News
Advance Synergy Berhad ("ASB" Or "Company")
BackFeb 20, 2006
| General Announcement Reference No MM-060220-52584 |
| Submitting Merchant Bank | : | COMMERCE INTERNATIONAL MERCHANT BANKERS BERHAD |
| Company Name | : | ADVANCE SYNERGY BERHAD |
| Stock Name | : | ASB |
| Date Announced | : | 20/02/2006 |
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| Type | : | Announcement |
| Subject | : | ADVANCE SYNERGY BERHAD ("ASB" OR "COMPANY") |
Contents :
? PROPOSED CAPITAL REDUCTION INVOLVING THE FOLLOWING:
? PROPOSED REDUCTION OF THE ISSUED AND PAID-UP SHARE CAPITAL OF ASB FROM A MAXIMUM OF RM506,690,428 COMPRISING 506,690,428 ORDINARY STOCK UNITS IN ASB ("ASB STOCK UNITS") OF RM1.00 EACH (ASSUMING ALL ASB'S WARRANTS CONSTITUTED BY DEED POLL DATED 28 APRIL 2000 ("ASB WARRANTS") ARE EXERCISED AND THE NEW ASB STOCK UNITS ARISING THEREFROM ARE ISSUED BEFORE THE CUT-OFF DATE FOR THE PROPOSED CAPITAL REDUCTION) TO RM152,007,128 COMPRISING 506,690,428 ASB STOCK UNITS OF RM0.30 EACH, BY CANCELLING RM0.70 PAR VALUE FROM EVERY ASB STOCK UNIT OF RM1.00 EACH TO REDUCE THE ACCUMULATED LOSSES IN THE COMPANY ("PROPOSED PAR VALUE REDUCTION"); AND
? PROPOSED REDUCTION OF THE SHARE PREMIUM ACCOUNT OF ASB OF UP TO RM206,949,328 TO REDUCE THE ACCUMULATED LOSSES IN THE COMPANY ("PROPOSED SHARE PREMIUM ACCOUNT REDUCTION")
(COLLECTIVELY REFERRED TO AS THE "PROPOSED CAPITAL REDUCTION");
? PROPOSED INCREASE IN THE AUTHORISED SHARE CAPITAL OF THE COMPANY FROM RM800,000,000 DIVIDED INTO 800,000,000 ORDINARY SHARES OF RM1.00 EACH TO RM900,000,000 DIVIDED INTO 3,000,000,000 ORDINARY SHARES OF RM0.30 EACH AFTER THE PROPOSED CAPITAL REDUCTION ("PROPOSED INCREASE IN AUTHORISED SHARE CAPITAL"); AND
? PROPOSED CONVERSION OF STOCK UNITS TO ORDINARY SHARES ("PROPOSED CONVERSION")
(COLLECTIVELY REFERRED TO AS THE "PROPOSALS")
On behalf of the Board of Directors of ASB ("Board"), Commerce International Merchant Bankers Berhad wishes to announce that the Board is proposing to implement the Proposals.
For ease of reading, unless otherwise specified, the term "Stock Unit" has been used throughout this announcement. If and when the Proposed Conversion is effected, references to the term "Stock Unit" shall mean ordinary share.
2.1.1 Proposed Par Value Reduction
The Proposed Par Value Reduction shall involve a reduction in the issued and paid-up share capital of ASB from a maximum of RM506,690,428 comprising 506,690,428 ASB Stock Units of RM1.00 each to RM152,007,128 comprising 506,690,428 ASB Stock Units of RM0.30 each, by cancelling RM0.70 of par value from every ASB Stock Unit of RM1.00 each to reduce the accumulated losses in the Company.
The reduction of RM0.70 of par value from every ASB Stock Unit of RM1.00 each would give rise to a maximum credit of approximately RM354,683,300, which would be utilised to reduce the audited accumulated losses of the Company. Based on the audited financial statements of ASB as at 31 December 2004, the Company has accumulated losses of RM443,404,861.
The maximum reduction as mentioned above has been determined based on the Company's issued and paid-up share capital as at 10 February 2006 of RM337,793,619 comprising 337,793,619 ASB Stock Units of RM1.00 each and assuming that all of the 168,896,809 ASB Warrants outstanding as at 10 February 2006 are fully exercised into ASB Stock Units of RM1.00 each before the Proposed Par Value Reduction is effected. This shall be referred to as the "Maximum Scenario".
In the event that the Proposed Par Value Reduction is effected before any of the outstanding ASB Warrants are exercised, the Proposed Par Value Reduction shall only involve a reduction in the issued and paid-up share capital in ASB of RM337,793,619 comprising 337,793,619 ASB Stock Units of RM1.00 each to RM101,338,086 comprising 337,793,619 ASB Stock Units of RM0.30 each. This shall be referred to as the "Minimum Scenario". In the Minimum Scenario, the Proposed Par Value Reduction would only give rise to a credit of approximately RM236,455,533 to reduce the latest audited accumulated losses of the Company.
The actual amount of reduction of share capital will be determined at a later date based on the issued and paid-up share capital of the Company at a cut-off date to be determined prior to effecting the Proposed Par Value Reduction.
The sanction of the High Court of Malaya for the Proposed Par Value Reduction pursuant to Section 64 of the Companies Act, 1965 would be sought after the receipt of the approval from the stockholders of ASB for the Proposals.
2.1.2 Proposed Share Premium Account ReductionThe reduction of RM0.70 of par value from every ASB Stock Unit of RM1.00 each would give rise to a maximum credit of approximately RM354,683,300, which would be utilised to reduce the audited accumulated losses of the Company. Based on the audited financial statements of ASB as at 31 December 2004, the Company has accumulated losses of RM443,404,861.
The maximum reduction as mentioned above has been determined based on the Company's issued and paid-up share capital as at 10 February 2006 of RM337,793,619 comprising 337,793,619 ASB Stock Units of RM1.00 each and assuming that all of the 168,896,809 ASB Warrants outstanding as at 10 February 2006 are fully exercised into ASB Stock Units of RM1.00 each before the Proposed Par Value Reduction is effected. This shall be referred to as the "Maximum Scenario".
In the event that the Proposed Par Value Reduction is effected before any of the outstanding ASB Warrants are exercised, the Proposed Par Value Reduction shall only involve a reduction in the issued and paid-up share capital in ASB of RM337,793,619 comprising 337,793,619 ASB Stock Units of RM1.00 each to RM101,338,086 comprising 337,793,619 ASB Stock Units of RM0.30 each. This shall be referred to as the "Minimum Scenario". In the Minimum Scenario, the Proposed Par Value Reduction would only give rise to a credit of approximately RM236,455,533 to reduce the latest audited accumulated losses of the Company.
The actual amount of reduction of share capital will be determined at a later date based on the issued and paid-up share capital of the Company at a cut-off date to be determined prior to effecting the Proposed Par Value Reduction.
The sanction of the High Court of Malaya for the Proposed Par Value Reduction pursuant to Section 64 of the Companies Act, 1965 would be sought after the receipt of the approval from the stockholders of ASB for the Proposals.
The Proposed Share Premium Account Reduction shall involve reduction in the share premium account of the Company of up to RM206,949,328 and that the credit of up to RM206,949,328 arising therefrom shall be utilised towards setting-off the remaining accumulated losses of ASB after the Proposed Par Value Reduction. The maximum amount of RM206,949,328 to be utilised under the Proposed Share Premium Account Reduction above has been determined based on the Minimum Scenario, as set out in Section 2.1.1 above.
Based on the audited financial statements of ASB for the financial year ended 31 December 2004, the Company has share premium reserves of RM430,437,706. For illustrative purposes, the Proposed Share Premium Account Reduction will on a maximum basis reduce the share premium of ASB from RM430,437,706 to RM223,488,378.
In the Maximum Scenario whereby the Proposed Share Premium Account Reduction is implemented assuming all the outstanding ASB Warrants are exercised and based on the audited accumulated losses of ASB as at 31 December 2004 of RM443,404,861, the Proposed Share Premium Account Reduction shall only involve a reduction in the share premium account of RM88,721,561.
The actual amount of reduction from the share premium account will only be finalised at a later date as the amount of reduction will be based on the latest audited accumulated losses of the Company and the number of issued and paid-up share capital of ASB at a cut-off date to be determined prior to effecting the Proposed Par Value Reduction.
The sanction of the High Court of Malaya for the Proposed Share Premium Account Reduction pursuant to Sections 64 and 60(2) of the Companies Act, 1965 would be sought after the receipt of the approval from the stockholders of ASB for the Proposals.
Based on the audited financial statements of ASB for the financial year ended 31 December 2004, the Company has share premium reserves of RM430,437,706. For illustrative purposes, the Proposed Share Premium Account Reduction will on a maximum basis reduce the share premium of ASB from RM430,437,706 to RM223,488,378.
The actual amount of reduction from the share premium account will only be finalised at a later date as the amount of reduction will be based on the latest audited accumulated losses of the Company and the number of issued and paid-up share capital of ASB at a cut-off date to be determined prior to effecting the Proposed Par Value Reduction.
The sanction of the High Court of Malaya for the Proposed Share Premium Account Reduction pursuant to Sections 64 and 60(2) of the Companies Act, 1965 would be sought after the receipt of the approval from the stockholders of ASB for the Proposals.
2.2 Proposed Rights Issue of ICULS
2.2.1 Introduction
The Proposed Rights Issue of ICULS shall involve a renounceable two (2)-call rights issue of up to RM266,012,475 nominal value of ICULS at 100% of the nominal amount of RM0.15 each on the basis of RM0.525 nominal value of ICULS (or equivalent to 3.5 ICULS) for every one (1) ASB Stock Unit of RM1.00 each held on an entitlement date and at a cash call amount to be determined and announced later.
For ease of reading and for purposes of this announcement, we shall refer to one (1) nominal value of ICULS of RM0.15 each as a unit of ICULS.
Based on the Maximum Scenario, assuming the ASB Warrants are fully exercised and the new ASB Stock Units of RM1.00 each arising therefrom are issued prior to the entitlement date for the Proposed Rights Issue of ICULS ("Entitlement Date"), the Proposed Rights Issue of ICULS would involve the issuance of a maximum of up to 1,773,416,498 ICULS representing a total nominal value of RM266,012,475.
However, under the Minimum Scenario which is based on the issued and paid-up share capital of ASB as at 10 February 2006 of RM337,793,619 comprising 337,793,619 ASB Stock Units of RM1.00 each and on the assumption that the outstanding ASB Warrants as at 10 February 2006 are not exercised into new ASB Stock Units of RM1.00 each, the Proposed Rights Issue of ICULS will involve the issuance of 1,182,277,667 ICULS representing a total nominal value of RM177,341,650.
The actual amount of ICULS to be issued pursuant to the Proposed Rights Issue of ICULS is dependent on the share capital of ASB as at the Entitlement Date.
The exercise price of the ASB Warrants which are not exercised before the Entitlement Date may be adjusted in accordance with the provisions of the Deed Poll dated 28 April 2000 which constitutes the ASB Warrants. The adjustments relating to the ASB Warrants, if any, will be finalised and announced at a later date.
2.2.2 Pricing of ICULS
For ease of reading and for purposes of this announcement, we shall refer to one (1) nominal value of ICULS of RM0.15 each as a unit of ICULS.
Based on the Maximum Scenario, assuming the ASB Warrants are fully exercised and the new ASB Stock Units of RM1.00 each arising therefrom are issued prior to the entitlement date for the Proposed Rights Issue of ICULS ("Entitlement Date"), the Proposed Rights Issue of ICULS would involve the issuance of a maximum of up to 1,773,416,498 ICULS representing a total nominal value of RM266,012,475.
However, under the Minimum Scenario which is based on the issued and paid-up share capital of ASB as at 10 February 2006 of RM337,793,619 comprising 337,793,619 ASB Stock Units of RM1.00 each and on the assumption that the outstanding ASB Warrants as at 10 February 2006 are not exercised into new ASB Stock Units of RM1.00 each, the Proposed Rights Issue of ICULS will involve the issuance of 1,182,277,667 ICULS representing a total nominal value of RM177,341,650.
The actual amount of ICULS to be issued pursuant to the Proposed Rights Issue of ICULS is dependent on the share capital of ASB as at the Entitlement Date.
The ICULS are proposed to be implemented via two (2) calls, the first call being a cash call and the second call being a capitalisation from the Company's share premium account. The cash call amount of the ICULS to be issued under the Proposed Rights Issue of ICULS will be determined and announced later.
Strictly for illustrative purposes, based on an illustrative cash call amount for the Proposed Rights Issue of ICULS of RM0.07 per ICULS, the Proposed Rights Issue of ICULS will raise gross proceeds of between RM82,759,437 and RM124,139,155 under the Minimum Scenario and Maximum Scenario, respectively. Similarly, the total amount of share premium to be capitalised for the illustrative second call amount of RM0.08 per ICULS will range between RM94,582,213 and RM141,873,320 under the Minimum Scenario and Maximum Scenario, respectively.
Based on the above and the audited share premium account balance of ASB as at 31 December 2004 of RM430,437,706, under the Minimum Scenario, the Company will have sufficient balance in the share premium account balance for the Proposed Share Premium Account Reduction (of RM206,949,328) and Proposed Rights Issue of ICULS (of RM94,582,213). Similarly, under the Maximum Scenario, the Company will also have sufficient share premium balance for the Proposed Share Premium Account Reduction (of RM88,721,561) and Proposed Rights Issue of ICULS (of RM141,873,320).
The sanction of the High Court of Malaya for the utilisation of the share premium account to pay up the second call of the Proposed Rights Issue of ICULS pursuant to Sections 64 and 60(2) of the Companies Act, 1965 would be sought after the receipt of approval from the stockholders of ASB for the Proposals.
Strictly for illustrative purposes, based on an illustrative cash call amount for the Proposed Rights Issue of ICULS of RM0.07 per ICULS, the Proposed Rights Issue of ICULS will raise gross proceeds of between RM82,759,437 and RM124,139,155 under the Minimum Scenario and Maximum Scenario, respectively. Similarly, the total amount of share premium to be capitalised for the illustrative second call amount of RM0.08 per ICULS will range between RM94,582,213 and RM141,873,320 under the Minimum Scenario and Maximum Scenario, respectively.
The sanction of the High Court of Malaya for the utilisation of the share premium account to pay up the second call of the Proposed Rights Issue of ICULS pursuant to Sections 64 and 60(2) of the Companies Act, 1965 would be sought after the receipt of approval from the stockholders of ASB for the Proposals.
2.2.3 Minimum Subscription
Despite the maximum gross proceeds that may be raised from the Proposed Rights Issue of ICULS of RM124,139,155 as set out in Section 2.2.2 above, the Proposed Rights Issue of ICULS will involve a minimal subscription level of ICULS which is required for ASB to raise a minimum level of gross proceeds of about RM40,000,000. The actual size of the ICULS to be issued under the minimum subscription level will depend on the cash call amount. The minimum level of ICULS to be issued hereunder would have to be underwritten and/or undertaken to be subscribed by the stockholders of ASB.
Based on the illustrative cash call amount of RM0.07 per ICULS, the minimum subscription will require the issuance of a total of 571,428,571 ICULS which represents a total nominal value of RM85,714,286.
The minimum level of subscription has been determined after taking into consideration, amongst others, the amount of funds required to repay certain borrowings, to fund the working capital of ASB and its subsidiaries ("ASB Group") and to defray expenses relating to the Proposals. Any proceeds raised from the Proposed Rights Issue of ICULS in excess of that raised under the minimum level of subscription will be used to repay borrowings and/or to fund the working capital of the ASB Group.
2.2.4 Indicative Principal terms of ICULS
The indicative principal terms of the ICULS are as set out in Table 1.
2.2.5 Major Stockholders' Undertaking and Underwriting Arrangement
The Board will endeavour to procure irrevocable undertakings from its substantial stockholder(s) to subscribe in full or in part their respective entitlements under the Proposed Rights Issue of ICULS as well as to arrange for the underwriting of such number of ICULS, whereby the total number of ICULS undertaken to be subscribed by the substantial stockholder(s) and/or underwritten will be of such amount so as to enable the Company to achieve the minimum level of gross proceeds of about RM40 million as set out in Section 2.2.3 above.
2.2.6 Proposed Utilisation of Proceeds
Strictly for illustrative purposes, the Proposed Rights Issue of ICULS is expected to raise gross proceeds of between RM82,759,437 and RM124,139,155 under the Minimum Scenario and Maximum Scenario, respectively. The proposed utilisation of proceeds to be raised from the Proposed Rights Issue of ICULS is set out in Table 2.
2.3 Proposed Increase in Authorised Share Capital
Despite the maximum gross proceeds that may be raised from the Proposed Rights Issue of ICULS of RM124,139,155 as set out in Section 2.2.2 above, the Proposed Rights Issue of ICULS will involve a minimal subscription level of ICULS which is required for ASB to raise a minimum level of gross proceeds of about RM40,000,000. The actual size of the ICULS to be issued under the minimum subscription level will depend on the cash call amount. The minimum level of ICULS to be issued hereunder would have to be underwritten and/or undertaken to be subscribed by the stockholders of ASB.
Based on the illustrative cash call amount of RM0.07 per ICULS, the minimum subscription will require the issuance of a total of 571,428,571 ICULS which represents a total nominal value of RM85,714,286.
The minimum level of subscription has been determined after taking into consideration, amongst others, the amount of funds required to repay certain borrowings, to fund the working capital of ASB and its subsidiaries ("ASB Group") and to defray expenses relating to the Proposals. Any proceeds raised from the Proposed Rights Issue of ICULS in excess of that raised under the minimum level of subscription will be used to repay borrowings and/or to fund the working capital of the ASB Group.
The indicative principal terms of the ICULS are as set out in Table 1.
The Board will endeavour to procure irrevocable undertakings from its substantial stockholder(s) to subscribe in full or in part their respective entitlements under the Proposed Rights Issue of ICULS as well as to arrange for the underwriting of such number of ICULS, whereby the total number of ICULS undertaken to be subscribed by the substantial stockholder(s) and/or underwritten will be of such amount so as to enable the Company to achieve the minimum level of gross proceeds of about RM40 million as set out in Section 2.2.3 above.
Strictly for illustrative purposes, the Proposed Rights Issue of ICULS is expected to raise gross proceeds of between RM82,759,437 and RM124,139,155 under the Minimum Scenario and Maximum Scenario, respectively. The proposed utilisation of proceeds to be raised from the Proposed Rights Issue of ICULS is set out in Table 2.
The authorised share capital of the Company is RM800,000,000 comprising 800,000,000 ASB Stock Units of RM1.00 each, of which 337,793,619 ASB Stock Units of RM1.00 each have been issued and fully paid up as at 10 February 2006.
2.4 Proposed Conversion
The Proposed Conversion shall involve the conversion of all ASB Stock Units in the issued and paid-up capital of ASB back to ordinary shares of RM1.00 each or ordinary shares of RM0.30 each if the Proposed Capital Reduction is implemented. There will not be any changes to the rights and obligations of the ASB Stock Unit holders after the Proposed Conversion.
3. Rationale for the Proposals
The Proposed Conversion shall involve the conversion of all ASB Stock Units in the issued and paid-up capital of ASB back to ordinary shares of RM1.00 each or ordinary shares of RM0.30 each if the Proposed Capital Reduction is implemented. There will not be any changes to the rights and obligations of the ASB Stock Unit holders after the Proposed Conversion.
The number of ASB Stock Units held by the stockholders will not change as a result of the Proposed Capital Reduction as only the par value of the ASB Stock Unit will reduce from RM1.00 to RM0.30 each.
The Proposed Rights Issue of ICULS is undertaken primarily to finance the repayment of borrowings and working capital of the Group. The issue of the ICULS on a rights basis will allow the stockholders of the Company to participate in the fund raising exercise as well as to maintain or increase their participation in the equity of the Company as the ICULS are convertible into new ASB Stock Units. The holders of the ICULS will be entitled to receive coupon payments throughout the tenure of the ICULS. Similarly, the fixing of the coupon rate will enable the Company to limit the risk associated with volatility of interest rates during the tenure of the ICULS.
3.3 Proposed Increase in Authorised Share Capital
The Proposed Increase in Authorised Share Capital is to round up the number of ASB Stock Units after the change in par value pursuant to the Proposed Capital Reduction. Based on ASB's existing authorised share capital of RM800,000,000, after the Proposed Par Value Reduction to RM0.30 per ASB Stock Unit, the number of ASB Stock Units will be 2,666,666,667. In order to derived a rounded figure for the authorised share capital of ASB and the number of ASB Stock Units represented by the authorised share capital, the Proposed Increase in Authorised Share Capital is therefore proposed. Such enlarged share capital will also cater for any future increase in the issued and paid-up share capital of ASB.
3.4 Proposed Conversion
The Proposed Conversion is to convert all the ASB Stock Units in the share capital of ASB to ordinary shares in order to standardise the terminology for the share capital of ASB with the terminology commonly used in the Malaysian capital market. As the characteristics of the ASB Stock Units are the same as ordinary shares, the Proposed Conversion would eliminate any confusion relating to the different terms used.
4. Effects of the Proposals
4.1 Issued and Paid-up Share Capital
The proforma effects of the Proposed Capital Reduction and the Proposed Rights Issue of ICULS on the issued and paid-up share capital of ASB are shown in Table 3.
4.2 Net Tangible Asset ("NTA") and NTA per ASB Stock Unit
The proforma effects of the Proposed Capital Reduction and the Proposed Rights Issue of ICULS on the NTA and NTA per ASB Stock Unit of the Group are shown inTable 4.
4.3 GearingThe proforma effects of the Proposed Capital Reduction and the Proposed Rights Issue of ICULS on the gearing of the Group are shown inTable 5.
4.4 Earnings and Earning per ASB Stock Unit ("EPS")The Proposed Capital Reduction is not expected to have any effect on the earnings and EPS of the ASB Group for the financial year ending 31 December 2006 and subsequent years.
The Proposed Rights Issue of ICULS is not expected to have any material effect on the earnings and EPS of the ASB Group for the financial year ending 31 December 2006 as it is only expected to be completed towards the end of year 2006. The repayment of part of the Group's bank borrowings from the proceeds raised from the Proposed Rights Issue of ICULS is expected to result in net interest savings to the Group and hence will enhance its future earnings. Nevertheless, upon the conversion of the ICULS, the EPS will be reduced accordingly. Further, EPS computed on a fully diluted basis may also reduce accordingly.
The Proposed Rights Issue of ICULS is not expected to have any material effect on the earnings and EPS of the ASB Group for the financial year ending 31 December 2006 as it is only expected to be completed towards the end of year 2006. The repayment of part of the Group's bank borrowings from the proceeds raised from the Proposed Rights Issue of ICULS is expected to result in net interest savings to the Group and hence will enhance its future earnings. Nevertheless, upon the conversion of the ICULS, the EPS will be reduced accordingly. Further, EPS computed on a fully diluted basis may also reduce accordingly.
4.5 Substantial Stockholders' Stockholdings
The proforma effects of the Proposed Capital Reduction and the Proposed Rights Issue of ICULS on the stockholdings of the substantial stockholders of ASB based on the Register of Substantial Stockholders as at 10 February 2006 are set out in Table 6.
4.6 Dividends
The Board did not declare any dividend for the financial year ended 31 December 2004. Any dividend to be declared and paid by ASB for the financial year ended 31 December 2005 and subsequent years will depend on, amongst others, the future performance, cashflow position and the funding requirements of the Group.
The Board is of view that the Proposed Capital Reduction and the Proposed Rights Issue of ICULS will have a positive effect on ASB's ability to pay dividends in the future. The Proposed Capital Reduction is expected to extinguish the entire amount of accumulated losses in the Company and will place the Company in a better position to declare dividends in the future. In addition, the Proposed Rights Issue of ICULS and the part repayment of bank borrowings reduces the risks associated with high borrowings and hence, improve the ability of the Company to declare dividend in the future.
The Proposed Increase in Authorised Share Capital and the Proposed Conversion will not have any effects on the issued and paid-up share capital, the Group NTA and the Group NTA per ASB Stock Unit, gearing, earning and EPS, substantial stockholders' stockholdings and dividend of the Company.The Board is of view that the Proposed Capital Reduction and the Proposed Rights Issue of ICULS will have a positive effect on ASB's ability to pay dividends in the future. The Proposed Capital Reduction is expected to extinguish the entire amount of accumulated losses in the Company and will place the Company in a better position to declare dividends in the future. In addition, the Proposed Rights Issue of ICULS and the part repayment of bank borrowings reduces the risks associated with high borrowings and hence, improve the ability of the Company to declare dividend in the future.
5. Conditions of the Proposals
The Proposals are subject to the approvals being obtained from the following:
(ii) The High Court of Malaya for the Proposed Capital Reduction and the utilisation of the share premium account of ASB to pay up the second call for the Proposed Rights Issue of ICULS;
(iii) Bursa Malaysia Securities Berhad ("Bursa Securities") for the listing of and quotation for ICULS and new ASB Stock Units of RM0.30 eachto be issued pursuant to the conversion of ICULS;
(iv) The stockholders of ASB for the Proposals at a general meeting to be convened; and
(v) Any other relevant parties and/or authorities.
The Proposed Capital Reduction, the Proposed Rights Issue of ICULS and the Proposed Increase in Authorised Share Capital are conditional upon one another. The Proposed Conversion is not conditional on any other proposals.
6.Directors and Major Stockholders' Interests
None of the Directors and/or major stockholders of ASB and/or persons connected to them have any interests, direct or indirect, in the Proposals other than that derived as stockholders of ASB.
7. Directors' Opinion
The Board, after careful deliberation, is of the opinion that the Proposals are in the best interest of the Company.
8. Departure from the SC's Guidelines
The Proposed Capital Reduction, the Proposed Conversion and the Proposed Increase in Authorised Share Capital are not subject to the approval of the SC and do not fall under the SC's Policies and Guidelines on Issue/Offer of Securities or any amendments thereof ("SC's Guidelines"). Therefore, to the best knowledge of the Board, the above proposals have not departed from the SC's Guidelines.
The Proposed Rights Issue of ICULS as set out in this announcement does not depart from the requirements of the SC's Guidelines.
The Proposed Rights Issue of ICULS as set out in this announcement does not depart from the requirements of the SC's Guidelines.
9. Adviser
CIMB has been appointed as the adviser to the Company for the Proposals.
10. Timing of Submission to the Authorities
The application to the SC for the Proposed Rights Issue of ICULS is expected to be made within six (6) months from the date of this announcement. The applications to Bursa Securities and the High Court of Malaya will only be made at a later date after the approval of the SC has been received for the Proposed Rights Issue of ICULS and the approval from the stockholders has been received for the Proposals.
This announcement is dated 20 February 2006.
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