Main>2006>Proposed Acquisition of Land in Shanghai, China - Bursa
General Announcement
Reference No HR-060120-63557
Company Name
:
HAISAN RESOURCES BERHAD
Stock Name
:
HAISAN
Date Announced
:
20/01/2006
Type
:
Announcement
Subject
:
PROPOSED ACQUISITION OF LAND IN SHANGHAI, CHINA
Contents :
1) INTRODUCTION
The Board of Director of Haisan Resources Berhad ("HRB or Company") wishes to announce that on 18 January 2006, Iglo International Limited, ("Iglo International or Purchaser"), a wholly-owned subsidiary of the Company entered into a Sale and Purchase Agreement ("SPA") with Shanghai Pities North Industrial Zone Investment & Development Co. Ltd ("SID or Vendor.") for the acquisition of a parcel of 50-year leasehold vacant industrial land measuring approximately 55 Mu, (equivalent to 36,667 square metre) situated in Shanghai Minhang area pities north industrial district 7 land parcels ("Land"). The cash consideration for the Land is Chinese Renminbi ("RMB") 21,000,000 equivalent to approximately RM9,870,000 based on exchange rate of RM0.47:RMB1.00. ("Proposed Acquisition")
2) DETAILS OF THE PROPOSED ACQUISITION
a) Description of the Land
The Land is located at Shanghai Minhang area pities north industrial district 7 land parcels. The Land measures 55 Mu (equivalent to 36,667 square metre), including land area which is subject to compulsory acquisition.
The Land has been designated for industry construction and has a leasehold tenure of 50 years commencing from the date the receipt of the People Republic of China National Land Use Certificate.
The Land shall be used for construction of Temperature-controlled facility ("TCL") and processing facilities.
b) Purchase consideration
The purchase consideration of RMB21,000,000 was arrived at on a willing buyer and willing seller basis after taking into consideration estimated market value. Independent valuation was not carried out for the Proposed Acquisition.
c) Salient points of the SPA
Iglo International shall pay the purchase consideration in accordance with the Shanghai Minhang Area House Land Administration Bureau's rules and the terms and conditions of the SPA, as follow:-
i) A sum of RMB10,500,000, being 50% of the purchase consideration to be paid as deposit within 14 days after the execution of the SPA;
ii) A sum of RMB4,200,000, being 20% of the purchase consideration to be paid within 5 working days after the execution of the land transfer agreement for the transfer of Land between Iglo International and Shanghai Minhang Area House Land Administration Bureau;
iii) The balance of RMB6,300,000, being 30% of the purchase consideration to be paid within 60 working days after the execution of the land transfer agreement for the transfer of Land between Iglo International and Shanghai Minhang Area House Land Administration Bureau; and
iv) All payment for the purchase consideration for the Land shall be computed in accordance with the measurement carried out by Shanghai Minhang Area House Land Administration Bureau, and any excess of payment shall be refunded and any deficit of payment shall be topped up.
The Land shall be transferred free from charges, encumbrances and with vacant possession.
3) DETAILS OF VENDOR
SID is a limited liability company incorporated in China and its registered office is No. 1289, Road Huaxing, Minhang District. The registered capital is RMB50,000,000. Principal activities of the company are project investment & development, property management and conservation of landscaping.
SID is a government established body in Shanghai for the purpose of disposal of government-owned land to potential investors for development purpose.
4) RATIONALE FOR THE PROPOSED ACQUISITION
The Proposed Acquisition is to facilitate the construction of TCL facility in Shanghai, which is part of the Group's continuous expansion plan. Coupled with the Group's existing operation in Guangzhou, the proposed facility in Shanghai shall be the second setup in China which will enhance the Group's presence to tap into the growing market in China.
Stimulated by the rapid economic growth, China's increasingly affluent consumers are demanding a wider variety of food products, more processed food, and more convenient food. Hence, this translated into a rising demand for TCL services and currently, the country does not have sufficient quality TCL facilities to cater for the influx of food products that require such services. Therefore, the facility in Shanghai is strategically position to capitalize on this opportunity.
5) COMPLETION DATE
The estimated time frame for the completion of the Proposed Acquisition is within 9 months from the execution of the SPA.
6) FINANCIAL EFFECTS OF THE PROPOSED ACQUISITION
a) Share capital and shareholding structure
The Proposed Acquisition will not have any effect on the share capital and shareholding structure of HRB.
b) Earnings and net tangible asset per share
The Proposed Acquisition will not have any material impact on the earnings and net tangible asset per share of HRB for the financial year ending 31 December 2006.
c) Purchase Consideration
The Purchase Consideration shall be funded by internally generated funds.
7) DIRECTORS' AND SUBSTANTIAL SHAREHOLDERS' INTERESTS
None of the Directors and/or Substantial shareholders of HRB and/ or persons connected with them have any interest, direct or indirect, in the Proposed Acquisition.
8) DIRECTORS' STATEMENT
The Directors of HRB after having considered the terms of the Proposed Acquisition are of the opinion that the aforesaid transaction is fair and reasonable and is in the best interest of the Company.
9) APPROVAL
The Proposed Acquisition has not departed from the Securities Commission's Policies and Guidelines on Issue /Offer of Securities and is not subject to the approval of shareholders of HRB.
10) DOCUMENTS FOR INSPECTION
The SPA is available for inspection at the registered office of the Company at Lot 506, Jalan Pelabuhan Utara, Bandar Sultan Suleiman, 42000 Port Klang, Selangor Darul Ehsan during normal business hours on any working days.
