News

Advance Synergy Furniture Sdn Bhd ("ASF") (Special Administrators Appointed)
  • Proposed Subscription By Hotline Furniture Berhad ("HFB") Of 24,000,000 New Ordinary Shares Of RM1.00 Each In ASF For A Total Subscription Price Of RM36,000,000 To Be Satisfied Through The Issuance Of Up To 30,000,000 New Ordinary Shares Of RM1.00 Each In HFB At An Issue Price Of RM1.20 Per New HFB Share

    • BackFeb 28, 2001
    General Announcement
    Reference No CU-010227-58067
    Submitting Merchant Bank : Not Applicable
    Company Name : ADVANCE SYNERGY BERHAD
    Stock Name : ASB
    Date Announced : 28/02/2001

    Type : Announcement
    Subject : ADVANCE SYNERGY FURNITURE SDN BHD ("ASF") (SPECIAL ADMINISTRATORS APPOINTED)
    • Proposed subscription by Hotline Furniture Berhad ("HFB") of 24,000,000 new ordinary shares of RM1.00 each in ASF for a total subscription price of RM36,000,000 to be satisfied through the issuance of up to 30,000,000 new ordinary shares of RM1.00 each in HFB at an issue price of RM1.20 per new HFB share

    Contents :

    The Board of Directors of Advance Synergy Berhad ("ASB") wishes to announce that ASF (Special Administrators Appointed) has entered into a Share Subscription Agreement ("SSA") with Hotline Furniture Berhad ("HFB") and Pengurusan Danaharta Nasional Berhad ("Danaharta") on 28 February 2001 in relation to a proposal formulated by the Special Administrators of ASF ("SA") to restructure and settle the outstanding debts of ASF as at the cut off date of 31 December 1999 in order to return ASF to a better financial footing (hereinafter referred to as "ASF Proposal").

    Pursuant to the SSA, HFB shall subscribe for 24,000,000 new ordinary shares of RM1.00 each in ASF ("Subscription Shares") for a total subscription price of RM36,000,000 to be satisfied through the proposed issuance of up to 30,000,000 new ordinary shares of RM1.00 each in HFB ("HFB Shares") at an issue price of RM1.20 per new HFB Share to ASF. The HFB Shares will be held on trust by Danaharta or any person appointed by Danaharta ("Creditors' Agent") for the benefit of the creditors of ASF.

    1. Details of the ASF Proposal

    1.1 The ASF Proposal prepared by the SA pursuant to Section 44 of the Pengurusan Danaharta Nasional Berhad Act, 1998 ("Danaharta Act") (includes all amendments, revisions and modifications made thereto) involves the following :-
    (a) The proposed cancellation of the entire issued and paid-up ordinary share capital of ASF except for two (2) ordinary shares of RM1.00 each ("Proposed Capital Cancellation"). The two (2) remaining shares will be transferred to HFB upon completion for RM2.00 cash;

    (b) The proposed issuance of the Subscription Shares to be subscribed by HFB at the total subscription price of RM36,000,000 ("Proposed Share Subscription");
    (c) The proposed scheme to settle the outstanding amount due to creditors comprising preferential creditors, secured and unsecured creditors and Danaharta ("Creditors") ("Proposed Settlement to Creditors"); and
    (d) The proposed call and put agreements to be entered into between the Creditors' Agent and Master Portfolio Sdn Bhd or such other relevant party in the form and substance acceptable to the Creditors' Agent ("Proposed Call and Put Option").
    The Proposed Call and Put Option is not inter-conditional with the Proposed Capital Cancellation, Proposed Share Subscription and Proposed Settlement to Creditors. In the event that the Proposed Call and Put Option is not successful, it shall not affect the implementation of the ASF Proposal other than the Proposed Call and Put Option. However, the Proposed Capital Cancellation, Proposed Share Subscription and Proposed Settlement to Creditors are inter-conditional upon each other.
    1.2 The details of the Proposed Capital Cancellation, Proposed Share Subscription and the Proposed Settlement to Creditors are as follows :-
    (a) Upon completion of the Proposed Capital Cancellation, ASF will have an issued and paid-up share capital of RM2.00 comprising 2 ordinary shares of RM1.00 each.
    (b) HFB proposes to subscribe for the Subscription Shares for a total subscription price of RM36,000,000. The Proposed Share Subscription will represent 99.99% equity interest of the enlarged ASF's share capital after the Proposed Capital Cancellation.
    The Proposed Share Subscription shall be payable in the following manner :-

    (i) HFB shall pay the first earnest deposit of RM360,000 to the Creditors' Agent upon the date of the execution of the SSA;
    (ii) HFB shall pay the second earnest deposit of RM1,440,000 to the Creditors' Agent within seven (7) business days from the date of quotation of the rights issue shares arising from the proposed rights issue by HFB of up to 34,485,000 new HFB ordinary shares of RM1.00 each on the basis of 3 new HFB ordinary shares of RM1.00 each for every 2 existing HFB ordinary shares of RM1.00 each held (together with up to 34,485,000 free warrants attached on a basis of 1 warrant for each rights share), which was approved by the Securities Commission on 1 August 2000;

    (iii) HFB shall issue up to 30,000,000 new HFB Shares at an issue price of RM1.20 per new HFB Share credited as fully paid-up to ASF to be held on trust by the Creditors' Agent for the benefit of the Creditors of ASF simultaneously upon the issuance of the Subscription Shares credited to HFB as fully paid-up; and
    (iv) The earnest deposit set out in (i) and (ii) above shall be held in escrow account by the Creditors' Agent to be refunded to HFB within fourteen (14) business days of receipt of the new HFB Shares by the Creditors' Agent.
    (c) The Creditors will be settled in accordance with the proposed scheme based on the amount outstanding as at 31 December 1999. All interest charges after this cut off date will be waived.
    1.3 ASB and certain of its subsidiary and associated companies ("the Identified ASB Group") are creditors under the Proposed Settlement to Creditors. The debt due from ASF to the Identified ASB Group is RM19,895,488 ("the Debt"). Under the Proposed Settlement to Creditors, the Identified ASB Group will waive a sum of RM12,512,803 from the Debt and the remaining balance of the Debt not waived will be settled by one (1) HFB Share for every RM1.20 of the remaining balance of the Debt and RM187 together with any interest thereon in cash. The value of HFB Shares to be received by the Identified ASB Group is RM7,382,498 and the total number of HFB Shares to be allotted and issued to the Identified ASB Group is 6,152,082 HFB Shares.
    The new HFB Shares will, upon issue and allotment, rank pari passu with the existing HFB Shares save and except that they will not be entitled to the proposed rights issue currently being implemented by HFB or to any dividends, rights, bonus issue or any other distribution declared to the HFB's shareholders which entitlement precedes the date of allotment of the new HFB Shares.

    2. Conditions
    The ASF Proposal is conditional upon the fulfilment and obtaining of the following by HFB :-
    (a) the approval of the Foreign Investment Committee ;

    (b) the approval of the Ministry of International Trade and Industry ;

    (c) the approval of the Securities Commission ;
    (d) the approval-in-principle of the Kuala Lumpur Stock Exchange for the listing and quotation of the new HFB Shares;

    (e) the approval of the shareholders of HFB at an extraordinary general meeting;
    (f) the approval of the secured creditors of ASF under Section 46(4) of the Danaharta Act; (g)the cancellation of the share capital of ASF under the Proposed Capital Cancellation;

    (h) any other approvals, consents, authorisation, permits or waivers of regulatory agency or authority necessary or appropriate to permit completion of the transaction contemplated hereby ; and

    (i) any other terms and conditions as stated in the SSA.


    3. Effects of the ASF Proposal

    3.1 Share Capital

    There is no effect on the share capital of ASB.


    3.2Earnings and Net Tangible Assets ("NTA")
    The ASF Proposal is not expected to have a material effect on the earnings and NTA of the ASB Group.

    4. Directors and substantial stockholders' interests
    None of the directors and/or substantial stockholders of ASB and/or persons connected to them has any interest, direct or indirect, in the ASF Proposal, other than Encik Azman Shah Haron who will receive 3,772 HFB Shares arising from a debt of RM12,500.00 due to him.
    Encik Azman Shah Haron is the spouse of Puan Masri Khaw Binti Abdullah, who is a director of ASB.

    (This announcement is dated 28 February 2001).