Contents :
1. Introduction
The Board wishes to announce that on 4th February 2002, DRP, a 70% owned subsidiary of KRI has entered into a Sale and Purchase Agreement ("Agreement") to dispose of the Property more particularly described below, to SCH for a total consideration of RM1,260,000 (Ringgit Malaysia One Million Two Hundred Sixty Thousand Only).
The DISPOSAL represents 1.69% of the Net Tangible Asset (NTA) of the Kossan Group based on the audited accounts as at 31 December 2000.
2. Information on the Property
The Property consists of a piece of industrial land held under HS (D) 52226 PT No 11619 Mukim and Daerah Klang together with 1 unit 1-1/2 storey semi-detached factory, currently used by DRP as its factory.
3. Particulars of the Disposal
The Property
The disposal price of the Property , RM1,260,000, is payable as follows:-
a. a sum of 10% of the disposal price is payable by SCH as a forfeitable deposit and as part payment upon the execution of the Agreement; and
b. the balance 90% of the disposal price is payable on or before the completion date of the Agreement which is 90 days of the signing of the Agreement with an option to extend by a further 30 days, exercisable by SCH
4. Conditions Precedent
The completion of this Agreement is not subject to the approvals of any authorities or the shareholders of KRI.
5. Basis and satisfaction of purchase consideration
The sale consideration on the disposal of the Property was arrived at on a willing buyer willing seller basis and on an as is where is basis but without any formal valuation being carried out on the property. The sale consideration will be fully satisfied in cash.
6. Cost of Purchase
DRP acquired the property on 25.11.94 for RM960,954.50.
7. Utilisation of Sale Proceeds
The proceeds from the disposal will be used as additional working capital.
8. Rationale for the Disposal
DRP is expanding its business operations and the existing premise is not sufficient to accommodate the increased business activities. DRP intends to move, and to rent a bigger premise upon completion of the sale to accommodate its expansion program.
9. Financial Effect of the Disposal
Upon completion of the DISPOSAL, the NTA and the earnings per share of the Group will be increased by RM275,279 ( 0.37%) (after providing for real property gain tax of RM10,467.00) and RM0.0053 per share respectively. There is no effect on the share capital or on the substantial shareholders.
10. Information on SCH
a) Date and Place of Incorporation : 6th December 1983, Kuala Lumpur
b) Authorised Capital : RM1,000,000.00
c) Issued and Paid-up Capital : RM300,000.00
d) Principal Activities : Investment Holdings
e) Directors : 1) Wong Ah Kow
2) Siaw Kim Kee
f) Shareholders & % of shareholdings : 1) Wong Ah Kow - 20 %
2) Wong Chiun Wen - 20 %
3) Wong Chiun Chian - 20 %
4) Wong Wei Yee - 20 %
5) Siaw Kim Kee - 20%
There are no liabilities to be assumed by SCH.
11. Directors and Substantial Shareholders' Interest
None of the directors nor the substantial shareholders of the Company or persons connected with them has any interest, direct or indirect, in the DISPOSAL.
12. Directors Opinion
The Directors of KRI are of the opinion that the Disposal is in the best interest of the Kossan Group.
13. Document for inspection
The Agreement can be inspected at the Registered Office of KRI at Wisma Kossan, Lot 782, Jalan Sungai Putus, Off Batu 3-3/4, Jalan Kapar, 42100 Klang from Mondays to Fridays (except public holidays) during business hours.
This announcement dated 5 February 2002 is an amendment to that announced on 4 February 2002.