General Announcement
02/04/2003ENGTEX GROUP BERHAD (ENGTEX OR COMPANY) · PROPOSED SHAREHOLDERS MANDATE FOR RECURRENT RELATED PARTY TRANSACTIONS
ENGTEX GROUP BERHAD |
Type | Announcement |
Subject | ENGTEX GROUP BERHAD (ENGTEX OR COMPANY) · PROPOSED SHAREHOLDERS MANDATE FOR RECURRENT RELATED PARTY TRANSACTIONS |
Contents :
1. INTRODUCTION
- AmMerchant Bank Berhad (formerly known as Arab-Malaysian Merchant Bank Berhad) ("AmMerchant Bank"), on behalf of the Company, wishes to announce that the Company wishes to seek approval from its shareholders in respect of the Proposed Shareholders' Mandate pursuant to paragraph 10.09 of the Kuala Lumpur Stock Exchange ("KLSE") Listing Requirements ("Listing Requirements").
2.1 Introduction
Paragraph 10.09 of the Listing Requirements stipulates that a listed issuer is allowed to seek shareholders mandate in respect of recurrent related party transactions of a revenue or trading nature which are necessary for the day-to-day operations of the listed issuer and its subsidiaries and are in the ordinary course of business and on terms not more favourable to the related party than those generally available to the public. Where a listed issuer has obtained such a mandate, the requirements of paragraph 10.08 of the Listing Requirements shall not apply to the recurrent related party transactions, which are comprised in the mandate. This means, during the period of validity of the mandate, the obligation to make immediate disclosure, as well as the obligation to procure shareholders approval shall not apply to the recurrent related party transactions, which are comprised in the mandate.
The Board of Directors of Engtex (Board) therefore proposes to seek a mandate from the shareholders of the Company to enable Engtex and its subsidiaries (Group) to enter into recurrent related party transactions without the necessity of making the otherwise required announcement and approval.
The Company is principally an investment holding company. The Groups principal activities are broadly categorized into the following:
· Distribution and wholesale of pipes, valves, fittings, plumbing materials, steel related and general hardware products; and
· Manufacturing of steel pipes, valves, fittings, bitumen products, ductile iron valves and fittings, pipe asphalt/coatings, hydrants, manhole covers, welded wire mesh and hard drawn wire.
It is anticipated that the Group would, in the ordinary course of business, enter into transactions with the related parties as set out in Table 1 (Related Parties) and that such transactions will occur with some degree of frequency and could arise at any time.
The Board is seeking the approval from the shareholders which will allow the Group, in their ordinary course of business, to enter into recurrent related party transactions of a revenue or trading nature with the Related Parties ("Recurrent Transactions") provided such transactions are made at arms length and on normal commercial terms of the Group and are on terms not more favourable to the Related Parties than those generally available to the public and are not to the detriment of the minority shareholders.
The Recurrent Transactions which are covered by the Proposed Shareholders' Mandate are set out in Table 1.
3. RATIONALE OF THE PROPOSED SHAREHOLDERS MANDATE
The Recurrent Transactions entered or to be entered into by the Group with the Related Parties are all in the ordinary course of business. They are recurrent transactions of a revenue or trading nature, which are likely to occur with some degree of frequency and arise at any time and from time to time. These transactions may be constrained by the time-sensitive nature and confidentiality of such transactions, and it may be impractical to seek shareholders approval on a case to case basis before entering into such related party transactions. Therefore, the Board is seeking an approval from the shareholders for the Proposed Shareholders Mandate pursuant to Paragraph 10.09 of the new KLSE Listing Requirements to allow the Group to enter into such Recurrent Transactions made on an arms length basis and on normal commercial terms.
The obtaining of shareholders approval for the Proposed Shareholders Mandate and the renewal of such approval on an annual basis would eliminate the need to convene separate general meetings from time to time to seek shareholders approval and when potential Recurrent Transactions with the Related Parties arise, thereby reducing substantially administrative time, inconvenience and expenses in convening such meetings, without compromising the corporate objectives and adversely affecting the business opportunities available to the Group.
The Recurrent Transactions of a revenue or trading nature undertaken within the Group are mainly to support its day-to-day operations. The Related Parties are both good customers and reliable suppliers and the transaction prices are determined by way of negotiation in the ordinary course of business and upon normal commercial terms.
The Recurrent Transactions are expected to enhance the Groups business operations via the established relationship between the Group and the Related Parties. Such relationship will also ensure that Engtex Group will continue to have support of procurement of goods of required quality and likewise, ensuring its products are of high quality to meet its customer requirements.
As the Recurrent Transactions are carried out in the ordinary course of business and on normal commercial terms which are not more favourable to the Related Party than those generally available to the public, the effect of such transactions on the EPS, NTA per share, share capital in Engtex is not expected to be different from similar transactions with a non-related party. Accordingly, the Proposed Shareholders Mandate is not expected to have any effect on the issued and paid-up share capital, net tangible assets per share and earnings per share of the Company.
Ng Hook, Ng Chooi Guan, Ng Yik Soon and Yap Seng Kuan are the Managing Director and Executive Directors of Engtex respectively. Ng Hook, Ng You Chai, Ng Chin Man, Ng Chooi Guan, Ng Ai Swee, Ng Ah Leong and Ng Yik Soon are the direct and indirect major shareholders of Engtex.
The abovementioned interested Directors have abstained and will continue to abstain from all deliberations and voting in respect of the Proposed Shareholders Mandate at all relevant Engtex Board meetings.
Save as disclosed above, none of the other Directors and/or major shareholders or all persons connected to the Directors and/or major shareholders of Engtex have any interest, either direct or indirect, in the Proposed Shareholders Mandate.
The Directors of Engtex, having taken into consideration all aspects of the Proposed Shareholders Mandate, are of the opinion that the Proposed Shareholders Mandate is in the best interest of the Company and its shareholders.
A circular containing further information on the Proposed Shareholders' Mandate will be issued to the shareholders of Engtex in due course.
This announcement is dated 2 April 2003.
Attachmentsancmt-rrpt Table 1.doc |
Announcement Info
Company Name | ENGTEX GROUP BERHAD |
Stock Name | ENGTEX |
Date Announced | 2 Apr 2003 |
Category | General Announcement |
Reference No | MM-030402-59556 |
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