Announcement Details :
1. INTRODUCTION
The Board of Directors of BHS Industries Bhd ("BHS" or "the Company") wishes to announce that BHS ("the Purchaser") had on 28 December 2009 entered into separate Sale and Purchase Agreements (SPAs) with Harta Sistem Sdn Bhd ("HSSB") and System Industrial Development Sdn Bhd ("SIDSB") [the "Vendors"] for the acquisition of the following 4 parcels of agricultural freehold land located at Lot 99, Lot 1081, Lot 462 and Lot 463 Mukim Kota Tinggi, Johor for a total cash consideration of RM2,293,440 as disclosed below ("Proposed Acquisition").
2. DETAILS OF THE PROPERTIES
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Description of property
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Vendors
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Purchase Price (RM)
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1
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All that piece of agricultural freehold land held under GRN379407 Lot 99 in the Mukim of Kota Tinggi, District of Kota Tinggi, State of Johor, containing an area measuring approximately 9.437 acres
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HSSB
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1,226,810
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2.
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All that piece of agricultural freehold land held under GM 1489 Lot 1081 in the Mukim of Kota Tinggi, District of Kota Tinggi, State of Johor, containing an area measuring approximately 4.437 acres.
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HSSB
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576,810
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3
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All that piece of agricultural freehold land held under GM 436 Lot 462 in the Mukim of Kota Tinggi, District of Kota Tinggi, State of Johor, containing an area measuring approximately 3.381 acres.
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HSSB
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321,195
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4
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All that piece of agricultural freehold land held under GM 1479 Lot 463 in the Mukim of Kota Tinggi, District of Kota Tinggi, State of Johor, containing an area measuring approximately 1.775 acres.
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SIDSB
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168,625
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TOTAL
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2,293,440
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3. BASIS OF ARRIVING AT THE PURCHASE PRICES
The purchase price is arrived at based on the recommendations of an independent valuer. In addition, it is also guided by the purchase price paid by BHS in July 2009.
4. SALIENT TERMS OF THE SPA's
a. The Vendors have agreed to sell and the Purchaser has agreed to purchase the Properties free from all encumbrances and with vacant possession for a total cash consideration of RM2,293,440.
b. 10% of the purchase price is payable on the date of the signing of the S&P.
c. The balance of the purchase price is payable within 3 months from the date of the signing of the S&P. If the Purchaser shall not be able to complete within the time, the Vendors shall grant the Purchaser an extension of time of one month to complete the Proposed Acquisition. Interest at the rate of 8% per annum calculated on a daily basis on the balance of the purchase price shall be imposed.
d. Prior to the release of the balance of the purchase price by the Purchaser, the vendors shall have given a written undertaking addressed to the Purchaser to refund all monies paid by the Purchaser to the Vendors in the event of non-registration of the Instrument of Transfer.
e. Upon full payment of the purchase price the Purchaser shall be entitled to receive all rent and other profits accruing therefrom. All outgoings including rates, taxes, assessments and other levies imposed by the relevant authorities (excluding fines) shall be apportioned based on the date of completion.
f. If there exists a variation in the measurement of the said property after a survey is carried out by a licensed surveyor within one year from the date of this agreement, then the total sale price of the said property shall be amended accordingly.
5. SOURCES OF FUND
The purchase consideration is funded from the balance of the disposal proceeds of a piece of leasehold industrial land for RM4.2 million in July 2009.
6. INFORMATION ON THE VENDORS
Both SIDSB and HSSB are private companies limited by shares and incorporated in Malaysia with issued share capital of RM2,176,000 and RM4,069,061 respectively.
SIDSB is a wholly owned subsidiary of HSSB and HSSB is a substantial shareholder in BHS. The directors, Mr. Heng Song Khoon and Ms Liew Sai Ying jointly own 100% of shares in HSSB.
The principal activities of HSSB are property investment, factory letting, property management and investment holding and the principal activities of SIDSB are property investment.
HSSB acquired the 3 parcels of land Lot 99, Lot 1081 and Lot 462 in 1989 for about RM330,000 and SIDSB acquired Lot 463 for about RM92,000 in 1994.
7. LIABILITIES TO BE ASSUMED
There are no liabilities to be assumed by BHS arising from the Proposed Acquisition.
8. RATIONALE FOR THE TRANSACTIONS
At present, BHS owns 3 parcels of agricultural freehold land in Mukim of Kota Tinggi. The acquisition of 4 parcels of land with two adjoining to the existing land will enhance the value of land in its entirety for investment or future development purposes.
9. EFFECTS OF THE TRANSACTIONS
The Proposed Acquisition will not have any effect on the issued and paid up share capital and they will not have any material effect on the net total assets per share, earnings per share and gearing of BHS.
10. APPROVALS
The Proposed Acquisition do not require the approval of the shareholders'of BHS nor the approval of any relevant authorities.
The highest percentage ratio applicable to the transactions pursuant to Paragraph 10.02(g) of the listing requirements is 4.22%
11. DIRECTORS' AND SUBSTANTIAL SHAREHOLDERS' INTERESTS
Save as disclosed below, none of the other directors has any interest, direct and indirect, in the Proposed Acquisition :-
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Name
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Shareholding (Excluding Treasury Shares)
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Direct
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Indirect
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No. of Shares
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%
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No. of Shares
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%
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Heng Song Khoon
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6,400,161
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8.88
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31,949,543(1)
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44.31
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Liew Sai Ying
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4,245,296
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5.88
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31,949,543(1)
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44.31
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Heng Boon Seng
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3,370,000
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4.67
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500,000(2)
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0.69
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Notes:
1. Deemed interested by virtue of his/her interest in Harta Sistem Sdn Bhd.
2. Deemed interested by virtue of his spouse.
12. STATEMENT OF AUDIT COMMITTEE
The Audit Committee of BHS, having considered the rationale for the Proposed Acquisition, is of the opinion that the Proposed Acquisition is in the best interest of BHS and, they are fair, reasonable and are not detrimental to the interest of minority shareholders as the transactions are made on normal commercial terms which are not more favourable to the related party than generally available to the public.
13. DIRECTORS' RECOMMENDATION
The Directors of BHS (except interested directors, Mr. Heng Soon Khoon, Ms Liew Sai Ying and Mr. Heng Boon Seng), having considered the rationale for the transactions, are of the opinion that the transactions are fair and reasonable and in the best interest of the BHS.
14. TOTAL AMOUNT TRANSACTED WITH THE SAME RELATED PARTY IN THE PRECEDING TWELVE MONTHS
The total amount (related party transactions and recurrent related party transactions) transacted with HSSB in the preceding twelve months is nil.
15. EXPECTED TIME FRAME FOR COMPLETION OF THE TRANSACTIONS
Barring any unforeseen circumstances, the Proposed Acquisition is expected to be completed within 4 months from the date of signing SPAs.
16. DEPARTURE FROM THE COMMISSION'S POLICIES AND GUIDELINES ON ISSUE/OFFER OF SECURITIES
The Proposed Acquisition has not departed from the Commission's Guidelines on the Offering of Equity and Equity-Linked Securities.
17. DOCUMENTS FOR INSPECTION
The copies of SPAs and Valuation Report may be inspected at the registered address of the BHS at 312, 3rd Floor, Block C, Kelana Square, 17 Jalan SS7/26, 47301 Petaling Jaya, Selangor Darul Ehsan during the normal office hours from Monday to Friday (except public holidays) for a period of three months from the date of this Announcement.
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