Contents :
1.0 INTRODUCTION
The Board of Directors of CHHB is pleased to announce that CHHB had on 23 March 2000 entered into a Sale and Purchase of Shares Agreement with Essex Venture Sdn Bhd ("EVSB") for the disposal of 70,000 ordinary shares of RM1.00 each representing 70% of the total issued and paid up capital of Kit Homes Sdn Bhd ("Proposed Disposal") for a total consideration of RM113,057.62 which represents 70% of the net tangible assets (NTA) value of Kit Homes Sdn Bhd and its Group of RM161,510.88.
2.0 DETAILS OF THE PROPOSED DISPOSAL
2.1 Kit Homes Sdn Bhd ("KHSB") has the following subsidiaries :-
a. 1,000,000 ordinary shares of RM1.00 each representing 100% of the total issued and paid up capital of Kit Homes (Mauritius) Sdn Bhd ("KHM") at the NTA of RM(182,309.00);
b. 7,500 ordinary shares of 100 Rupees each representing 75% of the total issued and paid up capital of Malaysian Products Centre (Mauritius) Co. Limited ("MPC") at the NTA of RM176,849.66 ;
c. 15,000 ordinary shares of 100 Rupees each representing 75% of the total issued and paid up capital of Country Heights (Mauritius) Co. Limited. ("CHM") at the NTA of RM103,725.22 ; and
2.2 Background on KHSB and its subsidiaries
a. KHSB was incorporated in Malaysia on 10 January 1984 as a private limited company. It has an authorised capital of RM200,000 divided into 200,000 ordinary shares of RM1.00 each of which 100,000 ordinary shares have been fully issued and fully paid up. Based on the management accounts of CHHB for the financial period up to 29 February 2000, the NTA value of KHSB stood at RM100,000.
b. KHM was incorporated in Malaysia on 1 June 1993 as a private limited company. It has an authorised capital of RM5,000,000 divided into 5,000,000 ordinary shares of RM1.00 each of which 1,000,000 ordinary shares have been fully issued and fully paid up. KHSB is the registered and/or absolute beneficial owner of 1,000,000 ordinary shares representing 100% of the issued share capital of KHM. Based on the management accounts of CHHB for the financial period up to 29 February 2000, the NTA value of KHM stood at RM(182,309.00).
c MPC was incorporated in Mauritius on 21 September 1992 as a private limited company under the Mauritius law. It has an authorised capital of 1 million Rupees divided into 10,000 ordinary shares of 100 Rupees each of which 10,000 shares have been fully issued and fully paid or credited as fully paid. KHSB is the registered and/or absolute beneficial owner of 7,500 ordinary shares representing 75% of the issued share capital of MPC. Based on the management accounts of CHHB for the financial period up to 29 February 2000, the NTA value of MPC stood at RM176,849.66.
d CHM was incorporated in Mauritius on 11 January 1993 as a private limited company under the Mauritius law. It has an authorised capital of 2 million Rupees divided into 20,000 ordinary shares of 100 Rupees each of which 20,000 shares have been fully issued and fully paid or credited as fully paid. KHSB is the registered and/or absolute beneficial owner of 15,000 ordinary shares representing 75% of the issued share capital of CHM. Based on the management accounts of CHHB for the financial period up to 29 February 2000, the NTA value of CHM stood at RM103,725.22.
e. The principal activities of KHSB and the Group are that of housing contactors and project management consultants.
2.3 Basis of consideration
The total disposal consideration amounting to RM113,057.62 was arrived at based on the NTA of KHSB and its Group's management accounts as at 29 February 2000.
2.4 Rationale for the Proposed Disposal
The Proposed Disposal is due to the completion of the low cost project in Mauritius. CHHB will not be undertaking any further low costs projects overseas. Any overseas venture by the CHHB Group will be in the high end sector like our Excel in London and Pecanwood in South Africa. However, CHHB will still continue to focus on low cost projects in Malaysia under the concept of Pangsa Rakyat.
2.5 Utilisation of proceeds
The cash proceeds realised from the Proposed Disposal will be utilised as working capital for CHHB Group.
2.6 CHHB reserves the right to purchase from KHSB, 300,000 ordinary shares of RM1.00 each and 1,860,000 preference shares of RM1.00 each representing 20% of the total issued and paid up capital of Malaysian Construction Ventures (Overseas) Sdn Bhd for a total consideration of RM1.00.
3.0 FINANCIAL EFFECTS OF THE PROPOSED SALE
The financial effects of the Proposed Disposal on the issued and paid up Share Capital, Earnings Per Share (EPS) and Net Tangible Assets ("NTA") of CHHB are summarised as below :-
3.1 On Share Capital
The Proposed Disposal will not have any effect on the issued and paid-up share capital as it does not involve the issue of any new CHHB shares.
3.2 On EPS
The Proposed Disposal is not expected to have a material effect on the earnings of the CHHB Group for the current financial year ending 31 December 2000.
3.3 On NTA
The Proposed Disposal is not expected to have a material impact on the NTA of CHHB at company and Group levels for the financial year ending 31 December 2000.
4.0 APPROVALS TO BE SOUGHT
The Proposed Disposal is subject to the approvals from the relevant authorities, if any.
5.0 DIRECTORS' AND SUBSTANTIAL SHAREHOLDERS' INTERESTS
None of the Directors or substantial shareholders or persons connected/related to the directors and/or substantial shareholders of CHHB, have any interest, direct or indirect in the Proposed Disposal.
6.0 DIRECTORS' STATEMENT
The Board of Directors is of the opinion that the Proposed Disposal is in the best interest of the Company.