General Announcement
Reference No PC-040430-36897

 

Company Name
:
JOHORE TIN BERHAD   
Stock Name
:
JOHOTIN  
Date Announced
:
13/05/2004  
 
Type : Announcement
Subject : PROPOSED ACQUISITION OF A PORTION OF THE LAND BEARING GERAN NO. 8208, LOT 1850 IN THE MUKIM OF TEBRAU, DAERAH JOHOR BAHRU BY WHOLLY-OWNED SUBSIDIARY, UNICAN INDUSTRIES SDN. BHD.

Contents :

1. INTRODUCTION

Johore Tin Berhad (“JTB” or “the Company”) wish to inform that Unican Industries Sdn. Bhd. (“Unican”), a wholly-owned subsidiary of the Company, has on 13 May, 2004 entered into the following Conditional Agreement with Pingai Sdn. Bhd. (“Pingai”):-

i) Sale and Purchase Agreement (“SPA”) for the proposed acquisition of a portion area of a piece of Land belonging to Pingai.

2. DESCRIPTION OF THE LAND

The land presently an agricultural land, bearing Geran No. 8208, Lot 1850 situated in the Mukim of Tebrau, Daerah Johor Bahru, measuring approximately 19 Acres 2 Roods 16 Poles (“the said Land”).

Unican agreeing to acquire and Pinggai agreeing to sell a portion of the said Land measuring an area of 10.5 Acres (referred to as “the Portion Land”) for a total purchase consideration of RM5,168,394 subject to the terms and conditions as stipulated in the SPA. (“Proposed Acquisition”)

3. INFORMATION ON UNICAN

Unican was incorporated in Malaysia on 21 September, 1988. The authorised share capital of Unican is RM2,000,000 comprising of 2,000,000 ordinary shares of RM1.00 each of which 1,400,000 ordinary shares have been issued and fully paid-up.

The principal activity of Unican is manufacturing of various tins, cans and other containers.

4. INFORMATION OF PINGAI

Pingai was incorporated in Malaysia on 26 September, 1983. .The authorized share capital of Pingai is RM25,000 divided into 25,000 ordinary shares of RM1.00 each and the present issued and paid-up capital is RM2.00 comprising 2 ordinary shares of RM1.00 each.

Pingai is presently a non-operating company. 

5. SALIENT TERMS OF THE CONDITIONAL AGREEMENT

The salient terms and conditions of the Conditional Agreement are set out below.

i) Pingai has applied and has obtained the approval of the relevant authority to convert the land use of the said Land from ‘Agriculture’ to “Industry”. (referred to as the “Application for Conversion”)

ii) Pingai has also applied to the relevant authority to subdivide the said Land into two plots measuring 10.5 Acres (“the Portion Land”) and 8.770 Acres. The said application is pending approval of the relevant authority

iii) The Portion Land will be acquired free from all encumbrances, in particular of any caveat charge with vacant possession and subject to conversion of the said Land to industrial which include the the category of use for “Perusahaan membuat tin-tin, kontena-kontena dan komponen-komponen daripada tinplate dan plastik serta pencetakan offset dan silk-screen keatas tinplate dan plastik” and issuance of separate individual freehold title to the said Land.

iv) Unican intends to transfer and Pingai having agreed to accept the transfer by Unican of a piece of land belonging to Unican held currently under EMR 2676, Lot 246, in the Mukim of Tebrau, Daerah Johor Bahru, measuring 5.478 Acres (referred to as “the set off Land”) for an agreed price of RM2,696,391 as part payment of the total purchase price. Unican had submitted an application for the subdivision of the set off Land and approval had been secured from the relevant authority for subdivision. The Original Issue Document of Title pertaining to the said set off Land has been surrendered to the relevant authority pending the issuance of the subdivided titles.

6. PROPOSED ACQUISITION OF THE PORTION LAND

The total purchase consideration of RM5,168,394.00 was arrived at on a willing-buyer and willing-seller basis and taking into consideration the current market values of the Land.

The Proposed Acquisition of the Portion Land will be financed by Unican from bank borrowings and/or internally generated funds and by the set off Land as mentioned under 5(iv) above.

There are no liabilities to be assumed by Unican arising from the Proposed Acquisition.

7. RATIONALE OF THE PROPOSED ACQUISITION

The Proposed Acquisition is in the best interest in view of the proximity location to existing factory plant for future expansion of production capacity of the JTB Group.

8. PROSPECTS AND RISK FACTORS

i) Prospects

The portion land acquired will provide additional opportunity for the Group to expand the existing business in future. The proximity location of the portion land is an advantage to the Group, as it will enable greater control over future operations.

ii) Risk Factors

The risk factor involved is the competition from other tinplates players.

9. EFFECTS OF THE PROPOSED ACQUISITION

The proforma effects of the Proposed Acquisition on the share capital, NTA, earnings and major shareholders of JTB are as follows:-

i) Share Capital

The Proposed Acquisition will not have any effect on the issued and paid-up share capital of JTB.

ii) Net Tangible Assets (“NTA”)

The Proposed Acquisition is not expected to have any significant effect on the NTA of JTB Group.

iii) Earnings

The Proposed Acquisition will not have any immediate effect on the earnings of JTB Group. The Management of JTB is of the opinion that the Proposed Acquisition is expected to contribute positively to the earnings of JTB Group in the long term.

iv) Major Shareholders

The Proposed Acquisition is not expected to have any significant effect on the shareholdings of the major shareholders of JTB.

10. CONDITIONS OF THE PROPOSED ACQUISITION

The Proposed Acquisition is conditional upon the following approvals being obtained:-

i) the State Authorities to be obtained by Pingai as agreed; and
ii) the Shareholders of Unican at an Extraordinary General Meeting (“EGM”) to be convened pursuant toSection 132(C) of the Companies Act, 1965.

Based on the purchase consideration of RM5,168,394 the Proposed Acquisition is within the authority of the Board of Directors of JTB and does not require approvals of the shareholders of JTB.

11. DIRECTORS’ AND MAJOR SHAREHOLDERS’ INTEREST

None of the Company’s Directors, major shareholders or person connected with them have any interest, direct or indirect in the Proposed Acquisition.

12. DIRECTORS’ OPINION

The Board of Directors of JTB is of the opinion that the terms of the Proposed Acquisition are fair and reasonable and that the Proposed Acquisition is in the best interest of the JTB Group.

13. DOCUMENTS AVAILABLE FOR INSPECTION

A Copy of the SPA is available for inspection at the Registered Office of JTB at No. 19, Jalan Tun Abdul Razak, Susur 1/1, 80000 Johor Bahru, Johor, during normal office hours from Mondays to Fridays (except Public Holidays) within 14 days from the date of this announcement.

THIS ANNOUNCEMENT IS DATED 13 MAY, 2004.