News

Advance Synergy Berhad ("ASB") - Proposed disposal By United Merchant Group Berhad ("UMG") Of Its 50.1% Equity Interest In Perdana Merchant Bankers Berhad ("PMBB") To Southern Bank Berhad ("SBB") For Cash ("Proposed Disposal Of PMBB")

BackJun 28, 2000
General Announcement
Reference No CU-000628-50062
Submitting Merchant Bank : Not Applicable
Company Name : ADVANCE SYNERGY BERHAD 
Stock Name : ASB
Date Announced : 28/06/2000

Type : Announcement
Subject : ADVANCE SYNERGY BERHAD ("ASB")
- PROPOSED DISPOSAL BY UNITED MERCHANT GROUP BERHAD ("UMG") OF ITS 50.1% EQUITY INTEREST IN PERDANA MERCHANT BANKERS BERHAD ("PMBB") TO SOUTHERN BANK BERHAD ("SBB") FOR CASH ("PROPOSED DISPOSAL OF PMBB")

Contents :

1.0 INTRODUCTION
The Board of Directors of ASB is pleased to announce that on 28 June 2000, UMG, a 50.75% owned subsidiary of ASB, has entered into a conditional sale of shares agreement with SBB for the sale of UMG's 50.1% equity interest in PMBB ("PMBB SSA") for cash. PMBB is a 70.1% owned subsidiary of UMG.

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


2.0 DETAILS OF THE PROPOSED DISPOSAL OF PMBB

2.1 Information on the Proposed Disposal of PMBB and Salient Terms of the PMBB SSA
UMG currently holds an aggregate of 54,609,900 ordinary shares of RM1.00 each in PMBB representing 70.1% equity interest in PMBB. In line with the merger programme initiated by Bank Negara Malaysia ("BNM"), UMG proposes to divest 39,027,900 ordinary shares of RM1.00 each in PMBB representing 50.1% equity interest to SBB.
Amongst some of the principal terms and conditions of the PMBB SSA for the Proposed Disposal of PMBB are as follows:-
The PMBB 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 in section 5.0 below ("PMBB SSA Completion Date").

Consideration
The consideration is payable wholly by cash and is equivalent to one point five (1.5) times the net tangible assets ("NTA") of PMBB to be determined by a firm of public accountants namely Messrs Kassim Chan & Co ("the Designated Auditors").

The NTA of PMBB will be based on the last day of the month immediately preceding the completion date of the PMBB SSA ("Completion Accounts Date of PMBB") after adjustments made in the manner set out in the PMBB SSA ("Completion NTA of PMBB").
The formula set out in the PMBB SSA to be used to determine the Completion NTA of PMBB includes adjustments for general provisions and revaluation of loan assets and other tangible and intangible assets.
For illustrative purposes, should the completion of the PMBB SSA fall on 23 July 2000, the purchase consideration for PMBB would be determined at 1.5 times the Completion NTA of PMBB as at 30 June 2000.
For the purposes of execution of the PMBB SSA, a provisional consideration has been set at approximately RM7.95 million which is based on 1.5 times of the unaudited NTA of PMBB as at 30 June 1999 ("Provisional Consideration of PMBB").


Completion Audit

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


Terms of payment
The consideration for PMBB is payable fully in cash in the following manner:-
1. A deposit of RM795,162 representing 10% of the Provisional Consideration of PMBB is to be paid to a stakeholder upon the execution of the PMBB SSA;
2. The remaining balance of RM7,156,459 representing 90% of the Provisional Consideration of PMBB is to be paid on PMBB SSA Completion Date;
3. Should the final consideration (as calculated based on 1.5 times of the Completion NTA of PMBB) ("Actual Consideration of PMBB") exceed the Provisional Consideration of PMBB, the difference is payable in cash by SBB to UMG, with interests calculated three (3) months from the PMBB SSA Completion Date up to the date of receipt by UMG of the difference; and
4. Conversely, should the Actual Consideration of PMBB be lower than the Provisional Consideration of PMBB, the difference is refundable in cash by UMG to SBB, with interests calculated three (3) months from the PMBB SSA Completion Date up to the date of receipt by SBB of the difference.


2.2 Basis of the Sale Consideration
The sale consideration is to be calculated at a premium of 50% above the Completion NTA of PMBB.
The method of determination of the sale consideration for the Proposed Disposal of PMBB was negotiated on a willing buyer-willing seller basis after taking into consideration the underlying NTA of PMBB.


3.0 BACKGROUND INFORMATION ON PMBB

PMBB was incorporated on 14 April 1988 as a public company named Intradagang Merchant Bankers (M) Berhad under the Companies Act 1965. It assumed its present name on 22 November 1993.
Presently, PMBB has an authorised share capital of RM250,000,000 comprising 250,000,000 ordinary shares of RM1.00 each. Its issued and paid-up share capital as at the date of this announcement is RM77,900,000 comprising 77,900,000 ordinary shares of RM1.00 each.
The principal activity of PMBB consists of merchant banking.


4.0 RATIONALE OF THE PROPOSED DISPOSAL OF PMBB
The Proposed Disposal of PMBB is in line with the recent merger programme by BNM of financial institutions in Malaysia.


5.0 CONDITIONS OF THE PROPOSED DISPOSAL OF PMBB

The Proposed Disposal of PMBB 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 UMG to SBB;
(d) SBB being satisfied that there has been no material adverse change in the business, assets or financial position of PMBB from the date of the PMBB SSA;
(e) The approval of the shareholders of UMG and SBB in their respective extraordinary general meetings to be convened (if necessary); and

(f) Any other relevant authorities.
The PMBB 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 UMG may mutually agree in writing.


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