News

Proposed disposal Of ASB's And Umg's Indirect Interests In Perdana Finance Berhad ("PFB") To Southern Bank Berhad ("SBB") For Cash ("Proposed Disposal Of ("PFB")

BackJun 27, 2000
General Announcement
Reference No MM-000627-61746
Submitting Merchant Bank : PERDANA MERCHANT BANKERS BERHAD
Company Name : ADVANCE SYNERGY BERHAD 
Stock Name : ASB
Date Announced : 27/06/2000

Type : Announcement
Subject : PROPOSED DISPOSAL OF ASB's AND UMG's INDIRECT INTERESTS IN PERDANA FINANCE BERHAD ("PFB") TO SOUTHERN BANK BERHAD ("SBB") FOR CASH ("PROPOSED DISPOSAL OF ("PFB")

Contents :

1.0 INTRODUCTION

Perdana Merchant Bankers Berhad ("PMBB") is pleased to announce on behalf of the Board of Directors of ASB and UMG that on 27 June 2000, PMBB, a 70.1% owned subsidiary of UMG had entered into a conditional sale of shares agreement ("PFB SSA") with SBB for the sale of PMBB's entire equity interests in PFB. PFB is an 88 percent held subsidiary of PMBB. The remaining 12 percent equity interest is held by Koperasi Pegawai-Pegawai Melayu Malaysia Berhad ("Koperasi"). UMG is a 50.75%-owned subsidiary of ASB.

Further details of the Proposed Disposal of PFB is outlined below.


2.0 DETAILS OF THE PROPOSED DISPOSAL OF PFB

2.1 Information on the Proposed Disposal of PFB and Salient Terms of the SSA

PMBB currently holds an aggregate of 26,400,000 ordinary shares of RM1.00 each in PFB representing 88% equity interest in PFB. In line with the merger programme initiated by BNM, both PMBB and Koperasi propose to divest their collective entire equity interests in PFB to SBB.

Amongst some of the principal terms and conditions of the PFB SSA for the Proposed Disposal of PFB are as follows:-

The PFB shares are to be disposed free from all claims, charges, equities, liens, pledges, trust and other encumbrances and with all rights, benefits and entitlements attaching thereto including without limitation, all dividends and distributions declared from the last day of the month preceding the completion date which falls on a date not later than seven (7) business days after the fulfilment of the conditions precedent as set out section 5.0 below. ("PFB SSA Completion Date")



Consideration

The consideration is payable wholly by cash and is equivalent to one point two (1.2) times the net tangible assets ("NTA") of PFB to be determined by a firm of public accountants namely Messrs Kassim Chan & Co ("the Designated Auditors").

The NTA of PFB will be based on the last day of the month immediately preceding the completion date of the SSA ("Completion Accounts Date of PFB") after adjustments made in the manner set out in the SSA ("Completion NTA of PFB").

The formula set out in the SSA to be used to determine the Completion NTA of PFB includes adjustments for general provisions and revaluation of loan assets and other tangible and intangible assets.

For illustrative purposes, should the completion of the PFB SSA fall on 23 July 2000, the purchase consideration for PFB would be determined at 1.2 times the Completion NTA of PFB as at 30 June 2000.

For the purposes of execution of the PFB SSA, a provisional consideration has been set at RM23.034 million which is based on 1.2 times of the unaudited NTA of PFB as at 30 June 1999 ("Provisional Consideration of PFB").
Completion Audit

On PFB SSA Completion Date, the Designated Auditors shall commence a verification exercise on the accounts of PFB up to Completion Accounts Date of PFB to determine the Completion NTA of PFB. In the event of any disagreement with regard to the loan assets valued as part of the Completion NTA of PFB, PMBB's nominees (to be named later) shall have the option to purchase the abovesaid disputed loan asset at its net book value.

Terms of payment

The consideration for PFB is payable fully in cash in proportion with the ratio of the respective equity interest held by PMBB and Koperasi in PFB in the following manner:-
1. A deposit of RM2,303,400 representing 10% of the Provisional Consideration of PFB is to be paid to a stakeholder upon the execution of the PFB SSA;
 
2. The remaining balance of RM20,730,600 representing 90% of the Provisional Consideration of PFB is to be paid on PFB SSA Completion Date;
 
3. Should the final consideration (as calculated based on 1.2 times the Completion NTA of PFB) ("Actual Consideration of PFB") exceed the Provisional Consideration of PFB, the difference is payable in cash by SBB to PMBB and Koperasi, with interests calculated three (3) months from the PFB SSA Completion Date up to the date of receipt by PMBB and Koperasi of the difference; and
 
4. Conversely, should the Actual Consideration of PFB be lower than the Provisional Consideration of PFB, the difference is refundable in cash by PMBB and/or Koperasi to SBB, with interests calculated three (3) months from the PFB SSA Completion Date up to the date of receipt by SBB of the difference.


2.1.2 Basis of the Sale Consideration

The sale consideration is to be calculated at a premium of 20% above the Completion NTA of PFB.

The method of determination of the sale consideration for the Proposed Disposal of PFB was negotiated on a willing buyer-willing seller basis after taking into consideration the underlying NTA of PFB.

3.0 BACKGROUND INFORMATION ON PFB

PFB was incorporated in Malaysia on 22 February 1975 as a public company as Pertama Malaysia Finance Berhad under the Companies Act 1965. It assumed its present name on 22 November 1993.

The authorised share capital of PFB is 100,000,000 ordinary shares of RM1.00 each of which 30,000,000 ordinary shares of RM1.00 each have been issued and fully paid-up.

PFB is principally engaged in the business of a licensed finance company that provides housing loans, hire purchase, corporate loans, leasing and deposit-takings.

As at 31 December 1999, there were 10 branches in Peninsular Malaysia.


4.0 RATIONALE OF THE PROPOSED DISPOSAL OF PFB

The Proposed Disposal of PFB is in line with the recent merger programme by BNM of financial institutions in Malaysia.


5.0 CONDITIONS OF THE PROPOSED DISPOSAL OF PFB

The Proposed Disposal of PFB is conditional upon the following:-
(a) The approval of the Minister of Finance and/or BNM;

(b) The approval of the Foreign Investment Committee, to be obtained by SBB;

(c) SBB being satisfied that there has been no breach of any of the representations and warranties given by PMBB to SBB;

(d) SBB being satisfied that there has been no material adverse change in the business, assets or financial position of PFB from the date of the PFB SSA;

(e) The approval of the shareholders of PMBB and SBB in respective extraordinary general meetings to be convened (if necessary); and

(f) Any other relevant authorities.

The PFB SSA Completion Date shall take place not later than 5.00 p.m. on the date falling seven (7) business days from the date of fulfilment of all the conditions as listed above, or such other date as SBB and PMBB may mutually agree in writing.


6.0 DIRECTORS AND SUBSTANTIAL SHAREHOLDERS' INTERESTS
 
None of the directors of UMG have declared any interest, direct or indirect, in the Proposed Disposal of PFB. The directors are not aware of any substantial shareholders that have any interest, direct or indirect, in the Proposed Disposal of PFB.



This announcement is dated 27 June 2000.