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The Board of Directors wishes to announce that Tasek Corporation Berhad ("Tasek") proposes to seek the approval of its shareholders for the Proposals at an Extraordinary General Meeting ("EGM") to be convened.
1. DETAILS OF THE PROPOSALS
1.1 Proposed Shareholders Mandate
That in line with Chapter 10.09 of the Listing Requirements on recurrent related party transactions of a revenue or trading nature, the Board proposes to seek shareholders approval for Tasek and its subsidiaries to enter into transactions with related parties which are necessary for the Groups day-to-day operations and in the ordinary course of business, provided that such transactions are made at arms length and on normal commercial terms and are not more favourable to the related party than those generally available to the public and not prejudicial to the shareholders of the Company. For avoidance of doubt, the Company is also seeking shareholders ratification of all recurrent related party transactions and arrangements entered into by the Company and/or its subsidiaries prior to the date of the forthcoming EGM of the Company.
The Proposed Shareholders Mandate will be subject to annual renewal and that disclosures will be made in the annual report of Tasek of the aggregate value of transactions conducted pursuant to the Proposed Shareholders Mandate during the financial year.
1.2 Proposed Share Buy-Back
The Company had at its last EGM held on 27 October 2000, obtained shareholders renewal approval for the Company to purchase and/or hold up to ten per centum (10%) of the issued and paid-up ordinary share capital of Tasek. The authority conferred by the shareholders at the said EGM will expire at the conclusion of the forthcoming Annual General Meeting. Accordingly, the Company proposes to seek shareholders approval for renewal of the authority to undertake the Proposed Share Buy-Back.
1.3 Proposed Amendments to the Articles
The Board proposes to amend the Companys existing Articles of Association to incorporate the current statutory and regulatory requirements and to ensure consistency with the KLSE Listing Requirements.
2. RATIONALE FOR THE PROPOSALS
2.1 Proposed Shareholders Mandate
The Proposed Shareholders Mandate would eliminate the need to convene a separate general meeting from time to time to seek shareholders approval as and when potential recurrent related party transactions of a revenue or trading nature arise, thereby reducing substantially administrative time and expenses in convening such meetings without compromising the corporate objectives and adversely affecting the business opportunities available to the Tasek Group.
2.2 Proposed Share Buy-Back
The Proposed Share Buy-Back will enable Tasek to utilise its financial resources not immediately required for use to purchase its Ordinary Shares.
The Proposed Share Buy-Back is expected to have the effect of stabilising the supply and demand as well as the price of the Companys Ordinary Shares on the KLSE and this may have a positive effect on the market price of the Shares and may result in an increase in Taseks EPS with the cancellation of Taseks Ordinary Shares bought back by the Company.
2.3 Proposed Amendments to the Articles
The Proposed Amendments to the Articles are made to update the Articles of Association of the Company, where relevant, to render the Articles of Association consistent with current statutory and regulatory requirements.
3. CONDITIONS OF THE PROPOSALS
The Proposals are subject to the approval of shareholders at the forthcoming EGM to be convened.
4 FINANCIAL EFFECTS OF THE PROPOSED SHARE BUY-BACK
4.1 Ordinary Share Capital
The Proposed Share Buy-Back will result in Taseks issued and paid-up ordinary share capital of RM1.00 each as at 1 September 2001 to be reduced by up to 18,248,000 Ordinary Shares from 182,480,000 Ordinary Shares to 164,232,000 Ordinary Shares if the Proposed Share Buy-Back is carried out in full and the Ordinary Shares so purchased are fully cancelled.
4.2 NTA, Working Capital and Cash Flow
The Proposed Share Buy-Back is likely to reduce the NTA of the Tasek Group and will reduce the working capital of Tasek, the quantum of which depends on, amongst other things, the number of Ordinary Shares eventually purchased and the purchase prices of the Ordinary Shares. For Ordinary Shares so purchased which are kept as treasury Ordinary Shares, upon resale, the NTA of the Group and the working capital of the Company will increase assuming that a gain has been realised. Again, the quantum of the increase in NTA will depend on the actual selling price of the treasury Ordinary Shares and the number of treasury Ordinary Shares resold.
The impact on the cash flow of the Tasek Group will be dependent on the number and the prices of the Ordinary Shares eventually purchased.
4.3 Earnings
Depending on the number and the prices of the Ordinary Shares purchased, the Proposed Share Buy-Back may increase the EPS of the Tasek Group. Similarly, on the assumption that the Ordinary Shares so purchased are treated as treasury shares, the extent of the effect on the earnings of the Tasek Group will depend on the actual selling price, the number of treasury Ordinary Shares resold and the effective gain or interest savings arising.
5. DIRECTORS AND SUBSTANTIAL SHAREHOLDERS INTERESTS
None of the Directors and Substantial Shareholders nor persons connected with the Directors and Substantial Shareholders have any interest, direct or indirect, in the Proposed Share Buy-Back.
Interested Directors, namely, Tan Sri Quek Leng Chan, David Tan Sek Yin, Dato Yeoh Kean Hin, Dato Tan Eng Soon, Tan Eng Sim, Kwek Leng Beng and Dato Loh Cheng Yean, have and will abstain from all Board deliberations in relation to the Proposed Shareholders Mandate and together with the major shareholders, namely, Hong Leong Investment Holdings Pte Limited and Asia General Holdings Limited will abstain from voting in respect of their direct and indirect shareholdings on the resolution relating to the Proposed Shareholders Mandate at the EGM.
6. DIRECTORS RECOMMENDATION
The Board of Directors of Tasek, having taken into consideration all aspects of the Proposals, are of the opinion that the Proposals are in the best interest of the Company and accordingly recommend that shareholders vote in favour of the ordinary resolution and special resolution for the Proposed Share Buy-Back and Proposed Amendments to the Articles respectively to be tabled at the forthcoming EGM.
The Board of Directors, except the Directors stated in paragraph 5 herein, who shall abstain from voting on the resolution pertaining to the Proposed Shareholders Mandate at the forthcoming EGM, recommend that shareholders vote in favour of the ordinary resolution for the Proposed Shareholders Mandate to be tabled at the forthcoming EGM.
Further information on the Proposals will be disclosed in the Circular to Shareholders, which will be despatched to shareholders in due course.
This announcement is dated 28 September 2001.