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Proposed Disposal of a Piece of Property To Sazean Development Sdn Bhd For A Sale Consideration Of RM28.0 Million

BackJul 13, 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 13 July 2007 ("SPA") with Sazean Development Sdn Bhd ("Purchaser") for the proposed disposal of the property title no. GM 105, Lot 274, Tempat Bt 4 Ampang Road, in the Mukim of Ampang, District of Kuala Lumpur, and in the State of Wilayah Persekutuan for a sale consideration of RM28,000,000.00 ("Proposed Disposal").
2. PROPOSED DISPOSAL

2.1 The Property

The Company is the registered owner of the Property known as GM 105, Lot 274, Tempat Bt 4 Ampang Road measuring 10546.77 square meters and is located in the Mukim of Ampang, District of Kuala Lumpur ("Property").

Messrs Hakimi & Associates Sdn Bhd had, on 9 August 2006, ascribed an open market value on "As is" Basis of RM19,300,000.00 to the Property .
2.2 Sale Consideration
The sale consideration of RM28,000,000.00 (" Sale Price") for the Proposed Disposal was arrived at on a willing buyer willing seller basis after taking into account the open market value on "As is" Basis ascribed to the Property of RM19,300,000.00
The net book value of the Property as at 31st December 2006 was RM 18,534,000.00
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" subject to all existing encumbrances and it shall comply with conditions and restrictions affecting the Property and without vacant possession;

(ii) The tenure of the SPA is one (1) year from the date of the SPA;

(iii) The payment terms are as follows:
(a) A non-refundable Deposit sum of RM500,000.00 ;
(b) Second non-refundable Deposit within six (6) months from the execution of the SPA of RM500,000.00 ;

(iv) The final balance of the Sale Price will be paid as follows:
(a) a sum of of RM27,000,000.00 shall be paid within one (1) year from the date of execution of the SPA ("Completion Date") with no further extension period granted to the Purchaser .

(v) 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 RM 1,000,000.00 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.

(vi) 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, Sazean Development Sdn Bhd (737959-T), was incorporated on 16 June 2006 in Malaysia under the Companies Act, 1965. Its registered address is at Waterfront Business Park, Block D, No 3, Jalan Tasik, Mines Resort City, Seri Kembangan, 43300 Selangor Darul Ehsan.

The principal activity of the Purchaser is realty development company.

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

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 RM28,000,000.00 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 2008 and would result in an approximate gain of RM9,186,000 million (after taking account the commission payable) to the Group for the financial year ending 31 December 2008.

The basic earnings per share of the Group for the financial year ending 31 December 2007 would improve by RM0.03 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, 50470 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 13 July 2007.