CONDITIONAL OFFER BY DRB-HICOM TO DISPOSE TO POS MALAYSIA BERHAD ( POS MALAYSIA ) THE FOLLOWING:

Size: px

Start display at page:

Download "CONDITIONAL OFFER BY DRB-HICOM TO DISPOSE TO POS MALAYSIA BERHAD ( POS MALAYSIA ) THE FOLLOWING:"

Morgan Jordan
6 years ago
Views:

1 DRB-HICOM BERHAD ( DRB-HICOM OR COMPANY ) CONDITIONAL OFFER BY DRB-HICOM TO DISPOSE TO POS MALAYSIA BERHAD ( POS MALAYSIA ) THE FOLLOWING: (I) THE ENTIRE ISSUED AND PAID-UP SHARE CAPITAL OF KL AIRPORT SERVICES SDN BHD ( KLAS ); AND (II) PART OF A PARCEL OF FREEHOLD INDUSTRIAL LAND SITUATED IN SECTION 28, SHAH ALAM, SELANGOR DARUL EHSAN (COLLECTIVELY REFERRED TO AS OFFER ) 1. INTRODUCTION On behalf of the Board of Directors of DRB-HICOM ( Board ), Maybank Investment Bank Berhad ( Maybank IB ) wishes to announce that the Company has made an offer to Pos Malaysia via a letter dated 10 December 2015 ( Offer Letter ), which sets out DRB-HICOM s conditional offer to dispose the following to Pos Malaysia: the entire issued and paid-up share capital of KLAS held by HICOM Holdings Berhad ( HICOM Holdings ), a wholly-owned subsidiary of DRB-HICOM, comprising 88,328,527 ordinary shares of RM1.00 each in KLAS ( KLAS Shares ), 35,300,000 cumulative redeemable convertible preference shares of RM1.00 each in KLAS ( KLAS RCPS ) and such number of New KLAS Shares (as defined in Section of this Announcement) to be issued on a later date, for a total disposal consideration of RM million, subject to the adjustment as set out in Section of this Announcement ( Proposed KLAS Disposal ); and part of a parcel of freehold industrial land held under GRN Lot 62010, Pekan HICOM, District of Petaling, State of Selangor Darul Ehsan located along Jalan Jijan 28/35, Section 28, Shah Alam measuring acres ( Section 28 Land ) beneficially held by HICOM Indungan Sdn Bhd ( HICOM Indungan ), an indirect wholly-owned subsidiary of DRB-HICOM, for a disposal consideration of RM69.0 million ( Proposed Land Disposal ). (The Proposed KLAS Disposal and Proposed Land Disposal are collectively referred to as Proposed Disposals ) The total disposal consideration of RM million in respect of the Proposed Disposals shall be satisfied via the issuance of 250,798,799 new ordinary shares of RM0.50 each in Pos Malaysia ( Pos Malaysia Shares ) to HICOM Holdings at an issue price of RM3.33 per Pos Malaysia Share ( Consideration Shares ), subject to the adjustment as set out in Section of this Announcement. For the avoidance of doubt, the Consideration Shares to be issued by Pos Malaysia in respect of the Proposed Land Disposal are to be issued directly to HICOM Holdings at the nomination of HICOM Indungan. In conjunction with the Proposed Disposals, DRB-HICOM and persons acting in concert with it ( PACs ) (including HICOM Holdings) intend to seek an exemption from the Securities Commission Malaysia ( SC ) under Paragraph 16.1(a) of Practice Note 9 of the Malaysian Code on Take-Overs and Mergers, 2010 ( Code ) from the obligation to undertake a mandatory takeover offer for the remaining Pos Malaysia Shares not already owned by them after the Proposed Disposals ( Proposed Exemption ). (The Proposed Disposals and Proposed Exemption are collectively referred to as Proposals ) Further details of the Offer are set out below and in the Offer Letter, which is attached in this Announcement. 1

2 2. DETAILS OF THE PROPOSED DISPOSALS AND SALIENT TERMS OF THE OFFER LETTER 2.1 Proposed KLAS Disposal The Proposed KLAS Disposal involves the disposal by HICOM Holdings of 100% equity interest in KLAS comprising 88,328,527 KLAS Shares, 35,300,000 KLAS RCPS and such number of New KLAS Shares (as defined in Section of this Announcement) to be issued on a later date, for a total disposal consideration of RM million to be satisfied via the issuance of new Pos Malaysia Shares to HICOM Holdings at an issue price of RM3.33 per Pos Malaysia Share. The disposal consideration for the Proposed KLAS Disposal is subject to the adjustment as set out in Section of this Announcement while the issue price for the Consideration Shares is subject to the adjustment as set out in Section of this Announcement The Proposed KLAS Disposal shall be subject to the following: (iii) the transfer of two (2) parcels of agriculture land measuring a total of acres comprising acres held under HSD PT 9 and acres held under HSD PT10 located in Bandar Kota Perdana, Mukim Sungai Laka, Daerah Kubang Pasu, Kedah Darul Aman ( Kota Perdana Land ) currently beneficially held by Konsortium Logistik Berhad ( KLB ), a wholly-owned subsidiary of KLAS, at the prevailing net book values on the date of the transfer, to HICOM Vertex Sdn Bhd, an indirect wholly-owned subsidiary of DRB- HICOM ( Transfer of Kota Perdana Land ); the capitalisation of an existing loan facility obtained by KLAS of up to RM370.0 million ( KLAS Loan Facility ) via the issuance of new KLAS Shares at par value directly to HICOM Holdings ( Capitalisation of KLAS Loan Facility ); and the capitalisation of non-current inter-company amount owing by KLAS to DRB-HICOM ( Amount Owing to DRB-HICOM ) totalling approximately RM182.9 million as at 30 November 2015 via the issuance of new KLAS Shares at par value directly to HICOM Holdings at the nomination of DRB-HICOM ( Capitalisation of Amount Owing to DRB-HICOM ). The new KLAS Shares to be issued by KLAS to HICOM Holdings pursuant to the Capitalisation of KLAS Loan Facility and Capitalisation of Amount Owing to DRB-HICOM (collectively referred to as New KLAS Shares ) shall form part of the KLAS Shares to be disposed by HICOM Holdings to Pos Malaysia pursuant to the Proposed KLAS Disposal. The Transfer of Kota Perdana Land and Capitalisation of Amount Owing to DRB-HICOM shall be completed prior to the completion of the Proposed KLAS Disposal whilst the Capitalisation of KLAS Loan Facility shall be completed after the definitive sale and purchase agreement in respect of the Proposed KLAS Disposal becomes unconditional and prior to the completion of the Proposed KLAS Disposal. 2

3 2.1.3 The disposal consideration for the Proposed KLAS Disposal is subject to adjustment based on the difference between the following: the outstanding amount in respect of the KLAS Loan Facility as at 31 August 2015 of approximately RM286.8 million; and the outstanding amount in respect of the KLAS Loan Facility as at the latest practicable date preceding the completion date of the Proposed Disposals to be mutually agreed upon by the respective parties HICOM Holdings is a wholly-owned subsidiary of DRB-HICOM The disposal consideration for the Proposed KLAS Disposal of RM million was arrived at after taking into consideration, among others, the indicative value of the entire equity interest in the KLAS group of companies ( KLAS Group ) of between RM699 million and RM775 million as at 31 August 2015, as appraised by KPMG Corporate Advisory Sdn Bhd ( KPMG ) (being the independent valuer appointed by DRB-HICOM for the valuation of the equity interest of the KLAS Group) using the discounted cash flow valuation approach and market approach. The indicative value of the entire equity interest in the KLAS Group was arrived at by KPMG after making the relevant adjustments for the Transfer of Kota Perdana Land, Capitalisation of KLAS Loan Facility of RM286.8 million as at 31 August 2015 and capitalisation of Amount Owing to DRB-HICOM of RM157.9 million as at 31 August 2015, and also after taking into consideration the market value of a parcel of freehold land under Deeds No to 36828, Lot/Survey Nos. 104/1976, 24/1977, 25/1978, 62/1979, 61/1980, 60/1981 and 59/1982 respectively, Samnak Kham Sub-District, Sadao District, Songkhla Province, Thailand measuring acres ( Sadao Land ) of RM57.16 million (equivalent to Thai Baht ( THB ) million converted into RM based on the exchange rate of THB100:RM , being the middle rate quoted by Bank Negara Malaysia as at 5.00 p.m. on 7 December 2015) as at 7 December The market value of the Sadao Land which comprises unused warehouses and related buildings and vacant adjacent land was appraised by C.I.T. Property Consultants Co., Ltd. and C.I.T. Appraisal Co., Ltd. (being the independent registered valuer appointed by DRB-HICOM) in its valuation report dated 7 December The market value of the Sadao Land was arrived at using the depreciated replacement cost method and market approach. 2.2 Proposed Land Disposal The Proposed Land Disposal involves the disposal by HICOM Indungan of part of the Section 28 Land, free from encumbrances to Pos Malaysia, for a disposal consideration of RM69.0 million to be satisfied via the issuance of new Pos Malaysia Shares to HICOM Holdings, at the nomination of HICOM Indungan, at an issue price of RM3.33 per Pos Malaysia Share, subject to the adjustment as set out in Section of this Announcement HICOM Indungan is a wholly-owned subsidiary of Glenmarie Properties Sdn Bhd, which in turn is a wholly-owned subsidiary of HICOM Berhad, a whollyowned subsidiary of HICOM Holdings, which in turn is a wholly-owned subsidiary of DRB-HICOM. 3

4 2.2.3 The disposal consideration for the Proposed Land Disposal of RM69.0 million was arrived at based on the market value of the Section 28 Land of RM69.0 million as at 9 November 2015 as appraised by C H Williams Talhar & Wong Sdn Bhd ( C H Williams ) (being the independent registered valuer appointed by DRB-HICOM) in its valuation report dated 19 November The market value for the Section 28 Land was arrived at using the comparison method as the main method and residual method as a check method. 2.3 Basis of arriving at the issue price for the Consideration Shares The issue price of RM3.33 per Consideration Share was arrived at after taking into consideration, among others, the five (5)-day, one (1)-month and three (3)-month volume weighted average market price of Pos Malaysia Shares up to and including 9 December 2015, being the last full trading day immediately prior to this Announcement, of RM3.13, RM3.33 and RM3.56 per POS Malaysia Share respectively. 2.4 Salient terms and conditions of the Offer The issue price for the Consideration Shares shall be adjusted in the event the market price of Pos Malaysia Shares on a date closer to the signing of the sale and purchase agreements in relation to each of the Proposed Disposals ( SPAs ) exceeds a 10% variance from the issue price stipulated in the Offer Letter. For the avoidance of doubt, no adjustment shall be made where the variance is within 10%. The adjusted issue price for the Consideration Shares shall be determined on the latest practicable date immediately prior to the signing of the SPAs The SPAs, the terms and conditions of which shall be mutually agreed upon by the respective parties, shall be executed within three (3) months from Pos Malaysia s acceptance of the Offer or such other mutually agreed extended period. During this period, Pos Malaysia may undertake a due diligence exercise for a period of up to two (2) months on the KLAS Group and the Section 28 Land prior to the commencement of the negotiations of the terms in the SPAs The completion of the SPAs shall be conditional upon, among others, the following being obtained: (iii) (iv) approval of the shareholders of Pos Malaysia for the proposed acquisitions of KLAS and the Section 28 Land, and the Proposed Exemption; approval of the shareholders of DRB-HICOM for the Proposed Disposals; approval of the SC for the Proposed Exemption; and such other approval, consent or waiver from any other relevant authority or third party which is required for the Proposals DRB-HICOM agrees that from the date of the Offer Letter and until the execution of the SPAs which shall be no later than the expiration of the period specified in Section of this Announcement ( Exclusivity Period ), the Company shall, among others: not sell, transfer or otherwise dispose of KLAS (including any of the companies under the KLAS Group) and/or the Section 28 Land to any third party; 4

5 (iii) not negotiate, initiate or take any step with a view to negotiations with any third party for any purpose in relation to the sale and purchase of KLAS (including any of the companies under the KLAS Group) and/or the Section 28 Land; and take all necessary steps and actions to execute the SPAs within the Exclusivity Period in respect of the Proposed Disposals upon the terms and subject to the conditions as may be mutually agreed upon by the respective parties. 2.5 Inter-conditionality The Proposed KLAS Disposal and Proposed Land Disposal are inter-conditional upon each other and shall only be implemented after the completion of the Transfer of Kota Perdana Land, Capitalisation of KLAS Loan Facility and Capitalisation of Amount Owing to DRB-HICOM. The Proposed Disposals and Proposed Exemption are inter-conditional upon one another. 3. BACKGROUND INFORMATION ON KLAS KLAS is a wholly-owned subsidiary of HICOM Holdings, which is a wholly-owned subsidiary of DRB-HICOM. The principal activities of KLAS are to carry out airport related ground handling, in-flight catering, cargo handling, warehousing space and supply chain management including custom forwarding agent services. As at the date of this Announcement, KLAS has three (3) wholly-owned subsidiaries, namely, KLB, DRB-HICOM ASIA Cargo Express Sdn Bhd ( DHACE ) (formerly known as Gading Sari Aviation Services Sdn Bhd) and KLAS Engineering Services Sdn Bhd ( KESSB ), details of which are as follows: Name KLB and its subsidiaries DHACE and its subsidiary KESSB Principal activities Provision of total logistics services and inventory solutions, which include the provision of container haulage services, freight forwarding, shipping agency and chartering services, warehousing and distribution services and insurance agency Provision of air cargo transport and aircraft leasing Provision of aircraft maintenance and engineering services 4. BACKGROUND INFORMATION ON THE SECTION 28 LAND Details of the Section 28 Land are as follows: Postal address : Jalan Jijan 28/35, Section 28, Shah Alam, Selangor Darul Ehsan Title details : GRN Lot 62010, Pekan HICOM, District of Petaling, State of Selangor Darul Ehsan Parent title land area : 65,161 square metres Land area under valuation : acres (40, square metres) (1) Tenure : Freehold Category of land use : Industrial 5

6 Express condition : Light industry Existing use : Erected with a building/structure which is currently not utilised (such structure was not taken into consideration by C H Williams in arriving at the market value of the Section 28 Land) Proposed use : Approved for development of 30 units of semi-detached factories and two (2) units of detached factories Encumbrances : Nil Audited net book value as at 31 March 2015 : RM19.0 million Note: (1) Represents the land area to be disposed to Pos Malaysia under the Proposed Land Disposal. 5. RATIONALE AND BENEFITS OF THE PROPOSED DISPOSALS The Proposed Disposals, if implemented, will allow DRB-HICOM to streamline and improve the operational efficiency and enhance the synergies between the various business segments within its postal and logistics businesses which are currently managed under Pos Malaysia and the KLAS Group respectively by consolidating the logistics business under Pos Malaysia. The Proposed Disposals are also expected to improve the medium to long-term earnings potential of Pos Malaysia and its subsidiaries. The Proposed Disposals will not change the existing postal businesses of Pos Malaysia. It will however, complement and strengthen the ecosystem of the logistic businesses of Pos Malaysia and the DRB-HICOM group of companies. 6. DIRECTORS AND MAJOR SHAREHOLDERS INTERESTS Save as disclosed below, none of the Directors and major shareholders of DRB-HICOM as well as persons connected with them have any interest, direct or indirect, in the Proposals. Brigadier General (K) Tan Sri Dato Sri (Dr) Haji Mohd Khamil bin Jamil ( Tan Sri Khamil ) is the Group Managing Director of DRB-HICOM and the Non-Independent Non-Executive Chairman of Pos Malaysia. Due to his common directorship in both DRB-HICOM and Pos Malaysia, Tan Sri Khamil has voluntarily abstained and will continue to abstain from deliberating and voting on the Proposals at the Board meetings of the Company. In addition, Tan Sri Khamil will also voluntarily abstain from voting in respect of his direct shareholdings in DRB-HICOM on the resolutions pertaining to the Proposals at the extraordinary general meeting of the Company. 7. DIRECTORS STATEMENT The Board, save for Tan Sri Khamil (who has abstained for the reasons set out in Section 6 of this Announcement), is of the opinion that, subject to the Offer being accepted by Pos Malaysia and the terms and conditions of the SPAs to be agreed upon with Pos Malaysia, the Proposals will be in the best interest of DRB-HICOM. 8. ADVISER Maybank IB has been appointed as Principal Adviser to DRB-HICOM for the Proposals. 6

7 9. DOCUMENT AVAILABLE FOR INSPECTION The Offer Letter will be available for inspection at the registered office of DRB-HICOM at Level 5, Wisma DRB-HICOM, No. 2, Jalan Usahawan U1/8, Seksyen U1, Shah Alam, Selangor Darul Ehsan during normal business hours from Mondays to Fridays (except public holidays) for a period of three (3) months from the date of this Announcement. An announcement will be made upon receipt of Pos Malaysia s decision on the Offer by 23 December 2015, unless extended by DRB-HICOM. A detailed announcement on the Proposals will be made upon execution of the SPAs. This Announcement is dated 10 December

The principal activities of UMWD are mainly investment holding and property development.

The principal activities of UMWD are mainly investment holding and property development. 1. INTRODUCTION UMW Holdings Berhad ( UMW Holdings or the Company ) wishes to announce that its wholly-owned subsidiary, UMW Corporation Sdn Bhd ( UMWC ), has today entered into a Settlement Agreement