1.
INTRODUCTION
On behalf of the Board of Directors of KOTRA (“Board”), OSK Securities Berhad (“OSK”) wishes to
announce the following proposals:-
2.
(a)
Bonus issue of up to 80,988,272 ordinary shares of RM0.50 each in KOTRA (“Bonus Shares”) on
the basis of six (6) Bonus Shares for every five (5) ordinary shares of RM0.50 each in KOTRA
(“Shares”) held at an entitlement date to be determined later (“Proposed Bonus Issue”);
(b)
Transfer of the listing of and quotation for the entire enlarged issued and paid-up share capital of
KOTRA from the MESDAQ Market to the Main Board of Bursa Securities (“Proposed Transfer”);
(c)
Increase in authorised share capital of KOTRA from RM50,000,000 comprising 100,000,000
Shares to RM100,000,000 comprising 200,000,000 Shares (“Proposed Increase in Authorised
Share Capital”); and
(d)
Amendments to the Memorandum and Articles of Association of KOTRA (“Proposed
Amendments”).
PROPOSED BONUS ISSUE
2.1
Details of the Proposed Bonus Issue
The Proposed Bonus Issue will involve a bonus issue of six (6) Bonus Shares for every five (5)
Shares held on an entitlement date to be determined later. Upon completion of the Proposed
Bonus Issue, the issued and paid-up share capital of the Company would increase up to
RM74,239,250 comprising 148,478,499 Shares.
The effects of the Proposed Bonus Issue on the Company’s issued and paid-up share capital are
set out in Table 1.
The Proposed Bonus Issue will be facilitated by the capitalisation of the reserves of KOTRA.
Based on the Company’s audited accounts for the financial year ended 30 June 2006, the amount
to be capitalised pursuant to the Proposed Bonus Issue is set out in Table 2.
The actual number of Bonus Shares to be issued and the corresponding amount to be capitalised
from the Company’s reserves will depend on the issued and paid-up share capital of the Company
as at the entitlement date of the Proposed Bonus Issue.
The Bonus Shares shall, upon allotment and issue, rank pari passu in all respects with the existing
Shares of the Company, save and except that the Bonus Shares will not be entitled to any
dividend, right, allotment and/or other distribution, the entitlement date of which precedes the date
of allotment of such Bonus Shares.
2.2
Rationale for the Proposed Bonus Issue
The Proposed Bonus Issue will facilitate the Proposed Transfer, as it will enable the Company to
meet the requirements of the Securities Commission’s (“SC”) Policies and Guidelines on
Issue/Offer of Securities (“SC Guidelines”) and the Listing Requirements of Bursa Securities
(“Listing Requirements”). The SC Guidelines and the Listing Requirements state that a company
seeking a listing on the Main Board of Bursa Securities must have a minimum issued and paid-up
share capital of not less than RM60,000,000 comprising ordinary shares with par value of at least
RM0.10 each.
The Proposed Bonus Issue will also increase the Company’s issued and paid-up share capital to a
level which would be more reflective of its current scale of operations and assets employed. The
Proposed Bonus Issue, which would enlarge the number of the Shares held by the Company’s
existing shareholders, albeit without increasing the percentage equity interest, is also expected to
improve the liquidity of KOTRA Shares on Bursa Securities.
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3.
PROPOSED TRANSFER
3.1
Details of the Proposed Transfer
Upon completion of the Proposed Increase in Authorised Share Capital and Proposed Bonus
Issue, KOTRA is expected to meet the requirements for a transfer to the Main Board of Bursa
Securities as set out in the SC Guidelines and the Listing Requirements which include, amongst
others, the following:(a)
minimum period of listing of at least one (1) year on the MESDAQ Market of Bursa
Securities;
(b)
issued and paid-up share capital of not less than RM60,000,000 comprising ordinary
shares with par value of at least RM0.10 each;
(c)
uninterrupted audited profit after tax record of three (3) to five (5) full financial years, with
an aggregate audited profit of not less than RM30 million over the said financial years and
an audited after-tax profit of not less than RM8 million in respect of the most recent
financial year; and
(d)
public shareholding spread of at least 25% of the issued and paid-up share capital is in the
hands of a minimum of 1,000 public shareholders holding not less than 100 shares.
KOTRA was listed on the MESDAQ Market of Bursa Securities on 30 October 2000. Upon
completion of the Proposed Bonus Issue, the issued and paid-up share capital of the Company will
increase to at least RM61,866,042 comprising 123,732,083 Shares. The KOTRA Group achieved
an audited consolidated profit after tax (“PAT”) of RM36.515 million over the past five (5) financial
years ended 30 June 2006 and an audited consolidated PAT of RM9.987 million in respect of the
financial year ended 30 June 2006. Based on the Record of Depositors, as at 20 September 2006,
approximately 33.57% of the issued and paid-up share capital of the Company is held by 1,111
public shareholders holding not less than 100 Shares each.
Consequently, the Company proposes to transfer the listing of and quotation for the entire issued
and paid-up share capital of KOTRA from the MESDAQ Market to the Main Board of Bursa
Securities.
3.2
Rationale for the Proposed Transfer
When completed, the Proposed Transfer will better reflect the current stature of operations of the
KOTRA Group and will give the Group greater recognition and acceptance amongst investors.
The Proposed Transfer is also expected to enhance the Group’s prestige and reputation as well as
the confidence of its customers, suppliers, bankers, employees and shareholders in the Group.
Furthermore, as the Group is currently expanding its presence in the overseas markets, a listing
on the Main Board of Bursa Securities would accord greater recognition and acceptance to the
KOTRA Group among its foreign customers and business partners.
4.
PROPOSED INCREASE IN AUTHORISED SHARE CAPITAL
4.1
Details of the Proposed Increase in Authorised Share Capital
The Company’s present authorised share capital is RM50,000,000 comprising 100,000,000
Shares. The Proposed Increase in Authorised Share Capital will increase the authorised share
capital of the Company to RM100,000,000 comprising 200,000,000 Shares.
4.2
Rationale for the Proposed Increase in Authorised Share Capital
The Proposed Increase in Authorised Share Capital will accommodate the issuance of new Shares
pursuant to the Proposed Bonus Issue as well as subsequent issues.
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5.
PROPOSED AMENDMENTS
5.1
Details of the Proposed Amendments
The Proposed Amendments involve the amendments to the Memorandum of Association of
KOTRA pursuant to the Proposed Increase in Authorised Share Capital, as well as the adoption of
new Articles of Association in connection with the Proposed Transfer.
(a)
Amendment to the Memorandum of Association
As a result of the Proposed Increase in Authorised Share Capital, Clause 5 of the
Memorandum of Association of KOTRA will be amended as follows:Existing provision
“The capital of the Company is RM50,000,000-00 divided into 100,000,000 ordinary
shares of RM0.50 each. The shares in the original or any increased capital may be divided
into several classes and there may be attached thereto respectively any preferential,
deferred or other special rights, privileges or restrictions as to dividends, capital, voting or
otherwise.”
Proposed amended provision
“The capital of the Company is Ringgit Malaysia One Hundred Million (RM100,000,000-00)
divided into Two Hundred Million (200,000,000) ordinary shares of Fifty Sen (RM0.50)
each. The shares in the original or any increased capital may be divided into several
classes and there may be attached thereto respectively any preferential, deferred or other
special rights, privileges, conditions or restrictions as to dividends, capital, voting or
otherwise.”
(b)
Adoption of new Articles of Association
In conjunction with the Proposed Transfer, KOTRA proposes to adopt a new Articles of
Association to be compliant with the Listing Requirements.
5.2
Rationale for the Proposed Amendments
The Proposed Amendments are necessary to give effect to the Proposed Increase in Authorised
Share Capital, and thereafter the Proposed Bonus Issue and the Proposed Transfer.
6.
EFFECTS OF THE PROPOSALS
The Proposed Increase in Authorised Share Capital, Proposed Amendments and the Proposed Transfer
will not have any effect on the issued and paid-up share capital, major shareholders, the net tangible
assets (“NTA”), the net assets (“NA”), the gearing level, the earnings, and the dividends of the Group.
The effects of the Proposed Bonus Issue are shown under two (2) scenarios:
Minimum Scenario
Illustrates the effects of the Proposed Bonus Issue assuming that no ESOS Options are exercised.

Maximum Scenario
Illustrates the effects of the Proposed Bonus Issue assuming that all ESOS Options are fully
granted and exercised and that the resulting 11,248,371 ESOS Shares are issued before the
entitlement date of the Proposed Bonus Issue.
6.1
Share Capital
The effects of the Proposed Bonus Issue on the issued and paid-up share capital of the Company
are set out in Table 1.
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6.2
Major Shareholders
The Proposed Bonus Issue will not have any effect on the major shareholders’ percentage
shareholdings in the Company, as the Bonus Shares will be allotted on a pro-rata basis to all
shareholders of the Company.
The effects of the Proposed Bonus Issue on the major shareholders’ shareholdings (number of
shares held) in the Company are set out in Table 3.
6.3
NA, NTA and Gearing
The effects of the Proposed Bonus Issue on the NA, NTA and gearing level of the Group, are set
out in Table 4.
6.4
Earnings
The Proposed Bonus Issue will not have any effect on the earnings of the Group. However the
Proposed Bonus Issue will increase the number of outstanding Shares in the Company which will
correspondingly reduce the earnings per share of the Company.
6.5
Dividends
The Proposed Bonus Issue is not expected to have any impact on the policy of the Board of
KOTRA in recommending dividends, if any, to shareholders of KOTRA.
7.
INTER-CONDITIONALITY
Save as disclosed below, there is no other inter-conditionality amongst the Proposals:-
8.
(a)
The Proposed Increase in Authorised Share Capital is conditional upon the Proposed
Amendments;
(b)
The Proposed Bonus Issue is conditional upon the Proposed Increase in Authorised Share Capital;
and
(c)
The Proposed Transfer is conditional upon the Proposed Bonus Issue.
APPROVALS REQUIRED
The Proposals are subject to and conditional upon approvals being obtained from the following:(a)
The SC, for the Proposed Transfer;
(b)
The SC, on behalf of the Foreign Investment Committee (“FIC”), for the equity structure of KOTRA
pursuant to the Proposed Transfer;
(c)
The Ministry of International Trade and Industry (“MITI”), for the equity structure of KOTRA
pursuant to the Proposed Transfer;
(d)
Bursa Securities, for:i.
the Proposed Bonus Issue and the listing of and quotation for the Bonus Shares; and
ii.
the Proposed Transfer;
(e)
The shareholders of KOTRA, at an extraordinary general meeting to be convened for the
Proposed Bonus Issue, Proposed Increase in Authorised Share Capital and Proposed
Amendments; and
(f)
Any other relevant regulatory authority, where applicable.
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9.
INTERESTS OF DIRECTORS, MAJOR SHAREHOLDERS AND/OR PERSONS CONNECTED
None of the Directors, major shareholders of KOTRA and/or persons connected to them, as defined in the
Listing Requirements, has any interest, direct or indirect, in the Proposals other than that derived as
shareholders of KOTRA pursuant to the Proposed Bonus Issue.
10.
DIRECTORS’ RECOMMENDATION
The Board, having considered all aspects of the Proposals, is of the opinion that the Proposals are in the
best interest of the Company.
11.
APPLICATION TO THE AUTHORITIES
Barring unforeseen circumstances, the Board expects to submit the application to the SC, FIC, MITI and
Bursa Securities in relation to the Proposals within six (6) months from the date of this announcement.
12.
ADVISER
OSK has been appointed by the Company to act as the Adviser for the Proposals.
This announcement is dated 9 October 2006.
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