to the Deposit (i.e. RM2.25 million)
as agreed liquidated damages for the breach of the terms and conditions of
the SPA within fourteen (14) days from the receipt of Notice of Termination.
Any failure by the Vendor to refund all other monies in excess of the
Deposit within fourteen (14) days of termination, the Vendor shall pay NBSB
Late Refund Interest. Upon refund of all monies together with the Late
Refund Interest, (if any), the SPA shall be terminated and rendered null and
void and neither party shall have any claims against the other provided that
this is without prejudice to any right which either party may be entitled to
against the other party in respect of any antecedent breach of the SPA.
(d)
The Vendor’s covenants, warranties and representations
(i)
(ii)
The Vendor undertakes, warrants and represents to NBSB as follows:
(1)
that the Vendor is the legal and beneficial owner of the Land and has
full power and authority to sell the Land;
(2)
that the Vendor has not prior to the date of the SPA, agree to sell the
Land to any person and in the event of such agreement, the Vendor
has lawfully terminated and/or revoked the same;
(3)
there is no subsisting sale and purchase agreement or any other
agreement(s) of whatsoever nature affecting or in respect of the
Land or any part thereof between the Vendor and any third party or
parties;
(4)
that there is no pending legal proceedings and/or claims against the
Vendor which may affect in any way the Vendor’s title to or the
Vendor’s rights to dispose the Land;
(5)
that the Land is immediately before the execution of the SPA, free
from all encumbrances save and except such encumbrances which
are as described in the SPA and that the Vendor shall not charge,
transfer, encumber or howsoever deal with the Land in any way after
the date of the SPA; and
(6)
that as at the date of the SPA, the Vendor is not wound up and there
are no winding up proceedings against the Vendor.
The Vendor acknowledges that NBSB has agreed to enter into the SPA on
the basis of and in full reliance upon the representations, warranties and
declarations in clause 2.3(d)(i) above, which are true and correct in all
respects. In the event that there is a breach of covenants or warranties as
contained in clause 2.3(d)(i) above, the Vendor shall rectify the said breach
within thirty (30) days of receipt of NBSB’s notice requiring such
rectification, failing which, clause 2.3(c)(ii) above shall apply.
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5
(e)
NBSB’s covenants, warranties and representations
(i)
(ii)
(f)
NBSB undertakes, warrants and represents to the Vendor as follows:
(1)
that there is no pending legal proceedings and/or claims against
NBSB which may affect in any way NBSB’s rights to acquire the Land;
and
(2)
that as at the date of the SPA, NBSB is not wound up and there are
no winding up proceedings against NBSB.
NBSB acknowledges that the Vendor has agreed to enter into the SPA on the
basis of and in full reliance upon the representations, warranties and
declarations in clause 2.3(e)(i) above, which are true and correct in all
respects. In the event that there is a breach of covenants or warranties
contained in clause 2.3(e)(i) above, NBSB shall rectify the said breach within
thirty (30) days of receipt of the Vendor’s notice requiring such rectification,
failing which, clause 2.3(c)(i) above shall apply.
Delivery of vacant possession
Vacant possession of the Land shall be deemed to have been delivered by the
Vendor to NBSB and NBSB shall be deemed to have taken possession of the Land
on the date of the Vendor’s solicitors’ receipt of the Balance Purchase Price
together with interest thereon, if any and outgoings apportionment by NBSB’s
solicitors.
(g)
Apportionment of outgoings
All quit rent, rates, assessments, taxes and all other outgoings due and payable in
respect of the Land shall be apportioned as at the delivery of vacant possession of
the Land.
(h)
Government acquisition
(i)
The Vendor warrants and undertakes to NBSB that as at the date of
execution of the SPA, the Vendor has no knowledge nor have any reason to
believe that the Land or any part thereof has been acquired or is subject to
acquisition by any governmental, statutory, urban or municipal authority or
that any advertisement in the Government gazette of such intention has
been published pursuant to either Sections 4 or 8 of the Land Acquisition
Act, 1960.
(ii)
In the event the Vendor shall be served with any notice of acquisition by
any governmental, statutory, urban or municipal authority:
(1)
prior to the presentation of the Memorandum of Transfer to the Land
Office/Registry for registration, NBSB shall be entitled at its discretion
to either continue or terminate the sale and purchase; and
*
(2)
There is no adjustment to the Purchase Price should NBSB decides to continue
with the sale and purchase.
after the presentation of the Memorandum of Transfer of the Land at
the Land Office/Registry for registration, such acquisition or intended
acquisition shall not nullify or invalidate the sale and purchase nor
shall it be a ground for any adjustment of the Purchase Price. NBSB
shall be entitled to receive all compensation monies and to appear
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6
and to attend at such enquiry or hearings either in the name of the
Vendor or in the name of NBSB and all compensation monies
received by the Vendor shall be held in trust for NBSB.
2.4
Source of funding
The Purchase Price is expected to be funded via a combination of bank borrowings and
from the proceeds of the rights issue exercise completed by the Company on 31
December 2014. The exact breakdown of the sources of funding of the Purchase Price
has not been finalised at this juncture.
2.5
Assumption of liabilities
Save for any potential bank borrowings that may arise from funding the Purchase Price,
there are no other liabilities, including contingent liabilities and guarantees to be
assumed by NBSB or the JIB Group pursuant to the Proposed Acquisition, other than the
usual liabilities as the legal and beneficial owner of the Land.
2.6
Additional financial commitment
Save for the costs relating to NBSB’s proposed development plan for the Land, of
approximately RM60 million, no other material additional financial commitment is
expected to be incurred by the Group in relation to the Proposed Acquisition. The Board
has yet to finalise the exact sources of funds to finance the development cost at this
juncture as the Proposed Acquisition has yet to be completed and the development of
the Land is still in the planning stage.
3.
BACKGROUND INFORMATION OF THE VENDOR
BVSB was incorporated on 28 December 2010 under the Act as a private limited company. The
Vendor is principally involved in property development and property investment. As at the LPD,
BVSB has an authorised share capital of RM10 million comprising 10 million ordinary shares of
RM1.00 each and an issued and paid-up share capital of RM6 million comprising 6 million
ordinary shares of RM1.00 each.
As at the LPD, the Directors of BVSB are Wong Wai Sun, Wong Kim and Chan Lai Yong whilst
the shareholders of BVSB are Wong Wai Sun (47.0%), Wong Kim (23.5%), Lee Iou Chi (8.2%),
Lee Chen Teng (8.2%), Chung Kai Wing, Danny (7.1%), and Chan Lai Yong (5.9%).
4.
RATIONALE FOR THE PROPOSED ACQUISITION
The Proposed Acquisition is in line with the Group’s corporate strategy to develop strategicallylocated land in high-density areas, with easy accessibility and significant gross development
value.
The Land, located in the Seri Kembangan locality, is situated about 20 kilometres south of
Kuala Lumpur city centre and about 15 kilometres north-east of Putrajaya. The Land is
surrounded by developed neighbourhoods and exclusive residential developments such as
Country Heights Mines Resort City, BluWater Estate and Jade Hills. Other notable developments
in the general vicinity include Sekolah Menengah Kebangsaan Desa Serdang, Australian
International School Malaysia, University Putra Malaysia, Wisma Minlon, Malaysia International
Exhibition and Convention Centre, Mines Resort and Golf Club, The Mines Shopping Complex
and South City Plaza. As such, the proposed development of the Land will be developed to
cater towards the demand for middle to higher-end landed properties within the vicinity.
(Source: Valuation Report)
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7
By developing landed properties on the Land, the Group would also be able to implement the
development on a staggered basis, and control the pace of construction in response to the
take-up rate for a more effective cashflow management. The future development of the Land is
expected to enhance the future earnings potential of the JIB Group.
5.
INDUSTRY OVERVIEW AND PROSPECTS
5.1
Overview and prospects of the Malaysian economy
The Malaysian economy recorded a stronger growth of 6.0% in 2014 (2013: 4.7%)
driven by continued strength of domestic demand, external trade, net exports and
continued demand from the region. Private consumption grew by 7.1% supported by
favourable income growth, stable labour market conditions, targeted Government
transfers to low-and-middle-income households. Public consumption recorded a slower
growth rate of 4.4% due to increase in Government expenditure on supplies and
services. Private investment grew by 11.0% due to services and manufacturing sectors.
Public investment contracted by 4.9% due to decline in the Federal Government
development expenditure and lower capital spending by public enterprises.
On the supply side, all economic sectors recorded higher growth rates driven by
domestic and external factors. Recovery in advanced economies and continued demand
from regional economies resulted in manufacturing sector recording a growth of 6.2%
while the services sector expanded by 6.3% (2013: 5.9%). Headline inflation averaged
at 3.2% (2013: 2.1%) due to lower food inflation and fuel price adjustments. Spillovers
on prices of other goods and services were contained by subdued global prices, stable
domestic demand conditions and firms’ ability to accommodate the increase in input
costs. As such, core inflation averaged at 2.4% (2013:1.8%). Overall imports growth
moderated following lower growth in imports of consumption goods and the decline in
imports of capital goods and as such, the current account registered a surplus of RM49.5
billion or 4.8% (2013: RM39.9 billion or 4.2%) of gross national income (“GNI”).
The Overnight Policy Rate was raised 25 basis points to 3.25% in July 2014 and in
September 2014, the Monetary Policy Committee had capped it at 3.25%. The Malaysian
economy is expected to register steady growth of 4.5% - 5.5% in 2015, due to sustained
expansion in domestic demand. Domestic demand and private consumption is expected
to continue to grow in 2015, driven by private sector spending. The implementation of
the Goods and Services Tax (“GST”) in April is expected to affect spending, but this will
be offset by lower fuel prices, favourable labour market conditions and the Government’s
policies to assist the low and middle income group. Private investment is expected to
expand by 9.0% supported by on-going projects and new investments in the
manufacturing and services sectors. Public consumption is expected to expand
moderately, with lower spending on supplies and services and expected to record
positive growth, with higher capital spending by public enterprises. In the external
sector, growth of gross exports is projected to moderate, exports of manufactured
products are expected to increase and gross imports growth is expected to be higher.
Overall, the current account surplus is projected to narrow to 2% - 3% of GNI in 2015.
On the supply side, the services and manufacturing sectors will remain the key drivers of
overall growth. Growth in the mining sector is projected to be sustained while the
agriculture sector is expected to record a marginal growth due to lower commodity
prices. The construction sector is expected to continue to record high growth and
although activity in the residential sub-sector is expected to increase, growth in the nonresidential sub-sector is projected to be sustained while new and existing multi-year civil
engineering projects will continue to provide additional support to the sector. Headline
inflation is projected to be lower at 2% - 3% in 2015, due to lower global energy and
food prices. While the implementation of the GST would result in higher prices for some
8
8
goods and services, the impact on overall headline is expected to be contained. The
inflation rate in 2015 would also be affected by the new pricing mechanism for petrol
prices in which there would be a more direct transmission of global oil price volatility into
domestic prices given the market-based pricing of domestic fuel products. Nevertheless,
the expectation is for underlying inflation to still remain relatively stable, amid modest
demand pressures.
(Source: Bank Negara Malaysia Annual Report 2014)
5.2
Overview of the property market in Malaysia
The Malaysian economic growth was at 6.0% in 2014, higher than 4.7%, supported the
slight increase in the property sector of 0.8% in market volume and 7.0% in market
value. The 11.6% (2013: 10.9%) expansion in the construction sector was in tandem
with the uptrend in the construction activities across the sub-sectors. Loans approved for
the sector charted a marginal 0.3% growth (2013: -10.5%) whilst the loans disbursed
continued to grow by 12.7% (2013: 14.8%).
The Consumer Sentiments Index (“CSI”) stood at 83.0 points in 2014’s final quarter
(2013: 104.3 points), as cautionary sentiments continued to linger on household
finances. The Malaysian Institute on Economic Research’s (“MIER”) Business Condition
Index (BCI) thwarted to 86.4 points due to the depreciation of the Ringgit and the falling
oil prices. These low note MIER’s indicators have in part influenced the level of
confidence in the commercial property sub-sector as volume grew by a marginal 3.6%
whereas value dropped by 10.5%.
The manufacturing sector expanded by 6.2% (2013: 3.5%) due to stronger performance
in the export-oriented industries, particularly the electronics and electrical (“E&E”)
cluster. The industrial property sub-sector paves its way with a lower contraction of
3.8% in market activity whilst value shot up by 17.7%. The agricultural sector recorded
a marginal growth of 2.6% (2013: 2.1%) supported by the higher oil palm production
and the agricultural property experienced a turnaround of 2.0% in volume though value
moderated by 4.2%.
In the leisure sub-sector, market performance remained encouraging with national
average occupancy rate of one to five star hotels registered 53.5% (2013: 50.8%) due
to the increase in the number of tourist arrivals.
The performance of the overall property market recorded a total of 384,060 transactions
worth RM162.97 billion, marking an increase of 0.8% in volume and 7.0% in value. The
highest contribution was by the residential sub-sector (64.4%), agricultural (18.8%),
commercial (9.3%), development land (5.5%) and industrial (2.1%) in terms of volume.
In terms of value, residential was 50.4% share, commercial (19.5%), development land
(13.3%), industrial (8.9%) and agricultural (7.8%).
Residential, commercial and agricultural sub-sectors recorded growths in volume of
0.4%, 3.6% and 2.0% respectively while industrial and development land sub-sectors
each recorded a slight downturn of 3.8% and 1.9% respectively against 2013. Value of
transactions moved independently with residential, industrial and development land subsectors recorded double-digit growth of 13.9%, 17.7% and 13.5% respectively whereas
commercial and agricultural sub-sectors recorded downfall of 10.5% and 4.3%
respectively.
Residential Property
In 2014, transactions worth RM82.06 billion were recorded in the review period, up by
0.4% in volume and 13.9% in value. Residential property accounted for 64.4% and
50.4% of the volume and value respectively.
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9
In the primary market, the number of new launches amounted to 68,351 units (2013:
62,376 units), attributable to the rise in condominiums and service apartments (44.9%)
led by Selangor, Kuala Lumpur and Johor. Sales performance moderated at 44.7%
mainly from Kuala Lumpur, Negeri Sembilan, Kelantan and Sabah. Terrace houses make
the majority of new launches at 37.7%. Residential overhang numbers receded to
11,816 units or RM4.04 billion, down by 12.8% in volume and 15.9% in value. Johor
accounted for 30.2% of national overhang units.
Terraced houses accounted for 42.1% (4,974 units) of the total unsold, majority from
Johor (2,183 units; 43.9%), where these houses have remained unsold for more than 24
months. Condominiums/apartments (1,530 units) and service apartments (919 units)
formed a combined share of 20.7% of the country’s total overhang with Kuala Lumpur
holding the bulk of condominiums/apartments overhang (746 units).
Commercial property
Malaysia registered a moderate 35,528 transactions in 2014, up by 3.6% compared to
the same period last year. Value of transactions dropped by 10.5% to record RM31.84
billion.
Perak saw a decline of 16.7% in volume. Selangor, Johor and Pulau Pinang recorded a
downfall in value - by 1.0%, -42.8% -3.5% respectively while Kuala Lumpur and Perak
recorded a better performance, each up by 14.3% and 5.3% respectively.
Leisure property
There were eighteen (18) hotels and ten (10) resorts transactions recorded in 2014
worth RM991.14 million. The leisure sub-sector showed a moderate performance as the
three (3) to five (5) star hotels recorded an overall occupancy of 54.8% (2013: 50.4%).
The one (1) to five (5) star hotels recorded an increase in the overall occupancy from
53.5% in 2014 (2013: 50.8%). Putrajaya, Selangor, Kuala Lumpur, Pulau Pinang,
Pahang and Sabah recorded an overall occupancy of more than 60.0%. A total of 42
new hotels emerged in the market, offering 5,430 rooms (2013: 5,197 rooms). At the
end of 2014, there were 2,805 hotels across the country offering 202,829 rooms.
(Source: Press Release of the Malaysian Property Market 2014 from the Valuation & Property Services
Department dated 24 April 2015 - Ministry of Finance, Malaysia)
5.3
Overview of the landed residential property market in Selangor
The following chart provides a summary of the number and value of transactions of
terrace, semi-detached and detached houses in Selangor for the years 2009 to 2014.
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10
It can be seen from the data above that the value of transactions for landed residential
units in Selangor has been increasing steadily from RM11.944 billion in 2009 to
RM18.124 billion in 2014. The increasing trend in value is despite a decline in the
number of transactions of landed properties from 2011 to 2014. The decline in the
number of transactions of landed properties in 2011 to 2014 was mainly due to
developers concentrating more on high-rise apartments/condominiums due to the high
prices of lands and greater profitability per acre due to the higher density. The average
value of landed residential properties in Selangor rose from RM564,657 in 2013 to
RM606,069 in 2014, an increase of 7.33% indicating the current demand for landed
residential properties.
In terms of supply, the existing stock of landed residential units in Selangor has increase
each year from 2009 to 2014 by 12,702, 14,688, 13,898, 16,250 and 15,455 units
respectively. The annual increase represents a steady 2.05 to 2.5% growth of the
existing stock each year. A breakdown by building type shows that there were 43,490
detached, 34,998 semi-detached and 529,378 terrace houses in 2009 and by the end of
2014, these numbers rose to 47,661 detached, 46,188 semi-detached and 587,010
terrace house units, indicating the popularity of landed residential units and in particular
terrace houses. The steady and consistent growth in the housing supply is largely due to
the positive population and demographic trends that spur the demand for residential
units.
(Source: Valuation Report)
The performance of the overall Selangor property market recorded a total of 79,565
transactions worth RM47.46 billion, marking a decrease of 2.9% in volume and an
increase of 2.0% in value. The highest contribution was by the residential sub-sector
(76.5%), commercial (10.6%), agricultural (6.3%), development land (3.4%) and
industrial (3.2%). In terms of value, residential was 56.8% share, commercial (16.9%),
industrial (16.1%), development land (6.1%), and agricultural (3.9%).
Commercial and development land sub-sectors recorded growths in volume of 18.7%
and 4.0% respectively while residential, industrial and agricultural sub-sectors each
recorded a downturn of 5.2%, 5.1% and 6.3% respectively against 2013. Value of
transactions moved independently with residential and industrial sub-sectors recorded
growth of 3.3% and 28.3% respectively whereas commercial, agricultural and
development land sub-sectors recorded downfall of 1.0%, 12.3% and 2.0% respectively.
(Source: Press Release of the Malaysian Property Market 2014 from the Valuation & Property Services
Department dated 24 April 2015 - Ministry of Finance, Malaysia)
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5.4
Prospects of the Land
The Board is of the opinion that it is now presented with an opportunity to acquire the
strategically located land. The Land is located in the Seri Kembangan locality, about 20
kilometres south of Kuala Lumpur city centre and about 15 kilometres north-east of
Putrajaya, nestled between Cheras, Puchong, Serdang and Kajang, which are wellestablished areas within the Klang Valley.
The Board envisages that the Land has favourable development potential. The Land is
situated in a matured residential area and where demand for residential landed
development is expected to be positive, given its location, and fast growing residential
areas, with nearby amenities including industrial areas, universities, schools, golf clubs,
convention centre and commercial complexes such as Taming Jaya Industrial Park,
Kampung Baru Balakong Industrial Area, Sekolah Menengah Kebangsaan Desa Serdang,
Australian International School Malaysia, University Putra Malaysia, Malaysia
International Exhibition and Convention Centre, The Mines Shopping Complex and South
City Plaza. The Land has also well-developed infrastructure and is easily accessible via
the Sungai Besi Expressway. The Board is not aware of any risk factors arising from the
Proposed Acquisition other than the normal market and global economic risks detailed in
Section 6 of this Circular.
In view of the above, the management of JIB is of the view that the development of the
Land will augur well for the Group and will reflect positively in the Group’s property
development business.
(Source: Management of JIB)
6.
RISK FACTORS
The risks associated with the Proposed Acquisition are set out below. By virtue that one of the
Group’s businesses is property development, these risks are similar to those that it is
accustomed to. Hence, the Board believes that the experience and expertise of its management
team will enable the Group to mitigate these risks effectively.
6.1
Financing risk
The JIB Group may be seeking external financing to partially fund the Proposed
Acquisition. The Group’s ability to arrange for external financing and the cost of such
financing are dependent on numerous factors, including general economic and capital
market conditions, interest rates, credit availability from banks or other lenders, or any
restrictions imposed by the Government of Malaysia and political, social and economic
conditions in Malaysia. The Group may also be exposed to fluctuations in interest rate
movements. Any significant increase in interest rates may also adversely affect the
financial performance of the Group.
The Group will seek to mitigate the financing risk by undertaking prudent capital
budgeting wherein all major financing decision would be made with the consultation and
approval from the Board. However, there can be no assurance that the necessary
financing will be available in amounts or on terms acceptable to the Group.
6.2
Compulsory acquisition
Pursuant to the Land Acquisition Act, 1960, the relevant State Authority has the power to
compulsorily acquire any land within the jurisdiction of such relevant State Authority in
Malaysia in accordance with the aforesaid act. In the event of any compulsory acquisition
of the Land or any part thereof, the amount of compensation to be awarded will be
determined on the basis prescribed in the First Schedule of the Land Acquisition Act,
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12
1960. If all or any portion of the Land is compulsorily acquired by the relevant State
Authority at any point in time, the amount of such compensation may be less than the
Purchase Price to be paid by the JIB Group.
In the event of any compulsory acquisition of the Land or any part thereof, the Group
may seek to minimise any potential losses from such transactions by invoking the
relevant provisions in the Land Acquisition Act, 1960 in relation to its rights to submit an
objection in respect of the amount of compensation, where necessary.
6.3
Non-completion of the Proposed Acquisition
The Proposed Acquisition is subject to the terms and conditions of the SPA. In the event
the conditions precedent stated in the SPA, which include, amongst others, the approval
for the Proposed Acquisition from JIB’s shareholders, are not fulfilled, the SPA may be
terminated.
There is no assurance that the Proposed Acquisition will not be exposed to risks such as
inability by either party to the SPA to fulfil the terms and conditions of the SPA and/or
obtain the relevant approvals from the relevant authorities. However, NBSB will take all
reasonable steps that are within its control, such as endeavouring to obtain shareholders’
approval, to ensure that the conditions precedent are fulfilled by the stipulated date and
in accordance with the provisions of the SPA.
6.4
Business risk
The business activities of the Group are subject to the risks inherent in the property
development industry. These risks include, but are not limited to, changes in the
economic condition and demand for properties in Malaysia. Factors that may affect
demand for property includes labour supply, volatility in construction material prices and
changes in regulatory framework of the construction and/or property development
industries, which are beyond control of the Group. The Group faces competition from
other property developers. Generally, brand name and reputation, established customer
bases, competent personnel and competitive pricing are major factors in maintaining the
Group’s market position and securing new sales.
The demand for properties is dependent on the general economic, business and credit
conditions, as well as the availability of supply in the market. Whilst the Board believes
that it is possible to address any fluctuations in the demand for properties by meticulous
planning in terms of innovative design, timing of launch, and pricing points relative to
competitors, there can be no assurance that the development of the Land will be
shielded from any further adverse downturn in the economy. The JIB Group will leverage
on its strength and experience as a property developer to manage these risks closely.
6.5
Competition risks
The JIB Group’s competitiveness is dependent on the ability of its management to price
its products competitively, to provide quality and timely delivery of developments and to
manage the sales of its properties.
Nevertheless, the JIB Group will continue to undertake measures to remain competitive
in the property development industry by providing quality products and competitive
pricing and ensuring the timely completion and delivery of properties sold. However
there can be no assurance that the Group’s efforts will be sufficient to mitigate the
competition risks from other companies operating in the property development sector.
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13
6.6
Delays in commencement and completion
There are many external factors which are beyond the control of the Group that could
affect the timely completion of property development projects such as getting the
necessary approvals from relevant authorities, the availability of construction materials in
reasonable amounts and satisfactory performance of the appointed building contractors.
However, the Group will seek to mitigate such risks by closely monitoring the progress of
the development project and endeavour to promptly rectify any setbacks in order to
ensure the timely completion of the development of the Land.
7.
FINANCIAL EFFECTS
7.1
Share capital and substantial shareholders’ shareholdings
The Proposed Acquisition will not have any effect on the issued and paid-up share capital
and substantial shareholders’ shareholdings of the Company as the Proposed Acquisition
does not involve any issuance of shares.
7.2
Earnings
The Proposed Acquisition is not expected to have any material effect on the consolidated
earnings of the JIB Group for the FYE 31 December 2015 as the development of the
Land is expected to commence in the fourth quarter of 2015. However, the Proposed
Acquisition is expected to contribute positively to the earnings and earnings per Share of
the Group for the FYEs 31 December 2016 and 2017 in view of the potential future profit
contribution arising from the development of the Land.
The proforma effects on the net earnings per Share of the JIB Group based on the
audited financial statements for the FYE 31 December 2014, assuming the development
of the Land yields a gross development profit (“GDP”) of approximately RM14.6 million,
will improve from a gross loss per Share of 3.70 sen to a gross earnings per Share of
8.33 sen.
Loss/earnings before tax from continuing
operations
Loss before tax from discontinued operations
Loss/earnings before tax attributable to the
Company
Gross loss/earnings per Share attributable to
the Company (sen)
Audited FYE
31.12.2014
RM
(937,549)
Assuming
development of the
Land yields
expected GDP
RM
13,662,451
(1,029,913)
(1,967,462)
(1,029,913)
12,632,538
(3.70)*
8.33^
Notes:
*
^
Based on a weighted average number of Shares in issue of 53,103,932 JIB Shares.
Based on 151,677,519 JIB Shares after taking into account the Rights Issue with Warrants was
completed on 31 December 2014.
The actual impact of the Proposed Acquisition on the future earnings and consolidated
earnings per share will depend on, amongst others the actual returns derived from the
development of the Land.
14
14
7.3
Net assets and gearing
Based on the audited consolidated financial statements of JIB as at 31 December 2014,
assuming the Purchase Price is financed 60% by bank borrowings, the Proposed
Acquisition will increase the gearing of JIB to 0.30 times, as follows:
Share capital
Capital reserves
Warrants reserve
Foreign currency translation
Accumulated losses
Shareholders’ funds
Number of ordinary shares in issue
NA per ordinary share (RM)
Borrowings
Gearing (times)
As at 31.12.2014
RM
37,919,380
2,792,663
13,605,640
1,215,731
(10,728,244)
44,805,170
After the Proposed
Acquisition
RM
37,919,380
2,792,663
13,605,640
1,215,731
(10,928,244)^
44,605,170
151,677,519
0.30
-
151,677,519
0.29
13,500,000#
0.30
Note:
^
#
7.4
After deducting estimated expenses of RM200,000 for the Proposed Acquisition.
Assuming RM13,500,000 increase in bank borrowings for the financing of 60% of the
Purchase Price.
Convertible securities
As at the LPD, JIB has 75,586,889 warrants in issue. The Proposed Acquisition will not
have any effect on the warrants.
8.
SHARE PRICE PERFORMANCE
The monthly highest and lowest prices of JIB Shares as traded on Bursa Securities for the
period of twelve (12) months up to the LPD are set out below:
2014
June
July
August
September
October
November
December
High
RM
Low
RM
0.241
0.226
0.235
0.280
0.459
0.438
0.340
0.209
0.200
0.209
0.217
0.247
0.270
0.225
2015
January
February
March
April
May
0.305
0.335
0.375
0.350
0.310
0.210
0.260
0.305
0.290
0.270
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15
The last transacted price of JIB Shares on 3 April 2015, being the market day prior to the
announcement of the Proposed Acquisition was RM0.335.
The last transacted price of JIB Shares as at the LPD, was RM0.275.
(Source: M&A Securities)
9.
APPROVALS REQUIRED
The Proposed Acquisition is conditional upon approvals being obtained from the following:
(a)
(b)
shareholders of JIB at the forthcoming EGM; and
any other authorities/parties.
The Proposed Acquisition is not conditional upon any other corporate exercise undertaken by
JIB.
10.
DIRECTORS’ AND MAJOR SHAREHOLDERS’ INTERESTS
None of the Directors and/or major shareholders of JIB and/or persons connected to them
have any interest, whether direct or indirect, in the Proposed Acquisition.
11.
DIRECTORS’ RECOMMENDATION
The Board has considered all aspects of the Proposed Acquisition, including inter-alia, the terms
and conditions of the SPA, the market value of the Land as appraised by the Valuer and the
outlook and prospects of the Land. After careful deliberation, the Board is of the opinion that
the Proposed Acquisition is in the best interest of JIB. Accordingly, the Board recommends that
you vote in favour of the resolution pertaining to the Proposed Acquisition to be tabled at the
forthcoming EGM.
12.
ESTIMATED TIME FRAME FOR COMPLETION
The EGM for the Proposed Acquisition is on 14 July 2015.
Barring any unforeseen circumstances and subject to receipt of all relevant approvals, the
Proposed Acquisition is expected to be completed during the second half of 2015.
13.
OUTSTANDING PROPOSALS ANNOUNCED BUT PENDING COMPLETION
Save for the Proposed Acquisition which is the subject matter of this Circular, there is no other
corporate exercises announced but pending completion.
14.
EGM
An EGM, the Notice of which is enclosed with this Circular, will be held at Dewan Perdana,
Bukit Kiara Equestrian & Country Resort, Jalan Bukit Kiara, Off Jalan Damansara, 60000 Kuala
Lumpur, on Tuesday, 14 July 2015 at 10.00 a.m. for the purpose of considering the Proposed
Acquisition contained herein and if thought fit, passing the resolution so as to give effect to the
Proposed Acquisition.
16
16
If you are unable to attend and vote in person at the EGM, you may complete and return the
enclosed Proxy Form in accordance with the instructions printed thereon as soon as possible
and in any event so as to arrive at the registered office of JIB at Suite 10.03, Level 10, The
Gardens South Tower, Mid Valley City, Lingkaran Syed Putra, 59200 Kuala Lumpur, not less
than forty-eight (48) hours before the date and time stipulated for the EGM or any
adjournment thereof. The lodging of the Proxy Form does not preclude you from attending
the EGM and voting in person should you subsequently decide to do so.
15.
FURTHER INFORMATION
Please refer to the attached appendices for further information.
Yours faithfully,
for and on behalf of the Board of,
JIANKUN INTERNATIONAL BERHAD
Dato’ Ir Lim Siang Chai
Executive Chairman
17
17
APPENDIX I
VALUATION CERTIFICATE BY THE VALUER
18
18
19
20
21
22
23
24
APPENDIX II
FURTHER INFORMATION
1.
DIRECTORS' RESPONSIBILITY STATEMENT
This Circular has been seen and approved by the Directors and they individually and collectively
accept full responsibility for the accuracy of the information given in this Circular and confirm
that, after making all enquiries, as were reasonable in the circumstances, and to the best of
their knowledge and belief, there are no other facts, the omission of which would make any
statement herein misleading.
Information relating to BVSB was provided by the management of BVSB and based on
company searches, where applicable. The responsibility of the Directors of JIB is therefore
restricted in ensuring that such information is accurately reproduced in this Circular.
2.
CONSENTS AND DECLARATIONS
M&A Securities, the Adviser for the Proposed Acquisition, has given and has not subsequently
withdrawn its written consent for the inclusion of its name and all references thereto, in the
form and context in which they appear in this Circular. M&A Securities is not aware of any
conflict of interest that exists or is likely to exist in relation to its role as Adviser for the
Proposed Acquisition.
City Valuers and Consultants Sdn Bhd, the Valuer for the Development Land, has given and has
not subsequently withdrawn its written consent for the inclusion of its valuation certificate and
name and all references thereto, in the form and context in which they appear in this Circular.
City Valuers and Consultants Sdn Bhd is not aware of any conflict of interest that exists or is
likely to exist in relation to its role as Valuer for the Development Land.
3.
MATERIAL LITIGATION
As at the LPD, to the best knowledge of the Board, there is no material litigation, claims or
arbitration involving the Land.
4.
MATERIAL COMMITMENT
Save for the acquisition for the Land, as at the LPD, the Board is not aware of any material
commitment, incurred or known to be incurred, which may have a material impact on the
results or financial position of the JIB Group.
5.
CONTINGENT LIABILITIES
As at the LPD, the Board is not aware of any contingent liabilities, incurred or known to be
incurred, which upon becoming enforceable, may have a substantial impact in the ability of the
JIB Group to meet its obligations as and when they fall due.
6.
MATERIAL CONTRACTS
Save for the SPA and the contracts disclosed below, JIB and its subsidiaries have not entered
into any material contracts (not being contracts entered into in the ordinary course of business)
within the two (2) years immediately prior to the printing of this Circular:
25
25
7.
(i)
Deed poll dated 24 October 2014 constituting 75,586,889 free detachable warrants
issued under a renounceable rights issue with warrants involving the issuance of new
ordinary shares (“Rights Shares”) and warrants on the basis of one (1) warrant for every
two (2) Rights Shares subscribed; and
(ii)
Share sale agreement dated 31 December 2014 entered into by JIB with Rex Angle Sdn
Bhd for the disposal of its entire equity interest in Nagamas Land Development Sdn Bhd
comprising 4,000,000 ordinary shares of RM1.00 each for RM3,300,000. The said
disposal was completed on 31 December 2014.
DOCUMENTS AVAILABLE FOR INSPECTION
Copies of the following documents are available for inspection at the Registered Office of the
Company at Suite 10.03, Level 10, The Gardens South Tower, Mid Valley City, Lingkaran Syed
Putra, 59200 Kuala Lumpur during normal business hours (except public holidays) from the
date of this Circular up to and including the date of the EGM:
(i)
Memorandum and Articles of Association of JIB;
(ii)
The audited consolidated financial statements of JIB for the two (2) FYEs 31 December
2013 and 2014 and the unaudited consolidated financial statements of JIB for the three
(3) months financial period ended 31 March 2015;
(iii)
The material contracts referred to in Section 6 above;
(iv)
Consent letter and declaration referred to in Section 2 above; and
(v)
The valuation certificate and Valuation Report.
26
26
JIANKUN INTERNATIONAL BERHAD
(Company No. 111365-U)
(Company
111365-U)
(IncorporatedininMalaysia
Malaysia under
under the
Act,
1965)
(Incorporated
theCompanies
Companies
Act,
1965)
NOTICE OF EXTRAORDINARY GENERAL MEETING
Registered Office:
NOTICE IS HEREBY GIVEN THAT an Extraordinary General Meeting
of Jiankun
Suite(“EGM”)
10.03, Level
10
International Berhad (“JIB” or the “Company”) will be held at Dewan Perdana,
Bukit
Kiara
Equestrian
The Gardens South
Tower
& Country Resort, Jalan Bukit Kiara, Off Jalan Damansara, 60000 Kuala Lumpur,
on Tuesday,
Mid Valley
City 14 July
2015 at 10.00 a.m., for the purpose of considering and, if thought fit,Lingkaran
passing Syed
the Putra
following
resolution:
59200 Kuala Lumpur
ORDINARY RESOLUTION
29 June 2015
PROPOSED
Directors: ACQUISITION OF 93 FREEHOLD VACANT SUBDIVIDED PLOTS HELD UNDER
PT
TO PT
H.S.(D)
153315 TO H.S.(D) 153407, MUKIM OF KAJANG,
(Executive
Chairman)
Dato’71831
Ir Lim Siang
Chai71923,
DISTRICT
OF(Executive
ULU LANGAT,
STATE OF SELANGOR (“LAND”), FOR AN AGGREGATE CASH
Lee Leong Kui
Director)
CONSIDERATION
OF RM22,500,000
(“PROPOSED ACQUISITION”)
Foong Kah Heng (Executive
Director)
Tan Sri Dato’ (Dr) Abdul Aziz bin Abdul Rahman (Independent Non-Executive Director)
“THAT,
subject
all relevant
beingNon-Executive
obtained fromDirector)
the relevant authorities, if any, approval
Fathi Ridzuan
bintoAhmad
Fauziapprovals
(Independent
be
and
hereby
given (Independent
to the Company
to acquireDirector)
the Land, for a total cash consideration of
Kamil
binisAbdul
Rahman
Non-Executive
RM22,500,000.00
under the terms
and conditions
as set out in the Circular to Shareholders dated 29
Chan Fook Mun (Independent
Non-Executive
Director)
June 2015 in relation to the Proposed Acquisition.
To: The Shareholders of Jiankun International Berhad
AND THAT the Directors of the Company be and are hereby authorised to take all such steps and do
all things as the they may deem fit, necessary, expedient and/or appropriate in order to implement,
Dear Sir/Madam,
finalise
and give full effect to the Proposed Acquisition with full power to assent to any conditions,
modifications, variations and/or amendments as may be required by the relevant authorities and to
▪ all PROPOSED
ACQUISITION
do
such acts and
things as they may consider necessary or expedient in the interest of the
Company.”
1. ORDER
INTRODUCTION
BY
OF THE BOARD
On Lang
6 April
2015, M&A
Securities, on behalf of the Board, announced that NBSB had on even
Tan Tong
(MAICSA
7045482)
date
entered
into
the
SPA
with BVSB for the Proposed Acquisition.
Chong Voon Wah (MAICSA 7055003)
Company Secretaries
The purpose of this Circular is to provide you with the relevant information on the Proposed
Acquisition and to seek your approval for the resolution pertaining to the Proposed Acquisition
Kuala Lumpur
to 2015
be tabled at the forthcoming EGM. The notice of EGM and the Proxy Form are enclosed in
29 June
this Circular.
Notes:
1.
2.
3.
2.
4.
5.
6.
YOU ARE ADVISED TO READ AND CONSIDER CAREFULLY THE CONTENTS OF THIS
In CIRCULAR
respect of deposited
securities, only WITH
members whose
appear in the record
of depositors
on 9 July 2015
be
TOGETHER
THE names
APPENDICES
BEFORE
VOTING
ON shall
THE
eligible to attend the meeting.
RESOLUTION
PERTAINING
THEis PROPOSED
ACQUISITION
ATA THE
A member
entitled to attend
and vote at TO
the EGM
entitled to appoint
a proxy to attendTO
and BE
voteTABLED
in his stead.
proxy
FORTHCOMING
EGM.
may but need not be a member of the Company and the provision of Section 149(1)(b) of the Companies Act, 1965 shall
not apply to the Company.
A member shall not be entitled to appoint more than two (2) proxies. Where a member appoints two (2) proxies, he shall
specify the proportion of his shareholdings to be represented by each proxy.
THE PROPOSED
TheDETAILS
instrument OF
appointing
a proxy shall beACQUISITION
in writing under the hand of the appointer or his attorney duly authorised in
writing, or if the appointer is a corporation, either under seal or under the hand of an officer or attorney duly authorised.
Where
of the
is an Price
exempt authorised nominee which holds ordinary shares in the Company for
2.1 a member
Basis of
theCompany
Purchase
multiple beneficial owners in one securities account (“omnibus account”), there is no limit to the number of proxies which
the exempt authorised nominee may appoint in respect of each omnibus account it holds.
The appointing
Land, previously
identified
as parent
Lotunder
5682
was
originally
approved
by copy
the
The instrument
a proxy and the
power of attorney
(if any)
which
it is signed
or a notarially
certified
planning
authority
on 7 January
2008
for the atdevelopment
of 10,
93 The
units
of three-storey
thereof must
be deposited
at the Registered
Office of
the Company
Suite 10.03, Level
Gardens
South Tower,
Mid Valley terrace
City, Lingkaran
SyedFollowing
Putra, 59200the
Kuala
Lumpur, not
than forty-eight
(48) hours
the timeas
set PT
for
houses.
approval,
93less
individual
qualified
titlesbefore
identified
holding this meeting or any adjournment thereof.
1
26
JIANKUNINTERNATIONAL
INTERNATIONALBERHAD
BERHAD
JIANKUN
(Company
No.111365-U)
111365-U)
(Company No.
(Incorporated
underthe
theCompanies
Companies
1965)
(IncorporatedininMalaysia
Malaysia under
Act,Act,
1965)
PROXY FORM
Registered Office:
I/We,………….……………………………………………NRIC/Company No…………………………………………………….…
Suite 10.03, Level 10
(Full name in block letters)
The Gardens South Tower
of……………………………………………………………………………………………………..……………………………………...….
Mid Valley City
(Full address)
Lingkaran Syed Putra
being a member(s) of Jiankun International Berhad hereby appoint …………………..……………………….…….
59200 Kuala Lumpur
……….……………………………of…………………….……………………………..……………..…………………………..…..……..
(Full name in block letters)
(Full address)
29 June 2015
or failing whom,…………………………….………………….……………………………..of……..……………..………….……...
(Full name in block letters)
Directors:
…………………………………………………………………………….……………………………………………………………..……...
Dato’ Ir Lim Siang Chai (Executive Chairman)
(Full address)
Lee Leong Kui (Executive Director)
Foong
Kah
Heng (Executive
Director)
or
failing
him/her,
the Chairman
of the Meeting as my/our proxy to attend and vote for me/us on
Tan
Sri
Dato’
(Dr)
Abdul
Aziz
bin Abdul
Rahman
(Independent
Non-Executive
Director)
my/our behalf at the Extraordinary
General
Meeting
(“EGM”) of
the Company
to be held at Dewan
Fathi
Ridzuan
bin
Ahmad
Fauzi
(Independent
Non-Executive
Director)
Perdana, Bukit Kiara Equestrian & Country Resort, Jalan Bukit Kiara, Off Jalan Damansara, 60000
KamilLumpur,
bin AbdulonRahman
(Independent
Kuala
Tuesday,
14 July 2015Non-Executive
at 10.00 a.m.,Director)
or at any adjournment thereof.
Chan Fook Mun (Independent Non-Executive Director)
The proportion of *my/our holding to be represented by *my/our proxies are as follows:
First
(1) __________%
To: Proxy
The Shareholders
of Jiankun International Berhad
Second Proxy (2) __________%
Dear Sir/Madam,
My/Our
proxy is to vote as indicated below:▪
(*
PROPOSED
strike
out whicheverACQUISITION
is not desired)
RESOLUTION
Ordinary
Resolution
Proposed Acquisition
1.
INTRODUCTION
FOR
AGAINST
Please indicate with an “X” in the spaces provided how you wish your vote to be cast. If no specific instruction is given on the
Onproxy/proxies
6 April 2015,
M&A
Securities,
on behalf
of the Board,
voting, the
will vote
or abstain
from voting
on the resolution
at his/herannounced
discretion. that NBSB had on even
date entered into the SPA with BVSB for the Proposed Acquisition.
Dated this__________day of ___________________2015
The purpose of this Circular is to provide you with the relevant information on the Proposed
No. ofAcquisition
Shares heldand to seek your approval for the resolution pertaining to the Proposed Acquisition
to
be tabled
Proxy Form
are enclosed in
of shareholder(s)
CDS Account
No. at the forthcoming EGM. The notice of EGM and the Signature
this
Circular.
or Common Seal
Tel No. (during office hours)
YOU ARE ADVISED TO READ AND CONSIDER CAREFULLY THE CONTENTS OF THIS
CIRCULAR TOGETHER WITH THE APPENDICES BEFORE VOTING ON THE
In respect
of depositedPERTAINING
securities, only members
whose
names appearACQUISITION
in the record of depositors
9 July 2015
be
RESOLUTION
TO THE
PROPOSED
TO BEonTABLED
ATshall
THE
eligible to attend the meeting.
FORTHCOMING
EGM.
A member
entitled to attend
and vote at the EGM is entitled to appoint a proxy to attend and vote in his stead. A proxy
Notes:
1.
2.
may but need not be a member of the Company and the provision of Section 149(1)(b) of the Companies Act, 1965 shall
not apply to the Company.
3.2. A member
shall not
entitled
to appoint more
than two (2) proxies. Where a member appoints two (2) proxies, he shall
DETAILS
OFbe
THE
PROPOSED
ACQUISITION
specify the proportion of his shareholdings to be represented by each proxy.
4. The instrument appointing a proxy shall be in writing under the hand of the appointer or his attorney duly authorised in
2.1 or ifBasis
of theis Purchase
writing,
the appointer
a corporation,Price
either under seal or under the hand of an officer or attorney duly authorised.
5. Where a member of the Company is an exempt authorised nominee which holds ordinary shares in the Company for
account (“omnibus
account”),
there iswas
no limit
to the number
of proxies
multiple beneficial
owners previously
in one securities
The Land,
identified
as parent
Lot 5682
originally
approved
by which
the
the exempt authorised nominee may appoint in respect of each omnibus account it holds.
planning
authority
on the
7 January
2008 for
the under
development
of 93orunits
of three-storey
6. The instrument
appointing
a proxy and
power of attorney
(if any)
which it is signed
a notarially
certified copy
terrace
houses.
93 individual
qualified
identified
PT
thereof must
be deposited
at theFollowing
Registered the
Officeapproval,
of the Company
at Suite 10.03,
Level 10,titles
The Gardens
Southas
Tower,
Mid Valley City, Lingkaran Syed Putra, 59200 Kuala Lumpur not less than forty-eight (48) hours before the time set for
holding this meeting or any adjournment thereof.
✄
1
Fold this flap for sealing
Then fold here
Then fold here
Affix
AFFIX
Stamp
STAMP
THE COMPANY SECRETARIES
JIANKUN INTERNATIONAL BERHAD
(Company No. 111365-U)
Suite 10.03, Level 10
The Gardens South Tower
Mid Valley City
Lingkaran Syed Putra
59200 Kuala Lumpur
1st fold here
1st fold here