Type
: Announcement
Subject
: STEMLIFE BERHAD (“SLB” OR THE “COMPANY”)
ACQUISITION OF BALANCE 18,500,000 ORDINARY SHARES OF
RM0.10 EACH FULLY PAID IN STEMLIFE THERAPEUTICS SDN BHD
(“ST”) (“SALE SHARES”), REPRESENTING THE REMAINING
27.01% OF THE TOTAL ISSUED AND PAID-UP SHARE CAPITAL OF
ST NOT ALREADY OWNED BY SLB FOR A TOTAL
CONSIDERATION OF RM1,850,000 (“ACQUISITION”)
Contents
1.
:
INTRODUCTION
The Board of Directors of SLB (“Board”) is pleased to announce that the
Company had on 20 December 2010 acquired from DSI Corporation Sdn Bhd,
Kow Shih Pei, See Tuck Yan, Lim Mui Lan, Hoe Lu Lu, Bernadette Chew Cay-Ly
(collectively, the “Vendors”) an aggregate of 18,500,000 Ordinary shares of
RM0.10 each fully paid in ST, representing the remaining 27.01% of the total
issued and paid-up share capital of ST not already owned by SLB, for an
aggregate cash consideration of RM1,850,000 or RM0.10 per share (“Purchase
Consideration”).
Currently, SLB holds 72.99% equity shares in ST.
Upon completion of the Acquisition, ST will become a 100% wholly-owned
subsidiary of SLB. Set out in the ensuing paragraphs are the detailed information
in respect of the Acquisition.
2.
DETAILS OF THE ACQUISITION
On 20 December 2010 SLB has acquired a total of 18,500,000 Ordinary shares
of par value of RM0.10 each in ST (“Sale Shares”), representing the remaining
27.01% of the total issued and paid-up share capital of ST, from the Vendors in
the proportion as shown in the table below for a total cash consideration of
RM1,850,000.00 or RM0.10 per Sale Share (“Purchase Consideration”) :-
Vendors
Number of
Sale
Shares
% of Issued
Purchase
and Paid-Up Consideration
Share Capital
(RM)
of ST
1. DSI Corporation Sdn Bhd*(1)
12,500,000
18.25
1,250,000
2. Kow Shih Pei (f)
2,000,000
2.92
200,000
3. See Tuck Yan
2,000,000
2.92
200,000
4. Lim Mui Lan (f) *(2)
1,000,000
1.46
100,000
5. Hoe Lu Lu (f)
500,000
0.73
50,000
6. Bernadette Chew Cay-Ly (f)
500,000
0.73
50,000
18,500,000
27.01
RM 1,850,000
Total
Note:*Deemed Related Party to the Transaction
*(1)
The acquisition of the Sale Shares held by DSI Corporation Sdn Bhd is
deemed a related party transaction by virtue of Tan Sri Dr Aseh bin Che
Mat, the Non-Executive Chairman of SLB and Tan Sri Dr Aseh bin Che
Mat is a major shareholder of DSI Corporation Sdn Bhd; and
*(2)
Lim Mui Lan being the sister of Dato’ Lim Oi Wah and Lim Jit Soon, who
are the Executive Directors of SLB. Dato’ Lim Oi Wah is also a substantial
shareholder of SLB.
Pursuant to Section 10.08 (1), Part E of Chapter 10 of the Bursa Malaysia
Securities Berhad’s (“Bursa Securities”) ACE Market Listing Requirements
(“AMLR”), the percentage ratio pertaining to the Related Party Transactions
exceed 0.25% but are less than 5%. In compliance with the AMLR, SLB is
required to make an announcement to Bursa Securities in relation to the Related
Party Transactions but is not required to seek shareholders’ approval and/or
appoint an independent adviser in respect of the Related Party Transactions.
2.1
INFORMATION ON ST
ST was incorporated in Malaysia on 10 May 2005 under the Companies
Act, 1965 as a private limited company under the name of Cell Therapy
Innovation Sdn. Bhd., which was subsequently changed to its present
name on 27 March 2007. The authorized share capital of ST is
RM10,000,000 comprising 100,000,000 Ordinary shares of par value of
RM0.10 each, of which 68,500,000 have been issued and credited as
fully paid-up.
ST is principally involved in stem cells therapeutics transplant and
consultancy services and testing, processing and preservation of
peripheral blood stem cells.
For the financial year ended (“FYE”) 31 December 2009, ST registered
an audited loss after taxation of RM786,130 on the back of RM831,027 in
revenue. ST also registered audited net assets and net tangible assets of
RM6,212,332 and RM6,212,332 respectively as at 31 December 2009.
ST’s wholly-owned subsidiary, Stemvet Sdn Bhd, incorporated in
Malaysia is a dormant company.
2.2
Basis of arriving at the Purchase Consideration
The Purchase Consideration was arrived at on a willing buyer-willing
seller basis after taking into consideration the following:
(i)
(ii)
the audited net assets of RM6,212,332 or RM0.09 per share based
on ST’s latest available audited financial statements as at 31
December 2009, which translates to a price to book multiple of
approximately 1.11 times from the Purchase Consideration; and
the earnings potential of ST.
The purchase price of RM0.10 per Sale Share is in line with the
Company’s intention to acquire the remaining shares not already owned
by SLB in ST for a consideration of not more than RM0.10 per ST share
to be a wholly-owned subsidiary of SLB.
2.3
Source of Funding for the Purchase Consideration
The Purchase Consideration will be funded solely from internally
generated funds of the Company.
2.4
Liabilities to be Assumed
Save for the liabilities of ST incurred in the ordinary course of business,
there are no liabilities to be assumed by SLB arising from the Acquisition.
2.5
Original Cost and Date of Investment
The original cost of investment of the Vendors in ST and the dates such
investments were made are set out in the table below:-
Vendors
3.
Date of
Investment
Number of
ST Shares
Cost of
Investment
(RM)
DSI Corporation Sdn Bhd
25.4.2008
12,500,000
1,250,000
Kow Shih Pei
23.9.2008
2,000,000
200,000
See Tuck Yan
23.9.2008
2,000,000
200,000
Lim Mui Lan
23.9.2008
1,000,000
100,000
Hoe Lu Lu
23.9.2008
500,000
50,000
Bernadette Chew Cay-Ly
23.9.2008
500,000
50,000
SALIENT TERMS OF THE ACQUISITION
The salient terms and conditions of the acquisition are set out below:(i)
The parties mutually agree that the obligation to pay the Purchase
Consideration shall be on a date which the parties may mutually agree in
writing (the “Prescribed Date”), provided always that such Prescribed
Date shall be notified to either party at least 7 days before the actual
Prescribed Date.
(ii)
the parties mutually agree that the failure of payment of the Purchase
Consideration by the Prescribed Date shall not constitute a breach of the
terms of the acquisition, provided always that another date has been
already determined and agreed to by the parties, as well as each party
hereto already notified at least 7 days of such date, for the payment of the
Purchase Price.
4.
RATIONALE FOR THE ACQUISITION
It is the intention of SLB to acquire the remaining 27.01% interests in ST not
already owned by SLB from the remaining shareholders of ST upon completion
of the acquisition, such that ST will be a wholly-owned subsidiary of SLB.
The Acquisition will allow SLB to have full control and set the direction of the
business of ST which is complementary to SLB with both companies operating in
the stem cells industry.
5.
RISK FACTORS
As ST is currently an operating subsidiary of SLB, the Board does not foresee
any additional risk that SLB is not already exposed to pertaining to the increase
in its shareholdings in ST in relation to the Acquisition.
6.
EFFECTS OF THE ACQUISITION
6.1
Share Capital and substantial shareholder
The Acquisition has no effect on the issued and paid-up share capital of
SLB and the Company’s substantial shareholders’ shareholdings as the
Purchase Consideration is settled wholly in cash.
6.2
Earnings
The Acquisition will have no material effect on the earnings of SLB as the
earnings of ST have already been consolidated into SLB’s financial
results.
6.3
Net assets and gearing
The Acquisition will have no material effect on SLB’s consolidated net
assets and gearing.
7.
APPROVALS REQUIRED
The Acquisition is not subject to the approval of shareholders and the relevant
government authorities.
8.
DIRECTORS’ AND MAJOR SHAREHOLDERS’ INTEREST
The following Directors of SLB do not consider themselves independent in
respect of the Related Party Transactions by virtue of the following:(i)
Dato’ Lim Oi Wah is the Deputy Managing Director and major shareholder
of SLB and is the sister of Lim Mui Lan, one of the Vendors of the
Acquisition; and
(ii)
Mr. Lim Jit Soon is the Chief Financial Officer and Executive Director of
SLB is the brother of Lim Mui Lan, one of the Vendors of the Acquisition;
and
(iii)
Tan Sri Dr Aseh Bin Che Mat is the Non-Executive Chairman of SLB and
is the major shareholder and director of DSI Corporation Sdn Bhd, one of
the Vendors of the Acquisition.
(collectively referred to as the “Interested Directors”)
The interests, direct and indirect, of the Interested Directors in SLB as at the date
of this announcement are set out below:-
Interests of
Interested
Director
Direct
Indirect
No. of SLB Shares
%
No. of SLB Shares
%
Dato’ Lim Oi Wah
18,465,200
11.19
-
-
Mr. Lim Jit Soon
2,855,120
1.73
-
-
-
-
-
-
Tan Sri Dr Aseh Bin
Che Mat
Save as disclosed above, none of the Directors, major shareholders of SLB
and/or persons connected to them has any interest, direct or indirect, in the
Acquisition.
9.
DIRECTORS’ OPINION
The Directors of SLB, save for the Interested Directors, having considered all
aspects of the Acquisition including its rationale, are of the opinion that the
Acquisition is in the best interest of the Company and its shareholders.
10.
HIGHEST PERCENTAGE RATIO APPLICABLE TO THE ACQUISITION
PURSUANT TO PARAGRAPH 10.02(G) OF THE AMLR
The highest percentage ratio applicable to the Acquisition pursuant to Paragraph
10.02 (g) of the AMLR is 5.29%, of which 3.86% is under the Related Party
Transaction while the balance is 1.43% is under the non-related party.
11.
STATEMENT ON DEPARTURE FROM SC’S GUIDELINES ON EQUITY AND
EQUITY LINKED SECURITIES (“SC GUIDELINES”)
The Acquisition does not fall under the ambit of the SC Guidelines and to the
best of the Board’s knowledge, the Acquisition has not departed from the SC
Guidelines.
12.
ESTIMATED TIME FRAME FOR COMPLETION
The Acquisition was completed on 20th December 2010.