DISPOSAL OF WIJAYA INTERNATIONAL MEDICAL CENTRE SDN BHD, A WHOLLYOWNED SUBSIDIARY OF WIJAYA BARU GLOBAL BERHAD (“DISPOSAL”)
1.
INTRODUCTION
The Board of Directors of Wijaya Baru Global Berhad (“WBGB” or “the Company”) wishes to
announce that the Company has on 1 November 2010, entered into a Share Sale Agreement
(“the Agreement”) with Prestige Precious Sdn Bhd (Company No. 916238-P) (“Purchaser”) to
dispose of 100% equity interest in Wijaya International Medical Centre Sdn Bhd (“WIMC”), a
wholly-owned subsidiary of WBGB, comprising 50,000,000 ordinary shares of RM1.00 each, for
a total cash consideration of RM20,000,000.00 only (“Sale Price”). The Sale Price was arrived
at based on negotiations on a willing-buyer willing-seller basis after taking into consideration the
financial performance, plant and machinery valuation and independent valuation on fair value of
WIMC.
2.
INFORMATION OF WIMC
WIMC was incorporated in Malaysia under the Companies Act, 1965 on 17 July 2003 as a
private company limited by shares. At present, the authorized share capital of WIMC is
RM50,000,000.00 divided into 50,000,000 ordinary shares of RM1.00 each of which all the
50,000,000 ordinary shares of RM1.00 each have been issued and fully paid-up. The principle
activity of WIMC is operation of a medical centre.
3.
INFORMATION OF THE PURCHASER
The Purchaser was incorporated in Malaysia under the Companies Act, 1965 on 29 September
2010 as a private company limited by shares. At present the authorized share capital of the
Purchaser is RM100,000.00 divided into 100,000 ordinary shares of RM1.00 each of which 2
ordinary shares of RM1.00 each have been issued and fully paid-up. The principle activities of
the Purchaser are that of investment holding and general trading.
4.
SALIENT TERMS OF THE AGREEMENT
4.1
A sum of RM2,000,000.00 only which is equivalent to 10% of the Sale Price as earnest
deposit and part payment of the Sale Price upon execution of the Agreement.
4.2
The balance Sale Price in the sum of RM18,000,000.00 only (“Balance Sale Price”) shall
be paid by the Purchaser within twelve months from the date of execution of the
Agreement (“Payment Date”).
4.3
In the event the Purchaser is unable to pay the Balance Sale Price by the Payment Date,
at the request of the Purchaser, the Company shall grant to the Purchaser an extension of
time of six months (“Extended Period”) commencing from the date following the Payment
Date to pay the Balance Sale Price provided always that interest shall accrue on the
Balance Sale Price at a rate of 8% per annum calculated on daily rests from the date of
expiry of the Payment Date up to the date of full payment of the Balance Sale Price.
4.4
The Company agrees and consents to the registration of the Sale Shares in the name of
the Purchaser and to the change of the board of directors and bank signatories of WIMC
and to pass the management and control of WIMC to the Purchaser upon execution of the
Agreement.
4.5
As security for the payment of the Balance Sale Price, the Purchaser agrees, covenants
and undertakes with the Company that immediately upon the issuance of the new share
certificates for the Sale Shares in the name of the Purchaser, the Purchaser shall deposit
the requisite documents with the Company’s solicitors as stakeholders.
4.6
As security for the payment of the Balance Sale Price, the Purchaser undertakes and
covenants with the Company to cause Chen Khai Voon (NRIC No. 600924-10-6577) and
Chen Kim Lian (NRIC No. 620127-10-5502) to jointly and severally guarantee the payment
of the Balance Sale Price (“Personal Guarantee”).
5.
CONDITIONS TO THE DISPOSAL
5.1
The Purchaser undertakes and covenants with the Company to discharge the Company
as guarantor for the credit facilities within three months from the date of the Agreement.
Pending the discharge, the Purchaser indemnifies and keeps the Company indemnified of
any claims, liabilities, damages, costs and expenses which may arise under the credit
facilities.
5.2
The Purchaser shall assume all assets and liabilities of WIMC except the inter-company
advances in the total sum of RM40,905,335.24 granted by WBGB and its subsidiaries to
WIMC, details are as follows:
Name of Companies
Amount of inter-company
Advances as at 30/09/2010
(RM)
WBGB
29,612,539.84
Usama Industries Sdn Bhd
4,022,795.40
Wijaya Baru Development Sdn Bhd
7,270,000.00
Total
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40,905,335.24
6.
FINANCIAL INFORMATION
Financial information for WIMC for the past 3 years was as follows:
Financial year ended
Revenue
Cost of sales
Gross (Loss) / Profit
Other operating income
Marketing costs
Administrative expenses
Operating Loss
Finance cost
Loss before taxation
Taxation
Net loss for the financial year
31-12-2009
RM (audited)
11,763,838
(11,959,008)
(195,170)
72,373
(99,574)
(8,565,998)
(8,788,369)
(1,213,263)
(10,001,632)
76,469
(9,925,163)
31-12-2008
RM (audited)
9,916,976
(9,867,470)
49,506
30,153
(90,230)
(7,282,817)
(7,293,388)
(1,440,137)
(8,733,525)
(1,379,357)
(10,112,882)
31-12-2007
RM (audited)
10,410,088
(8,365,642)
2,044,446
68,134
(156,822)
(6,533,253)
(4,577,495)
(365,274)
(4,942,769)
(466,078)
(5,408,847)
Loss before taxation margin
Loss after taxation margin
Total Assets
Net Assets / ((Liabilities)
Borrowings
Gearing / Net Assets (times)
85.02%
84.37%
63,962,785
(27,996,307)
N/A
N/A
88.07%
101.97%
70,338,467
(18,071,144)
N/A
N/A
47.48%
51.96%
79,869,013
(7,958,262)
N/A
N/A
7.
DATE AND ORIGINAL COST OF INVESTMENT
The original cost of investment of the sale shares amounted to RM50,000,000.00. The sale
shares were acquired on 17 July 2003, 26 August 2003 and 30 March 2010.
8.
RATIONALE OF THE DISPOSAL
The business of WIMC has not recorded any profit since its inception in September 2005. The
Disposal represents an opportunity for the Company to divest of a non-profitable operation and
to focus its resources, both financial and management time on its current activities,
development and construction and to identify new ventures. The proceeds from the Disposal will
be utilised for working capital requirements of the Group.
9.
EFFECTS OF THE DISPOSAL
9.1
Share Capital and Substantial Shareholders’ Shareholdings
The Disposal will not have any effect on the share capital or affect the substantial shareholders’
shareholdings of WBGB.
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9.2
Earnings and Net Assets
The Disposal is expected to reduce the Group’s earnings and Group’s Net Assets by
approximately RM34.0 million. The Group’s loss per share will be increased to 32.72 sen from
20.45 sen which is based on the latest audited consolidated financial statements of WBGB for
the financial year ended 31 December 2009.
9.3
Gearings
There is no impact on the Group’s gearings.
10.
APPROVAL REQUIRED
The highest percentage ratio of the Disposal does not exceeding 25% pursuant to the Main
Market Listing Requirements of Bursa Malaysia Securities Berhad. Hence, the Disposal is not
subject to the approval of any governmental authority and/or shareholders of WBGB.
11.
DEPARTURE FROM GUIDELINES
To the best knowledge of the Board of Directors of the Company, the Disposal is not expected
to depart from the Securities Commission’s Policies and Guidelines on Issue/Offer of Securities.
12.
ESTIMATED TIME FRAME OF COMPLETION
The completion of the Disposal shall be upon execution of the Agreement and Personal
Guarantee, fulfillment of items 4.1, 4.4 and 4.5 above.
13.
DIRECTORS’ AND MAJOR SHAREHOLDERS’ INTEREST
None of the Directors or major shareholders of the Company or persons connected to them has
any interest, direct or indirect, in the Disposal.
14.
STATEMENT BY THE BOARD OF DIRECTORS
The Board, having considered all aspects of the Disposal, is of the view that it is in the best
interest of the Company.
15.
DOCUMENTS FOR INSPECTION
The Share Sale Agreement, plant and machinery valuation report and independent valuation
report on fair value are available for inspection at the Registered Office of WBGB at 5th Floor,
Wijaya International Medical Centre, No. 1, Jalan 215, Section 51, Off Jalan Templer, 46050
Petaling Jaya, Selangor Darul Ehsan during normal office hours from Mondays to Fridays
(except public holidays) for a period of 3 months from the date of this announcement.
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This announcement is dated 1 November, 2010.
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