General Announcement
Reference No. CP-130731-30590
Permaju Industries Berhad (“Permaju”)
Agreement to Lease and Lease Agreement
entered into by a 70%-owned subsidiary company, Hardie Development Sdn Bhd
(as the Lessor) and Mydin Mohamed Holdings Bhd (as the Lessee)
1.
INTRODUCTION
The Board of Directors of Permaju Industries Berhad ("Permaju") wishes to
announce that its 70%-owned subsidiary company, Hardie Development
Sdn Bhd (Company No. 274167-M) (“the Lessor"/ “Hardie”), has on 31 July
2013 entered into an Agreement to Lease (“the Agreement to Lease”) as
the Lessor on the one part with Mydin Mohamed Holdings Bhd (Company
No. 221448-A), a company incorporated in Malaysia and having its
registered address at Unit B3-10, Block B, Plaza Dwitasik, No. 21, Jalan
5/106, Bandar Sri Permaisuri, 56000 Kuala Lumpur (“the Lessee”/”Mydin”)
on the other part whereby the Lessor shall at its own course and expense
construct and complete the hypermarket including the Car Park and the
related infrastructure in accordance with the Layout and Construction
Drawings and the Specifications (“the Demised Premises”) situated at the
Locality of Menggatal, District of Kota Kinabalu, Sabah (“the said Land”) for
the purpose of the Lessee’s establishment of its hypermarket and retail
business thereat.
The Lessor and the Lessee have already executed a Lease Agreement
(“the Lease Agreement”) whereby the Lessor grants and the Lessee
accepts a Lease of the Demised Premises for a fixed period of 20 years
commencing from the date of the Lease Agreement (“the Term”). The
Lease Agreement which is held in escrow by Lessor’s Solicitors shall be
dated and come into effect when the following conditions precedent are
met (“Lease Commencement Date”):
(i)
Building approvals and financing cut-off date in respect of the
requisite layout, building and construction approvals, consent and
permits of/by relevant authorities under the Town and Country
Planning Act 1976, Development Order and Building Plan Approval
for the construction of the Demised Premises are to be obtained by
the Lessor within nine (9) months from the date of the Agreement
to Lease (“the Approval Date”);
(ii)
The Lease Conditions Cut-off Date to be fulfilled by the Lessor is
within twenty four (24) months from the Approval Date or upon the
expiry thereof, such longer period as the parties may mutually
agree in writing for the Lessor to fulfill and satisfy the following
Lease Conditions:
(a)
The Lessor is to apply and obtain a separate title deed duly
endorsed in favour of the Lessor as the registered owner of
the Land and without any title conditions or restrictions in
interest that will or may prevent or restrict the Lessee from
establishing and/or operating its hypermarket and retail
business at the said Land;
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2.
(b)
The Demised Premises is constructed and completed by the
Lessor in conformity and in accordance with the Layout and
Construction drawings and the specification is ready for use
as certified by the Principal Consultant and verified and
confirmed by the Lessee’s Architect/Consultant pursuant to
a joint inspection exercise;
(c)
The Certificate of Fitness for Occupation or the Certificate of
Compliance and Completion or the Occupation Permit for
the Demised Premises is issued by the Project Consultant
with the requisite approval and clearance, if any, of the
Appropriate Authority for the occupation of the Demised
Premises and the vacant possession of the Demised
Premises is delivered and handed over by the Lessor to the
Lessee;
(d)
The Lessor is to apply and obtain the State Consent and
having delivered the original copy of the consent to the
Lessee’s solicitors;
(e)
If required, the Lessor having obtained the approval of the
Shareholders of the Lessor;
(f)
If required, the Lessor having applied for and obtained the
consents and approvals from all relevant authorities
(including Bursa Malaysia Securities Berhad, if applicable)
and such consents and approvals remaining in full force and
effect immediately prior to the date on which the Lease
Conditions shall have been duly fulfilled and satisfied.
However, if any consent or approval obtained by the Lessor
shall lapse or be withdrawn by the relevant authority prior to
the fulfillment of the other Lease Conditions, then the Lessor
shall apply to extend such consent or approval or for a fresh
consent or approval, and in the event an extended or fresh
consent or approval is not obtained or is pending at the
expiry of the Lease Conditions Cut-Off Date, then such
consent or approval shall be deemed as not obtained and
this Agreement is terminated.
INFORMATION ON HARDIE
Hardie was incorporated on 1 August 1994 as a private limited company
under the Companies Act, 1965. It has an authorised share capital of
RM5,000,000/- comprising 5,000,000 ordinary shares of RM1.00 each, of
which 2,000,000 ordinary shares of RM1.00 each have been issued and
fully paid up. Hardie is currently in the property development business.
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3.
INFORMATION ON MYDIN
Mydin Mohamed Holdings Sdn Bhd was incorporated on 23 July 1991 as,
a private limited company under the Companies Act, 1965 and
subsequently converted into an unlisted public company with the new
name Mydin Mohamed Holdings Bhd on 23 August 2001. It has an
authorised share capital of RM100 million comprising 100 million ordinary
shares of RM1.00 each, of which 69.8 million ordinary shares of RM1.00
each have been issued and fully paid up. The principal activity of Mydin is
that of operator of hypermarkets, supermarkets, emporium, franchising,
wholesale business and shopping mall management.
4.
SALIENT TERMS OF THE AGREEMENT TO LEASE
4.1
The salient terms of the Agreement to Lease are as follows:(1) The Lessor shall at its own cost and expense, obtain its financing, to
construct and complete the Demised Premises in accordance with the
Layout and Construction Drawings and Specifications.
(2) Subject to the completion of the Demised Premises, the Lessor shall
grant to the Lessee and the Lessee shall accept a sub-lease of the
Demised Premises upon and subject to the provisions, terms and
conditions contained in the Agreement to Lease.
5.
SALIENT TERMS OF THE LEASE AGREEMENT
5.1
The salient terms of the Lease Agreement are as follows:(1) The Lease shall be for a period of twenty (20) years commencing from
the Lease Commencement Date which is approximately thirty three (33)
months from the Agreement to Lease Date or any date as mutually agreed
by the Lessor and the Lessee. The Lessee acknowledges that save as
provided in the Lease Agreement or with the written consent of the Lessor,
the Lessee may not terminate or be entitled to terminate the lease prior to
the expiry of the Term.
(2) The monthly rental payable by the Lessee to the Lessor during the first
year of the Lease is estimated to be Ringgit Malaysia One Million Five
Hundred and Sixteen Thousand (RM1,516,000/-) only, which is based on
the estimated Final Development Costs.
(3) The rental shall be reviewed annually.
6.
RATIONALE
The construction and lease of the said Hypermarket will improve and
enhance the overall feasibility of the future developments as an integrated
township.
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7.
PROSPECTS
The presence of a hypermarket will definitely enhance the overall value of
Hardie’s on-going and future development. It will also provide a stable
recurring revenue and increasing earnings stream to the Permaju Group
(“PIB Group”) and may also provide capital gains should Hardie wish to
dispose of the asset in future.
8.
FUNDING
The financing of the construction of the Hypermarket on the said Land will
be partly through internally generated funds and partly by bank
borrowings.
9.
FINANCIAL EFFECTS
9.1
Share capital and Substantial Shareholders’ Shareholdings
The Agreement to Lease and the Lease Agreement will not have any
effect on the share capital and Substantial Shareholders’ Shareholdings of
PIB Group.
9.2
Net Assets (“NA”) per share
The Agreement to Lease and the Lease Agreement will not have any
material effect on the net assets per share of PIB Group.
9.3
Earnings per share
The rental income is expected to contribute positively to PIB Group’s future
earnings.
9.4
Gearing
The effect of the Agreement to Lease and the Lease Agreement on the
gearing of the PIB Group can only be ascertained after the details of the
borrowings is finalised.
10.
RISK FACTORS
Any delay in the construction of the Hypermarket due to unforeseen
circumstances may cause Hardie to incur additional finance cost.
11.
ESTIMATED TIME FRAME
Barring any unforeseen circumstances, the construction of
hypermarket is expected to be completed in thirty three (33) months.
12.
the
APPROVAL REQUIRED
The Agreement to Lease and the Lease Agreement are not subject to the
approval of the shareholders of Permaju.
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13.
DIRECTORS' AND MAJOR SHAREHOLDERS' INTERESTS
None of the Directors and/or major shareholders of Permaju and/or
persons connected to them have any interest, direct or indirect, in the
Agreements.
14.
STATEMENT BY THE BOARD OF DIRECTORS
The Board of Directors of Permaju is of the opinion that the Agreement to
Lease and the Lease Agreement are in the best interests of PIB Group.
15.
DOCUMENT AVAILABLE FOR INSPECTION
The following document will be made available for inspection at the
registered office of the Company at 5th Floor Bangunan Indahsabah,
Segama Commercial Complex, 88000 Kota Kinabalu, Sabah, following the
date of the announcement for a period of three (3) months from Monday to
Friday (except public holidays) during normal business hours:(i)
Agreement to Lease dated 31 July 2013 entered into between Hardie and
Mydin.
This announcement is dated 31 July 2013.
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