Proposed Acquisition of Palmtop Vegeoil Products Sdn Bhd

Company:
Subject:
C.I. Holdings Berhad
Proposed Acquisition of Palmtop Vegeoil Products Sdn Bhd
Contents:
Further to the announcement and reply to query on 12 May 2015 and 14 May 2015 respectively in
relation to the Proposed Acquisition of Palmtop Vegeoil Products Sdn Bhd (266956-P)
(“PALMTOP”), the Board of Directors of the Company wishes to clarify the following:
1)
Why is there a different Amount due to Directors of RM3.5 million and RM3.419 million?
The capitalised Amount due to Directors (Net of consolidating journal entries (“CJEs”)) is as
follows :RM
Capitalisation of Amounts due to Directors
(Being for Plant & Machinery purchases made on behalf – PALMTOP)
Capitalisation of Amounts due to Directors
[Being acquisition costs for PNC Oil Factory (M) Sdn Bhd]
2,238,860
1,261,140*
3,500,000
* The difference of RM 82,140 being the rounding up figure so as to capitalize PALMTOP’s
paid-up capital to an even RM3,500,000 as shown in the CJEs).
2)
Why is there a difference between the earlier announced adjusted NTA of RM7.14 million
and the recent announced adjusted NTA of RM7.178 million?
The NTA as derived via the consolidation of both PALMTOP and it’s 100% owned subsidiary
PNC Oil Factory (M) Sdn Bhd is as follows: RM
Paid-up share capital of Palmtop
Reserve arising from the revaluation of Palmtop Land & building
Accumulated loss
5,500,000
2,786,812
(1,143,882)
7,142,930*
* The recently announced adjusted NTA of RM 7,178,659 dated 14 May 2015 (for a difference
of RM35,729) was calculated in error.
C.I. Holdings Berhad (Company No. 37918-A)
 Proposed Acquisition of Palmtop Vegeoil Products Sdn Bhd [cont’d]
3)
Why did the Company pay a premium of RM1.1 million based on the adjusted NTA of RM7.14
million?
The Company paid a premium based on the following factors:
i)
Dato' Sukumaran s/o Ramasamy’s track record and market reach/clientele in the
consumer pack size for edible oils in over 106 export countries will more than double
Continental Resources Sdn Bhd (“CRSB”)’s current market of 48 countries. In addition
to CRSB’s Middle East and West African markets, the Company will now add new
markets in the Caribbean Islands, Australasia, Europe and the Commonwealth
Independent States countries to its client base.
ii)
The location of the two new companies PALMTOP and PNC Oil Factory (Malaysia) Sdn
Bhd fits into the Group’s strategy of diversifying its manufacturing bases to take
advantage of cost efficient logistics depending on the various export markets the
Company ships to.
iii)
The Company believes the costs of subscribing for RM 8.25 million new shares was a
good buy considering the replacement/construction costs for two newly acquired
building, plants and machinery, both located in Pasir Gudang Johor, otherwise would
have far exceeded what the Company would have to pay for and in a very short
time.
iv)
Furthermore, the two newly acquired plants will further add capacity almost instantly
to the existing plants in Klang and are expected to increase from the current 800 x 20’
Full Container Load (“FCLs”) to 1,500-2,000 FCLs per month.
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