General Announcement

30/07/2007

DAYA MATERIALS BERHAD ("DMB" OR "THE COMPANY") · PROPOSED ACQUISITION OF SECA DYME SDN BHD; · PROPOSED PRIVATE PLACEMENT; AND · PROPOSED INCREASE IN THE AUTHORISED SHARE CAPITAL (COLLECTIVELY REFERRED TO AS THE "PROPOSALS")

DAYA MATERIALS BERHAD

Type

Announcement
SubjectDAYA MATERIALS BERHAD ("DMB" OR "THE COMPANY")

· PROPOSED ACQUISITION OF SECA DYME SDN BHD;
· PROPOSED PRIVATE PLACEMENT; AND
· PROPOSED INCREASE IN THE AUTHORISED SHARE CAPITAL

(COLLECTIVELY REFERRED TO AS THE "PROPOSALS")

Contents :

We refer to our announcement dated 23 August 2006 whereby we announced that the Company had entered into a sale and purchase agreement with Dato' Mazlin Bin Md Junid (Dato Mazlin) and Dato Muhammad Junid Bin Muhammad Yusof (Vendors) in respect of the proposed acquisition of 1,008,000 ordinary shares of RM1.00 each representing the entire issued and paid-up share capital of Seca Dyme Sdn Bhd (SDSB) for a purchase consideration of RM24,000,000 to be satisfied via issuance of 83,565,217 new ordinary shares of RM0.10 each in DMB (DMB Shares) at an issue price of RM0.23 per new DMB Share and cash consideration of RM4,780,000 (Proposed Acquisition of SDSB).


The said agreement was subsequently amended vide the Supplemental Sale and Purchase Agreement dated 27 September 2006, Variation of Terms and Conditions of the Sale and Purchase Agreement dated 9 January 2007 and Supplemental Sale and Purchase Agreement dated 27 February 2007. The said sale and purchase agreement together with the said supplemental agreements shall collectively be referred to as the SPA.

In this respect, on behalf of the Board of Directors of DMB, MIMB Investment Bank Berhad is pleased to announce that the Company had on 26 July 2007 entered into a stakeholder agreement with CIMB Group Nominees (Tempatan) Sdn Bhd as the stakeholder (Stakeholder) and Vendors (Stakeholder Agreement) pursuant to the terms of the SPA.

The salient terms of the Stakeholder Agreement, inter-alia, are as follows:-

a) In accordance with the SPA, the Vendors shall on the completion date, deposit up to 83,565,217 DMB Shares (Deposit Shares) for the purpose of securing the full performance by Dato Mazlin of all his obligations under the guarantee by Dato Mazlin of the audited consolidated profit before tax of SDSB Group of RM4,000,000 per year for each of the financial years ending 31 December 2006, 31 December 2007 and 31 December 2008 (Profit Guarantee).

b) At all times during the continuance of the Stakeholder Agreement, Dato Mazlin shall procure and ensure that the aggregate market value of the Deposit Shares deposited shall be maintained at 1.3 times the Profit Guarantee or such part thereof not yet fulfilled (Agreed Value).

c) DMB may submit a request in writing to Dato Mazlin requesting him to deposit such number of shares as may be required to ensure that the aggregate market value of the Deposit Shares is maintained at the Agreed Value.

d) In the event that the aggregate market value of the Deposit Shares exceeds the Agreed Value on the relevant last market day of every calendar week, the Stakeholder will, upon the written request of the Company, release such part of the Deposit Shares which are in excess of the Agreed Value as shall be determined by the Company.

e) In the event that SDSB Group suffers or incurs losses and/or fails to achieve the Profit Guarantee in any financial years therein guaranteed, Dato Mazlin covenants, agrees and undertakes that within fourteen (14) business days from the date of receipt of a written demand from the Company (a copy of which shall be forwarded by the Company to the Stakeholder), the amount of the losses and the amount under the Profit Guarantee or the shortfall between the audited profit before tax of SDSB Group for the said financial years and the amount under the Profit Guarantee.

f) In the event that:-

      i. Dato Mazlin shall fail, neglect and/or refuse to make payment of the relevant shortfall; or
        ii. the Vendors are liable to indemnify the Company
        the Company shall immediately give written notice thereof to the Stakeholder (Disposal Notice) whereupon the Stakeholder is expressly, irrevocably and unconditionally required, authorised and empowered to inter alia, sell or otherwise dispose of all or such portion of the Deposit Shares and at such a price as shall be stipulated by the Company in order to achieve the amount of the relevant shortfall or the amount of indemnity as stipulated in the Disposal Notice, in accordance with the provisions of the Stakeholder Agreement.
    g) The proceeds of any sale or disposal of the Deposit Shares shall be applied by the Stakeholder in the following manner:-
        i. firstly, in payment of all necessary, incidental and/or ancillary costs, expenses and fees incurred in respect of or arising from the sale or disposal of the Deposit Shares; and
          ii. secondly, in payment to the Company to meet the relevant shortfall or the amount of indemnity, as the case may be, and as stipulated in the Disposal Notice,
          and the balance remaining thereafter (if any) shall be paid to the Vendors in the manner and proportion set out in the Disposal Notice.

      This announcement is dated 30 July 2007.


      Announcement Info

      Company NameDAYA MATERIALS BERHAD (MESDAQ Market) 
      Stock Name DAYA
      Date Announced30 Jul 2007  
      CategoryGeneral Announcement
      Reference NoMM-070730-54904



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