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发表于 15-11-2011 07:56 PM
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Pursuant to Paragraph 10.09(1)(b) of the Main Market Listing Requirements of Bursa Securities Malaysia Berhad (“Listing Requirements”), Harvest Court Development Sdn Bhd (“HCDSB”), a wholly-owned subsidiary of Harvest Court Industries Berhad (“HCIB” or “the Company”) will be entering into a Related Party Transaction (“RPT”) with 1Green Enviro Sdn. Bhd. (“1GE”) pursuant to the Letter of Intent (“LOI”) dated 14 November 2011 accepted by HCDSB on 14 November 2011 for the Design, Procurement, Manufacture, Construction & Commissioning of the Proposed Pulp & Paper Plant to Process Oil Palm EFP at PT 1451 HS(D) 11839, Mukim Serting Ulu, Daerah Jempol, Negeri Sembilan, (“the Project”). The said LOI is not a binding agreement. The contract amount is subject to the maximum of RM70,000,000 for a duration of 12 months for Package 1 and 24 months for Package 2.
The details of the RPT are as stated in the table below: -
Name of Related Parties
Nature of RPT
The Contract Amount
(RM)
1Green Enviro Sdn. Bhd.
Design, Procurement, Manufacture, Construction & Commissioning of the Proposed Pulp & Paper Plant to Process Oil Palm EFB at PT 1451 HS(D) 11839, Mukim Serting Ulu, Daerah Jempol, Negeri Sembilan
Package 1 :
Package 2 :
Maximum of 70,000,000 :-
20,000,000
50,000,000
The Project is the Proposed Pulp & Paper Plant to Process Oil Palm EFB at PT 1451 HS(D) 11839, Mukim Serting Ulu, Daerah Jempol, Negeri Sembilan (“1Green Enviro Project”). 1GE confirmed that the total project value is estimated to be RM200.0 million which consists of 3 packages for a total targeted production capacity of up to 70,000 MT. The LOI is only for the Package 1 and 2 of which Package 1 amounting to RM50.0 million which involves providing production facilities for 15,000 MT Capacity and Package 2 amounting to RM20.0 million which involves upgrading the production facilities to 25,000 MT Capacity. The total size of the plant is around 150,000 square feet on 10 acres land.
Package 3 is not within the scope of this LOI. As informed by 1GE, Package 3 will be a separate production line of 45,000 MT capacities, to be commenced upon completion of Package 1 & 2. The gross and net profit margin for the said Packages is estimated at 15.7% and 11.8%, respectively from the contract amount respectively.
Package 1 of said Project is expected to be commenced one month after obtaining approval of HCIB’s shareholders at an EGM to be convened. Package 2 shall be commencing in the following year.
As provided by 1GE, the proposed site has been finalized and will be submitted to Majlis Daerah Jempol by end of December 2011.
There was no salient point pertaining to LOI. The scope of works by HCDSB includes Fibre Preparation Facilities, Pulp Processing Facilities, Paper Making Facilities, Raw Water Treatment Plant, Waste Water Treatment Plant, Steam Generation Facilities, Complete Factory & All Ancillary Buildings, Complete M&E Services, Complete Factory External Works and Testing & Commissioning. HCIB has already in manufacturing business for the past 30 over years has adequate capacity & expertise to undertake the project. The design, manufacture, installation, testing and commissioning of pulp and paper production line and equipment will be awarded by HCIB as an EPC Contract to Shanxi Zhisen Pulp & Paper Engineering Co. Ltd. (“Zhisen”). A 12 months warranty period on production equipment will be given by Zhisen upon commissioning. The balance of equipment and facilities such as boiler, water treatment equipment, EOT Crane and etc will be sourced locally. HCIB will undertake the project management role as well as C&S and M&E works for the factory construction.
Zhisen is a company incorporated in China and having its business address at Room 703, Block B, Weilan International, No. 3, Daqing Road, Xi’an, 71002, People’s Republic of China. They specialize in Pulp & Paper equipment and undertake EPC contracting for setting up pulp & paper plant. The President of the company is Mr. Bian Jing.
The capital requirement for said Project shall be RM6,000,000.00 based on monthly progress claims. The Project will be financed by the proceeds from the Proposed New Right Issue and Placement exercise to be undertaken by the Company and the bank borrowing which had not been determined by the Company. The Proposed Right Issue with Warrants which announced on 13 July 2011 will be utilised for the timber business of the Company.
INFORMATION OF 1GE
1GE is a company incorporated in Malaysia where the principal activities is manufacturing of pulp and paper biomass. The directors and shareholders of 1GE are as follows: -
(a) Directors
i) En Mohd Nazifuddin bin Dato’ Sri Mohd Najib;
ii) Datuk Raymond Chan Siew Boon; and
iii) Mr Tan Tiang Lai
(b) Shareholders
Name
%
i)
Paramount Billion Sdn Bhd
93%
ii)
Green Patent Technologies Sdn. Bhd.
7%
100%
En. Mohd Nazifuddin bin Dato’ Sri Mohd Najib, Datuk Raymond Chan Siew Boon and Mr Lim Thiam Huat are also the major shareholders of Paramount Billion Sdn Bhd where together they hold about 60% of total and issued paid up capital of Paramount Billion Sdn Bhd.
RATIONALE OF RPT
The principal activity of HCDSB is involved in construction. The rational for HCDSB to enter the RPT is to take advantage of new business opportunities. The RPT is meeting the business needs of HCIB Group at the best possible terms and is expected to generate positive recurring income to the Group. These would ultimately benefit the HCIB Group and the shareholders by enhancing profitability and returns on shareholders’ funds.
RISK FACTOR
The risk of the RPT includes non-payment from client, funding for project working capital and to obtain relevant resources for the Project.
The Board of Directors of HCIB will continue to exercise due care in considering the risks and will take appropriate measures to mitigate such risks.
EFFECT OF RPT ON HCIB GROUP
The RPT are not expected to have any significant effect on the earnings per share, net assets per share, gearing, share capital and substantial shareholders’ shareholding of HCIB. However, the RPT is expected to contribute positively to the earnings of the HCIB group.
THE NATURE AND EXTENT OF THE INTERESTS OF THE INTERESTED DIRECTORS AND MAJOR SHAREHOLDERS
Datuk Raymond Chan Boon Siew and Mohd Nazifuddin Bin Dato' Sri Najib, the directors and shareholders of HCIB with 15.7% and 2.2% shareholding in HCIB respectively, is also the director and shareholder of 1Green Enviro Sdn Bhd.
Accordingly, Datuk Raymond Chan Boon Siew and Mohd Nazifuddin Bin Dato' Sri Najib will abstain from all deliberation and voting on matters relating to the RPT at Board meetings and will abstain from voting in respect of his direct and/or indirect shareholdings in HCIB at the forthcoming Extraordinary General Meeting (“EGM”) to be convened on the resolution to approve the said RPT.
Other than above disclosed, none of the Directors or major shareholders or persons connected to the Directors or major shareholders has any direct or indirect interest in the RPT.
APPROVAL REQUIRED
The RPT is subject to the approval of HCIB’s shareholders at an EGM to be convened and the said EGM is tentatively to be held by December 2011.
STATEMENT BY DIRECTORS
The Project was proposed by 1GE to HCIB and subject to finalisation of the terms and conditions in the Contract Agreement to be signed within 14 days from 14 November 2011 and all the terms and condition in the Contract Agreement has yet to be deliberated by the Audit Committee or Board of Directors of the Company. The RPT will be deliberated by the Board of Directors at the later stage and once the Board arrive at the decision, the Company will make further announcement.
STATEMENT BY AUDIT COMMITTEE
Upon receipt of Draft Contract Agreement, the Audit Committee shall consider and make its finding to the Board of Directors for further deliberation. The RPT will be deliberated by the Audit Committee at the later stage and will make further announcement in due course.
PERCENTAGE RATIO
The highest percentage ratio applicable to the RPT pursuant to paragraph 10.02(g) of the Main Market Listing Requirement is 335.57%.
This announcement is dated 14 November 2011. |
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