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 8 November 2002 ("the Agreement") with the shareholders of Kian Merculaba Sdn. Bhd. [415104-V] ("KMSB") in respect of the proposed acquisition of the entire issued and paid up capital of 150,000 ordinary shares of RM1.00 each in KMSB for a cash consideration of RM2,430,029/- being the net tangible assets (NTA) of KMSB as at 30 September 2002 ("the Proposed Acquisition").
Following the Proposed Acquisition, KMSB shall become a wholly owned subsidiary of GESB.
2. DETAILS OF THE PROPOSED ACQUISITION
2.1 Vendors
|
| No. of Shares
held in PASB | % | Consideration
RM |
Sakuwait Sdn Bhd |
150,000
|
100
|
2,430,029
|
2.2 LIABILITIES ASSUMED
GESB will assume the following liabilities of KMSB based on the unaudited accounts as at 30 September 2002 upon the Completion Date of the Agreement:
| Nature | RM |
| !. Trade Creditors | 119,520 |
| 2. Other Creditors | 18,931 |
| 3. Inter-company advances | 3,210,700 |
| 4. Bank Loan | 2,410,000 |
 | ---------------
5,759,151
========= |
2.3 PAYMENT TERMS
2.3.1 (a) Upon the execution of the Agreement, GESB shall pay the Vendors the sum of RM500,000/- being deposit and part payment of the purchase price.
(b) The balance of the purchase price of RM1,930,029/- be paid to Messrs. Rolland Cheng & Co., Kota Kinabalu ("the Solicitors"), as stakeholder within three (3) months from the date of the Agreement ("the Completion Date" ) which sum shall be subject to adjustment as per item (ii) below.
(c) In the event GESB fail to pay the balance of the purchase price within the Completion Date, the Vendor shall grant a two months extension to GESB ("the Extended Completion Date"), subject to the payment by GESB to the Vendor, interest at the rate of 6% per annum calculated on the balance purchase price from the date such payment is due till the date of actual payment, in which event the Cut-Off Date shall be correspondingly extended for a similar period of 2 months.
The parties to the Agreement mutually agree that:
(i) A cut-off date for the finalisation of the accounts of KMSB shall be within 3 months from the date of this Agreement ("the Cut-Off Date"). The finalised accounts at the Cut-Off Date shall be referred to as "the Completion Accounts".
(ii) The balance of the purchase price shall be adjusted accordingly to the mutually agreed NTA as shown in the Completion Accounts to be determined later.
(ii) Within 7 days of the Completion Date or Extended Completion Date, GESB to settle by way of cashiers order in favour of the Vendor, the inter-company advances which shall be adjusted accordingly as shown in the Completion Accounts.
2.4 COST OF INVESTMENT
The original cost of investment in KMSB to the Vendors is RM5,623,377/- and the date of investment is between September 1997 to December 2001.
2.5 BACKGROUND INFORMATION ON KIAN MERCULABA SDN. BHD.
KMSB is a private limited company incorporated in Malaysia under the Companies Act, 1965 on 28 December 1996 and it is principally involved in the operation of an oil palm plantation.
.
The authorised share capital of KMSB is RM500,000/- divided into 500,000 ordinary shares of RM1.00 each of which 150,000 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 KMSB which is the registered owner of a fully developed oil palm plantation of 1,231 acres more or less held under Country Lease No. 085325417 located in the District of Labuk and Sugut, Telupid in the State of Sabah, Malaysia will further increase the Group's land bank and synergise with the Group's plantation operation due to its proximity .to the Group's estates operating under Bonus Indah 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 not be materially affected 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.