Contents :
The Board of Directors of NPC Resources Berhad ("NPC") is pleased to announce the following:
1. INTRODUCTION
Growth Enterprise Sdn. Bhd. [52423-M] ("GESB"), a wholly owned subsidiary of NPC has entered into a conditional Sale and Purchase Agreement on 21 October 2002 ("the Agreement") with the shareholders of Sungai Kenali Sdn. Bhd. [137233-T] ("SKSB") in respect of the proposed acquisition of the entire issued and paid up capital of 250,000 ordinary shares of RM1.00 each in SKSB for a cash consideration of RM4,250,000/- ("the Proposed Acquisition").
Following the Proposed Acquisition, SKSB shall become a wholly owned subsidiary of GESB.
2. DETAILS OF THE PROPOSED ACQUISITION
2.1 Vendors
|
| No. of Shares
held in SKSB | % | Consideration
RM |
| Lai Ah On | 125,000 | 50 | 2,125,000 |
| Lai Ngai Ming | 125,000
------------- | 50
-------- | 2,125,000
----------------- |
| Total | 250,000
======== | 100
===== | 4,250,000
========= |
2.2 LIABILITIES ASSUMED
GESB will not assume any of the liabilities of SKSB on or prior to the completion date of the Agreement.
2.3 PAYMENT TERMS
2.3.1 (a) Upon the execution of the Agreement, GESB shall pay the Vendors the sum of RM1,275,000/- being thirty percent (30%) of the purchase price as deposit.
(b) Within ninety (90) days from the date of the Agreement, deposit with Messrs. Chin Lau Wong & Foo, Sandakan ("the Solicitors"), as stakeholder, the balance of the purchase price of RM2,975,000/-.
The parties to the Agreement agree that:
(i) the Solicitors shall retent the sum of RM157,884.80 from the purchase price for the payment of Real Property Gains Tax arising from the disposal of the said shares.
(ii) upon the receipt of a requisition or assessment notice from the Inland Revenue Board ("IRB") to pay from the sum of RM157,884.80 the sum stated in the requisition or assessment notice.
(iii) upon the receipt of a Certificate of Clearance from IRB, to return the said sum of RM157,884.80 or any balance thereof, to the Vendors.
2.4 COST OF INVESTMENT
The original cost of investment in SKSB to the Vendors is RM2,276,486/- and the date of investment is between December 1991 to June 1997.
2.5 BACKGROUND INFORMATION ON PERMATA ALAM SDN. BHD.
SKSB was incorporated in Malaysia under the Companies Act, 1965 on 22 March 1985 and it is principally involved in the operation of an oil palm plantation.
.
The authorised share capital of SKSB is RM500,000/- divided into 500,000 ordinary shares of RM1.00 each of which 250,000 ordinary shares have been issued and fully paid-up.
2.6 FINANCING
The Proposed Acquisition will be financed partially by bank borrowing and partially by internal generated funds.
3. RATIONALE OF THE PROPOSED ACQUISITION
The Proposed Acquisition of SKSB which is the registered owner of a piece of land measuring 197.9 hectares more or less situated at Segaliud-Lokan, Kinabatangan in the State of Sabah, Malaysia and planted with oil palm will further increase the Group's land bank and synergise with the Group's milling operation due to its proximity to the Group's mill operating under Sungai Ruku Oil Palm Plantation Sdn. Bhd.
4. APPROVAL REQUIRED
The Proposed Acquisition is not subject to approval of the shareholders or any other authority.
5. EFFECTS OF THE PROPOSED ACQUISITION
5.5 Share Capital
The Proposed Acquisition will not have any effect on the share capital of NPC as the purchase consideration shall be fully satisfied by cash.
5.2 Net Tangible Assets
The Net Tangible Assets of NPC Group shall be increased by the Proposed Acquisition.
5.3 Earnings
The earnings per share of NPC Group for the financial year ending 31 December 2002 will not be immediately affected by the Proposed Acquisition. It is nevertheless, expected to contribute positively to the long term earnings of the Group.
5.4 Substantial Shareholding
The Proposed Acquisition will not have any effect on the substantial shareholding of NPC as the Purchase Consideration shall be satisfied in cash.
6. DIRECTORS' AND SUBSTANTIAL SHAREHOLDERS' INTEREST
None of the Directors and/or Substantial Shareholders of NPC and persons connected with them have any interest, direct or indirect, in the Proposed Acquisition.
7. DIRECTORS' STATEMENT
The Board of Directors after careful deliberation is of the opinion that the Proposed Acquisition is expected to contribute positively to the NPC Group.
8. RISK FACTOR
The Proposed Acquisition is subject to general business risks inherent in the oil palm industry. The Group will mitigate such risks through efficient human resource management, close supervision of plantation operations and efficient cost control policy.