FABER GROUP BERHAD (“FGB” OR “COMPANY”)
Proposed revision to certain terms of the redeemable secured loan stocks (“RSLS”)
issued by FGB pursuant to the Trust Deed dated 17 September 2004 entered into between
FGB and Universal Trustee (Malaysia) Berhad (“Proposed Revision”).
1.
INTRODUCTION
On behalf of the Board of Directors of FGB (“Board”), Aseambankers Malaysia Berhad
(“Aseambankers”) is pleased to announce that the Company is proposing to revise
certain terms of the Company’s existing RSLS issued pursuant to a restructuring exercise
to regularise the Company’s financial position in 2004 (“Restructuring”).
Pursuant to the RSLS trust deed dated 17 September 2004 entered into between FGB
and Universal Trustee (Malaysia) Berhad (“Trustee”), the Company had on 30 September
2004 issued a total of RM185,528,000 nominal value of RSLS to Jeram Bintang Sdn Bhd
(“JBSB”). The RM185,528,000 RSLS comprise the principal amount of the
RM135,564,000 nominal value of RSLS together with 4% coupon rate compounded
annually up to maturity amounting to approximately RM49,964,000 nominal value
payable in the form of RSLS. As at the date of this announcement, the total RSLS
outstanding is at RM158,591,000.
On 27 May 2004, the Securities Commission (“SC”) approved the Restructuring, with the
condition, amongst others, to obtain the approval of the SC for any changes to the terms
and conditions of the RSLS.
2.
DETAILS OF THE PROPOSED REVISION
FGB is proposing the following revision to the terms of the RSLS:(a)
to allow the coupon payment to be in the form of cash payable annually in
arrears at each anniversary date from the years 2009 to 2012, on such nominal
amount of the RSLS for the time being outstanding. In the event, for any
reason(s) whatsoever, FGB is unable to pay, fully or partially, the coupon
payment in cash on the anniversary date, all of the coupon payment due and
payable but not paid in cash shall be capitalised into new RSLS.
(b)
to allow that in the event that the partial redemption is made before the
anniversary date of the RSLS, the accreted value of the 4% coupon per annum
up to the proposed early redemption date will be added to the outstanding RSLS
as of the last anniversary date or such early redemption date, whichever is the
later, and such early redemption amounts will be used firstly to reduce the
outstanding coupon and thereafter the principal outstanding RSLS. The coupon
payment payable on the next anniversary date would then be adjusted to exclude
the earlier coupon payment made.
However, no redemption will be carried out unless it is sufficient to pay the
outstanding coupon accrued from the last anniversary date or the date of that last
early redemption payment, as the case may be, up to the proposed early
redemption date and 14 days notice of such intention is given to JBSB and the
Trustee.
FGB has obtained the consent from the existing holders of bonds issued by FGB (“Bond
Holders”), JBSB and the Trustee for the Proposed Revision.
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For illustration purposes only, set down below the calculation for the coupon payment for
the next two (2) financial years ending (“FYE”) 31 December 2009 and 2010 with the
assumption that the Company shall redeem RM5,000,000 RSLS on 1 April 2009, 1
October 2009, 1 April 2010 and 1 October 2010 respectively:Date
30/09/08
31/03/09
01/04/09
30/09/09
01/10/09
31/03/10
01/04/10
30/09/10
01/10/10
Existing
calculation for
coupon payment
RM’000
158,591
158,591
6,344
164,935
164,935
6,597
171,532
Calculation for coupon
payment pursuant to
the Proposed Revision
RM’000
158,591
3,172
(5,000)
156,763
3,135
(5,000)
154,898
3,098
(5,000)
152,996
3,060
(5,000)
151,056
Remarks
Total RSLS outstanding
Coupon due for 6 months
Repayment
Coupon due for 6 months
Repayment
Coupon due for 6 months
Repayment
Coupon due for 6 months
Repayment
There will be interest saving annually from FYE 31 December 2009 to FYE 31 December
2012, being the final anniversary of the RSLS, in the event the Company redeems part of
the RSLS earlier than the maturity date. Based on the illustration above, the interest
saving for FYE 31 December 2009 and 2010 is approximately RM37,000 and RM439,000
respectively.
In the Trust Deed, the total coupon payable has been determined. Pursuant to the
Proposed Revision, the RSLS shall bear coupon on such nominal amount of the RSLS
for the time being outstanding.
3.
RATIONALE OF THE PROPOSED REVISION
The Company wishes to redeem part of the RSLS earlier than the maturity date when its
cash flows allow for such early redemption. In this regard, the coupon payment would
have to be recalculated and hence the schedule for the coupon payment as provided in
the Trust Deed is no longer applicable. Further, the Proposed Revision will consequently
allow the Company to manage its cash flow in a more efficient manner.
The Company would also like to have the option to pay the coupon payment in the form
of cash instead of only in RSLS since the intention of the Company is to redeem the
RSLS earlier than the maturity date and to reduce, to the extent possible, the total RSLS
outstanding for interest savings.
4.
EFFECTS OF THE PROPOSED REVISION
The Proposed Revision will not have any effect on the issued and paid-up share capital,
dividend policy and major shareholders’ shareholdings of the Company and is not
expected to have any material effects on the net assets, earnings and gearing of the FGB
Group for the FYE 31 December 2009.
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5.
APPROVALS REQUIRED
The Proposed Revision is subject to the following approvals being obtained:(a)
the Bond Holders and JBSB, being the RSLS holder, for which FGB has obtained
their consents;
(b)
the Trustee, for which FGB has obtained its consent; and
(c)
the SC.
An application will be made to the SC within one (1) month from the date of this
announcement.
6.
DIRECTORS' AND MAJOR SHAREHOLDERS' INTERESTS
Save as disclosed below, none of the other Directors or major shareholders of FGB or
persons connected to the Directors or major shareholders of FGB have any interest,
direct or indirect, in the Proposed Revision:JBSB has indirect shareholdings in FGB of 85,000,000 shares which represent
approximately 23.42% interest in FGB as at 31 December 2008. JBSB also holds
158,591,000 RSLS which represent the total existing RSLS as at 31 December 2008.
7.
DIRECTORS’ OPINION
The Board, having considered all aspects of the Proposed Revision and after careful
deliberation, is of the opinion that the Proposed Revision is in the best interest of FGB.
This announcement is dated 8 January 2009.
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