| Contents | We refer to Bursa Malaysia Securities Berhad's letter dated 22 December 2010 in respect of the above matter and the Board of Directors of AMPROP wishes to clarify and answer the queries as follows:
1. The consideration in Ringgit Malaysia (RM) equivalent
The purchase consideration of the Proposed Acquisition in Ringgit Malaysia equivalent is approximately RM36 million; based on an exchange rate of Ð1 : RM4.9438. The final amount in RM terms will depend on the exchange rate at the point of conversion of funds to GBP to complete the transaction.
2. The salient features of the Contract
The salient features of the Contract For Sale of Freehold Land ("Contract") with Abaca Services Limited ("ABACA") are as follows:
" 10% (Ð730,000) of the purchase consideration was paid upon exchange of contract with the balance 90% (Ð6,570,000) to be paid on the completion date which is expected to be on 20 January 2011.
" The vendor, ABACA will transfer a freehold property at 101, Lexham Gardens, London W8 6JN, United Kingdom ("the Property") to Riverich Limited ("RIVERICH"), a wholly-owned subsidiary of AMPROP with full title guarantee and free from encumbrances on completion date.
" On completion date, ABACA will assign to RIVERICH all rights in relation to the occupational leases with existing tenants and service contracts relating to the upkeep and maintenance of the Property.
3. The principal activity of ABACA and names of its directors
To the best of our knowledge, the principal activity of ABACA is investment holding and that it was set up specifically to hold the Property. We are not aware of the identities of the directors of ABACA.
4. The risk in relation to the Proposed Acquisition
Investment Risk
As the Property is an investment, the Group will be subject to fluctuation in property prices and rental rates in London. However, the Board believes the Property is acquired at a discount to comparable properties in the area and rental rates generally move upwards over time.
Liquidity Risk
The entire purchase consideration will initially be funded solely from advances from AMPROP.
Thereafter, a GBP-denominated loan to partially re-finance the Proposed Acquisition will be arranged. AMPROP has adequate financial resources available to cover this commitment and its own operating requirements.
Currency Risk
As the Property is located in London, the Property is subject to currency fluctuation. The GBP-denominated loan to partially re-finance the Proposed Acquisition will serve as a natural hedge against currency risk.
5. Property details
a) The details of the rental returns
The current rental per annum is approximately GBP 268,000 and save for one vacant unit, the Property is otherwise fully tenanted.
Once the vacant unit is tenanted, the rental income and yield from the Property will increase accordingly.
The existing tenancies are short tenancies of 12 months with about 60% of the tenancies of the Property expiring in the latter half of 2011.
b) Approximate age of the property
The Property is a Victorian period terrace property and was last reconstructed in 2004 with only the front faзade and the flank walls retained.
A building surveyor was appointed by AMPROP to conduct a survey of the building prior to exchange of contract, with the building surveyor indicating no material defects that would otherwise warrant them to caution AMPROP against proceeding with the Proposed Acquisition.
c) Independent Valuation
A survey of similar and comparable property in the location was conducted prior to the acquisition and they have indicated that the acquisition price is at a discount to market. A formal valuation will be performed at the point of obtaining the financing.
6. Whether the acquisition of the residential properties will be free from any encumbrances
The Property will be transferred to RIVERICH free from encumbrances.
This announcement is dated 23 December 2010 |
| Query Letter Content | We refer to your announcement dated 21 December 2010 ("Announcement"), in
respect of the aforesaid Proposed Acquisition.
In this connection, kindly furnish Bursa Malaysia Securities Berhad with the
following additional information for public release:
1. The consideration of the Proposed Acquisition in Ringgit Malaysia (RM)
equivalent
2. The salient features of the Contract For Sale of Freehold Land ("Contract")
with Abaca Services Limited ("ABACA")
3. The principal activity of ABACA and names of its directors
4. The risk in relation to the Proposed Acquisition
5. The description of the property, as follows:
a) The details of the rental returns
b) Approximate age of the property
c) Whether any valuation was carried out on the property, if so, the name
of the independent registered valuer, date
and method of valuation and quantification of the market value
6. Whether the acquisition of the residential properties will be free from any
encumbrances
Please furnish Bursa Securities with your reply within one (1) market day from
the date hereof.
Yours faithfully
KHOO KAY KWAN
Head, Issuers
Listing Division
Regulation
KKK/ALC
Copy to: General Manager & Head, Market Surveillance Department, Securities
Commission (via fax)
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