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Exchange Filings


28 May 2013


TRANSACTIONS (CHAPTER 10 OF LISTING REQUIREMENTS)
NON RELATED PARTY TRANSACTIONS

Description TAMBUN INDAH LAND BERHAD (“TAMBUN INDAH” OR “THE COMPANY”)
DISPOSAL OF LAND BY A 60%-OWNED SUBSIDIARY, PALMINGTON SDN BHD
The Board of Directors of Tambun Indah is pleased to announce that on 28 May 2013, Palmington Sdn Bhd. (“Palmington”), a 60%-owned subsidiary of Tambun Indah had entered into a Sale and Purchase Agreement (“SPA”) with TNC Capital Sdn. Bhd. (“TNC”) to dispose of part of the land known as Lot 8753 located at Simpang Ampat, Seberang Perai Selatan and held under the documents of title Geran (First Grade) No. 73120 (formerly H.S.(D) 28461) measuring in total approximately 15.55 acres (“the Property”) for a total cashconsideration of RM12,870,000.00 (“Purchase Price”) (“the Disposal”).
The details of the Disposal are as follows :

1. INFORMATION ON PALMINGTON


      Palmington is a private limited company incorporated in Malaysia on 08 March 2010 with an authorised share capital of RM10,000,000.00 comprising 10,000,000 ordinary shares with par value of RM1.00 each and the paid-up of RM5,756,000.00.Palmington is principally involved in property development.

      The Directors of Palmington are Teh Kiak Seng, Teh Theng Theng, Thaw Yeng Cheong, Hamidon Bin Abdullah and Cheang Chee Leong.

      The shareholders of Palmington and its shareholdings are as follows:-

      Name of Shareholders
      No. of Ordinary
      Shares Held
      Percentage of Shareholding
      Tambun Indah
      3,453,600
      60%
      Pembangunan Bandar Mutiara Sdn. Bhd.
      2,302,400
      40%

2. INFORMATION ON TNC

      TNC is a private limited company incorporated in Malaysia on 03 April 2013 with an authorised share capital of RM500,000.00 comprising 500,000 ordinary shares with par value of RM1.00 each and the paid-up of RM2.00. TNC is principally involved in investment holdings and property management services.

      The Directors of TNC are Teh Kiak Seng, Cheang Chee Leong, Low Kok Shen and Low Kok Aun.

      The shareholders of TNC and its shareholdings are as follows:-

      Name of Shareholders
      No. of Ordinary
      Shares Held
      Percentage of Shareholding
      Palmington
      1
      50%
      RiproSdn. Bhd.
      1
      50%

3. INFORMATION ON THE LAND
      Palmington is the registered proprietor of all that piece of land known as Lot 8753 located at Simpang Ampat, Seberang Perai Selatan and held under the documents of title Geran (First Grade) No. 73120 (formerly H.S.(D) 28461) (“the Land”).

      The Land is a freehold land held for investment purpose, and located in a new township development known as Pearl City in the locality of Simpang Ampat, Seberang Perai Selatan, Pulau Pinang.

4. SALIENT TERMS OF THE SPA

4.1 Mode and Manner of Payment of the Purchase Price

Palmington and TNC agree and undertake that the Purchase Price of RM12,870,000 for the sale and transfer of the Property, shall be paid and is payable at the times and in the manner as follows :
      (a) the sum of RM1,287,000.00being the Deposit paid by TNC to Palmington upon the execution of the SPA, shall be appropriated towards part payment of the Purchase Price;

      (b) the balance of the Purchase Price of RM11,583,000.00 for the Property shall be paid by TNC within 7 days upon commencement of construction works by TNC or its appointed contractors on the Property or within 60 days from the date of issuance of the separate issue document of title to the Property, whichever is earlier.
4.2 Conditions of Disposal

      The sale and purchase of the Property shall be subject to the following conditions:-
      (a) Palmington shall upon execution of SPA or as soon as practicable to apply and to obtain the approval by the relevant authority of the subdivision of the Land and issuance of a separate issue document of title within 12 months from the date of the amended lay-out plan approval or such other extension as may be mutually agreed by Palmington and TNC;

      (b) Palmington deducing a good, registrable and marketable title to the Property;

      (c) the Property shall be free from all encumbrances whatsoever;

      (d) the separate issue document of title to the Property shall be produced and delivered to the TNC or TNC's solicitors upon its issuance; and

      (e) any defect in the title to the Property shall be rectified and perfected by the Palmington at its own cost and expense.

4.3 Failure to Complete Construction

In the event, TNC shall refuse, fail or neglect to complete Phase 1 (build-up area of not less than 250,000 square feet) on the Property within 36 months from the date of commencement of work, Palmington shall be entitled to require :
      (a) TNC to effect the transfer of the Property (if individual title to the Property has been issued and transferred to TNC) back to Palmington (including withdrawal of any private caveat(s) lodged by TNC on the Property and/or the Land) and to redeliver legal possession of the Property to Palmington in exchange for a full refund of the Purchase Price and reimbursements of all construction costs incurred by TNC in relation to the Property up to the date of such failure notice; or
      (b) TNC to deliver all documents which were given to TNC during the execution of the SPA (if individual title to the Property has not been transferred to TNC) back to Palmingtonwith Palmington’s title to the Property intact (including withdrawal of any private caveat(s) lodged by TNC on the Property and/or the Land) and to redeliver legal possession of the Property to Palmington in exchange for a full refund of the Purchase Price and reimbursements of all construction costs incurred by TNC in relation to the Property up to the date of such failure notice;

      and thereafter the SPA shall be null and void and of no further force or effect whatsoever and neither Palmington nor TNC shall have any claims whatsoever against the other.
4. BASIS DETERMINING THE PURCHASE PRICE
      The Purchase Price was arrived at “willing buyer-willing seller” basis after taking into consideration of the prevailing market value and the development potential of the Property.

The Purchase Price will be satisfied in cash and the proceeds will be utilized as working capital of Palmington targeted for repayment of bank borrowing approximately RM5.66 million and remaining for the construction of the said shopping complex.

5. ASSUMPTION OF LIABILITIES
 
      There are no liabilities to be assumed by TNC pursuant to the Disposal.

6. DATE & ORIGINAL COST OF INVESTMENT
 
Date of Investment Original Cost of Investment
04 May 2011 RM10,656,861.00
 
7. RATIONALE

The Disposal is in line with the Group’s strategy to provide a conducive environment in Pearl City which are complemented with entertainment, lifestyle, healthcare and education and is in favour of Palmington as it also benefited from sharing the potential recurring rental income in the future afterTNC developed the Property into a shopping complex and/or such other development.

8. FINANCIAL EFFECTS

8.1 Share Capital and Substantial Shareholdings Structure
      The Disposal will not have any effect on the share capital and substantial shareholdings structure of Tambun Indah.

8.2 Net Assets (NA) and Gearings
      The proforma effect of the Disposal on the NA per share and the gearings of Tambun Indah based on its audited consolidated financial statements as at 31 December 2012 and assuming that the Disposal had been completed on 31 December 2012 is set out below:
Audited as at
31 December 2012
RM’000
After the Disposal
RM’000
Share capital
155,421
155,421
Reserves
67,793
68,390
Total equity attributable to shareholders of the Company / NA
223,214
223,811
No. of ordinary shares
310,843
310,843
NA per share
0.72
0.72
Bank borrowing
83,825
78,165
Gearing ratio (times)
37.55%
34.92%

Note :
    After taking into consideration the consolidated gain (net of tax) from the Disposal of approximately RM597,600.00 and the repayment of bank borrowings of approximately RM5.66 million.

8.3 Earnings and earnings per share
    Based on the audited net book value of the Property as at 31 December 2012, the Disposal is expected to generate a net gain of RM597,600.00 to Tambun Indah Group. This represent a consolidated net gain per share of approximately 0.22 sen (computed based on the Company’s weighted average number of shares of 273,367,924 as at 31 December 2012).

9. DIRECTORS' AND MAJOR SHAREHOLDERS' INTEREST
    Save for common directorships, none of the directors and/or major shareholders of Tambun Indah and/or persons connected with them have any interest, either direct or indirect in the Disposal.
10. APPROVALS REQUIRED
    The Disposal is not subject to the approval of shareholders of Tambun Indah.

11. ESTIMATED TIME FRAME FOR COMPLETION
    Barring unforeseen circumstances, the Disposal is expected to be completed by 31 December 2014.

12. STATEMENT BY THE BOARD OF DIRECTORS
    After having considered all aspects of the Disposal including the rationale, the Board is of the opinion that the Disposal is in the best interest of the Company.
13. HIGHEST PERCENTAGE RATIO APPLICABLE
    The highest percentage ratio applicable to the set-up pursuant to Paragraph 10.02(g) of the Main Market Listing Requirements of Bursa Securities is 5.77%.

14. DOCUMENTS AVAILABLE FOR INSPECTION
    The Sale and Purchase Agreement is available for inspection at the registered office of Tambun Indah at 51-21-A, Menara BHL Bank, Jalan Sultan Ahmad Shah, 10050 Penang during normal business hours on Mondays to Fridays (except public holidays) for a period of 3 months from the date of this announcement.


This announcement is dated 28 May 2013.