Email This Print This News

Proposed Disposal of Properties To Eminent Ace Sdn Bhd For A Sale Consideration Of RM38.0 Million

BackJul 12, 2007
1. INTRODUCTION
The Board of Directors of Malaysia Building Society Berhad ("MBSB" or "the Company") wishes to announce that the Company has entered into a Sale and Purchase Agreement dated 12 July 2007 ("SPA") with Eminent Ace Sdn Bhd ("Purchaser") for the proposed disposal of three (3) pieces of land held under titles nos. H.S. (D) 93832 PT 27758, Mukim of Sungai Buluh, District of Petaling, State of Selangor, H.S.(D) 93833, PT 27759, Mukim of Sungai Buluh, District of Petaling, State of Selangor and H.S.(D) 95375, PT 29301, Mukim of Sungai Buluh, District of Petaling, State of Selangor respectively for a total sale consideration of RM38,000,000.00 ("Proposed Disposal").


2. THE PROPOSED DISPOSAL

2.1 The Settlement Property

The subject properties which was transferred or acquired by the Company via a sale and purchase agreement dated 3 July 1996 by way of set-off against the interest outstanding and the balance sum on the purchase price of the Property owing by the corporate borrower to the Company. The property are known as H.S. (D) 93832 PT 27758, Mukim of Sungai Buluh, District of Petaling, State of Selangor, H.S.(D) 93833, PT 27759, Mukim of Sungai Buluh, District of Petaling, State of Selangor and H.S.(D) 95375, PT 29301, Mukim of Sungai Buluh, District of Petaling, State of Selangor respectively("Property").

Messrs Jurunilai Bersekutu had, on 30 November 2006, ascribed an open market value of RM32, 000,000.00 to the Property.
2.2 Sale Consideration
The sale consideration of RM38,000,000.00 ("Sale Price") for the Proposed Disposal was arrived at on a willing buyer willing seller basis after taking into account the open market value ascribed to the Property of RM32,000,000.00.

The net book value of the Property as at 31 December 2006 was RM31,999,000.00.


2.3 Salient Terms of the SPA
The SPA's salient terms, inter-alia, are as follows:

(i) The Property shall be purchased on an "as is where is basis" free from encumbrances on "as is where is basis" and without vacant possession;

(ii) The tenure of the SPA is three (3) months from the date of execution of the SPA;

(iii) The payment terms are as follows:
(a) A non-refundable Deposit sum of RM3,800,000.00 being 10 % of the Sale Price ;

(b) The balance of the Purchase Price of RM34,200,000.00 shall be paid to MBSB within the period of three (3) months from the date of execution of the SPA ("Completion Date"). MBSB hereby agrees to extend the Completion Date by a further period of one (1) month from the date of expiry of the Completion Date (the "Extended Completion Date") subject to the payment interest by the Purchaser which shall be paid in one lump sum together with the payment of the balance of Sale Price.


(iv) Default by the Purchaser
In the event the Purchaser failing to pay or refusing to complete the Proposed Disposal or commits an act of bankruptcy or enter into any composition or arrangement with its creditors or being accompany enters into liquidation (whether compulsory or voluntary), the Company shall be entitled to, inter alia terminate the SPA and the sum of RM3,800,000.00 being the Deposit shall be forfeited by the Company and the balance of monies paid by the Purchaser, if any , shall be refunded free of interest to the Purchaser by the Company and neither party to the SPA shall have any further claims against the other in respect of the SPA.

(v) Default by the Company
If the Company commits a breach of the terms and conditions contained in the SPA or fails to perform and observe all or any of the covenants herein contained compulsory or voluntary;then as an alternative to the Purchaser's right to specific performance, the Purchaser shall be entitled to forthwith terminate the SPA by written notice to the Company

(a) all monies paid to the Vendor or the Solicitors towards account of the Purchase Price under this Agreement shall forthwith be refunded by the Company in full to the Purchaser free from interest;

(b) the SPA shall become null and void and neither party shall have any claim whatsoever against the other save and except for antecedent breach.

2.4 Brief Details On The Purchaser
The Purchaser, Eminent Ace Sdn Bhd (341126-T), was incorporated on 12 December 1995 in Malaysia under the Companies Act, 1965. Its registered address is at E203, 1st Floor, Kelana Parkview, 1, Jalan SS6/2, Kelana Jaya 47301 Petaling Jaya, Selangor Darul Ehsan

The principal activities of the Purchaser are property investment and investment holding.



3. RATIONALE FOR THE DISPOSAL
The Proposed Disposal is in line with the Company's objective to dispose of properties transferred or acquired through Sale and Purchase Agreement.

4. CONDITIONS PRECEDENT

The Proposed Disposal is subject to the following conditions:

(i) the Foreign Investment Committee's approval.

5. UTILISATION OF PROCEEDS

The proceeds of RM38,000,000.00 from the Proposed Disposal would be utilised towards working capital, commission payable relating to the said disposal and/or repayment of borrowings.

6. EFFECTS OF THE PROPOSED DISPOSAL

6.1 Share capital and substantial shareholders' shareholdings structure
The Proposed Disposal will not have any effect on the share capital and substantial shareholders' shareholdings structure as there are no issuance of shares or other securities.

6.2 Earnings
The Proposed Disposal is expected to be completed in 2007 and would result in an approximate gain of RM5,621,000 million (after taking account the commission payable) to the Group for the financial year ending 31 December 2007.

The basic earnings per share of the Group for the financial year ending 31 December 2007 would improve by RM0.02 sen arising from the Proposed Disposal.

6.3 Net Assets
The Proposed Disposal would not have any material effect on the net assets per share of the Company and of the Group.


7. DIRECTORS AND/OR MAJOR SHAREHOLDERS' INTERESTS OR PERSONS CONNECTED
None of the Directors and/or major shareholders of the Company or persons connected to them have any interest, direct or indirect, in the Proposed Disposal.


8. STATEMENT BY DIRECTORS
The Board of Directors of the Company is of the opinion that the Proposed Disposal is in the best interests of the Company and of the Group.


9. STATEMENT IN RESPECT OF SECURITIES COMMISSION'S POLICIES AND GUIDELINES AND OFFER OF SECURITIES
The Proposed Disposal has not departed from the Securities Commission's Policies and Guidelines and Offer of Securities.

10. DOCUMENTS FOR INSPECTION
The SPA and the valuation report together with the update valuation letter) can be inspected at the Company's registered office at 11th Floor, Wisma MBSB, 48 Jalan Dungun, Damansara Heights, 50490 Kuala Lumpur at normal business hours on Mondays to Fridays (except public holidays) within 14 days from the date of this announcement.

11. This announcement is dated 12 July 2007.