Download RPT Deborah (TT3 SOHO)-23 3 2017

IBRACO BERHAD (“IBRACO” or “THE COMPANY”)
RELATED PARTY TRANSACTIONS
1.
INTRODUCTION
Pursuant to Paragraph 10.08(1) of the Listing Requirements of Bursa
Malaysia Securities Berhad (“Bursa Securities”), the Board of Directors of
Ibraco ("Board") wishes to announce that Ibraco had, on 23 March 2017,
entered into sale and purchase agreements pertaining to related party
transactions with Dr. Sharifah Deborah Sophia Ibrahim (“SDSI” or “the
Purchaser”), the Non-Independent Non-Executive Director and a major
shareholder of Ibraco.
2.
DETAILS OF THE RELATED PARTY TRANSACTIONS
2.1
Details of the Related Party Transactions
Ibraco is principally engaged in property development and investment holding.
Ibraco and the Purchaser had, on 23 March 2017, entered into separate sale
and purchase agreements for the disposal of 3 units of Shop-Office-HomeOffice (“SOHO”) within a scheme known as TT3 SOHO (“the Disposal”).
Details of the said properties are summarised below:Description of Property
Rentable Area
1.
Unit P13-3A Level 13, the TT3 SOHO, 679
Tabuan Tranquility
Feet
Square
Purchase
Consideration
(RM)
376,200.00
2.
Unit P13A-7 Level 13A, the TT3 SOHO, 1,017
Tabuan Tranquility
Feet
Square
514,800.00
3.
Unit P13A-6 Level 13A, the TT3 SOHO, 669
Tabuan Tranquility
Feet
Square
371,800.00
1,262,800.00
(Collectively referred as “the Properties”)
TT3 SOHO comprises 14-storey building with 167 SOHO units come with
commercial units and car parking podium. The development was approved by
the State Planning Authority on 08.06.2016.
The Properties sit on the following master lots where Ibraco is the registered
proprietor and/or beneficial owner:No.
Description of title
1.
Lot 6 Block
MTLD
Lot 1450 Block
MTLD
Lot 1452 Block
MTLD
Lot 1454 Block
MTLD
Lot 1456 Block
MTLD
Lot 1458 Block
MTLD
Lot 1809 Block
MTLD
Lot 4554 MTLD
2.
3.
4.
5.
6.
7.
8.
Tenor/Date of expiry of
lease
12 Perpetual/ Perpetuity
Legal
encumbrances
Nil
Cost
(RM’000)
3,056
Date of
investment
4.8.2003
12 Perpetual/ Perpetuity
Nil
197
5.11.2004
12 Perpetual/ Perpetuity
Nil
440
14.10.2004
12 Perpetual/ Perpetuity
Nil
1,200
14.10.2004
12 Perpetual/ Perpetuity
Nil
1,293
14.10.2004
12 Perpetual/ Perpetuity
Nil
1,285
5.11.2004
12 99 years lease expiring
on 15.10.2113
Perpetual/ Perpetuity
Nil
3,241
16.10.2014
Nil
1,935
17.7.2003
Description of title
9.
10.
11.
Tenor/Date of expiry of
lease
Legal
encumbrances
Lot 4581 MTLD
Perpetual/ Perpetuity
Lot 4771 MTLD
Perpetual/ Perpetuity
Lot 9282 Block 11 99 years/ 31.12.2069
MTLD
Nil
Nil
Nil
Original
cost of
investmen
t (RM’000)
2,280
1,465
3,418
Date of
investment
31.7.2003
1.8.2003
29.12.2010
The original cost of investment of the Properties is estimated at RM10,174.00
The total development cost of the Properties is estimated at RM952,000 and
is financed via internally generated funds. The construction of the Properties
has commenced with piling works and the development is expected to
complete by end of 2019.
The strata titles in respect of the Properties shall be issued together with other
properties upon application by Ibraco after issuance of Occupation Permit by
the relevant authority.
2.2
Information on SDSI
SDSI was appointed as an Executive Director of Ibraco on 5 July 1982 and
later re-designated as Non-Executive Non-Independent Director on 16 April
2008.
2.3
Mode of Payment
The purchase consideration of each of the abovementioned property is to be
satisfied via cash payment in the following manner:1. Upon signing of the sale and purchase agreement
10.0%
2. Within 21 days after receipt of written notice of the
completion of:a. Foundation works
b. Reinforced concrete framework, and floor slab of the
property
c. Walls of the Property with door and window frames
placed in position
d. Roofing/ceiling, electrical conduits (without wiring),
plumbing (without fittings), gas piping (if any) and
internal telephone trunking and cabling (if any) to the
property
e. Internal plastering of the property
f. External plastering of the building
g. Painting of the building
h. Issuance of occupation permit
i. Issuance of subsidiary title to the property
15.0%
20.0%
20.0%
10.0%
10.0%
5.0%
5.0%
2.5%
2.5%
_____
100%
_____
2.4
Basis of Arriving At the Purchase Consideration
The purchase consideration is derived based on a non-negotiable fixed price
which is published and all material terms are applied consistently to all
customers of Ibraco.
2.5
The Expected Gains
The Disposal is expected to generate an estimated gross profit from operation
amounting RM311,000.
2.6
The Salient Features of the Sale and Purchase Agreements
a) The Properties is sold free from all encumbrances other than the
conditions or restriction that may express and imply upon issuance of
the subsidiary titles and also subject to any terms and conditions to be
imposed by the authorities from time to time;
b) Ibraco shall at its own cost and expense obtain the issue of a separate
subsidiary titles in respect of the Properties;
c) In the event the Purchaser fails to pay the instalment payments as
specified in 2.3 above and within the time as specified therein, the
Purchaser shall pay Ibraco late payment charges, interests calculated
at 10% per annum;
d) In the event the Purchaser fails to pay any sum of money payable
under the agreements; commits any breach of the terms and
conditions contained in the agreements or fails to perform or observe
all or any of the purchaser’s covenants; commits an act of bankruptcy
or enters into any composition or arrangement with the creditors;
enters into any liquidation or instructs the financier to withhold
payment of the loan to Ibraco, Ibraco shall give the Purchaser or its
advocates not less than 14 days’ notice in writing by registered post to
treat the agreement as having been repudiated by the Purchaser and
unless the default and/or breach is remedied the agreement shall be
deemed to be terminated.
e) Ibraco shall deliver vacant possession of the Properties to the
Purchaser within 36 calendar months from the date of the agreements
and upon receipt of 97.5% of the purchase consideration;
f)
If Ibraco fails to complete the Properties within the stipulated period,
Ibraco shall pay to the Purchaser liquidated damages calculated from
day to day at the rate of 8% per year of the purchaser consideration
from the expiry date of delivery vacant possession in sub-clause (e)
until the date of the delivery of vacant possession.
g) If Ibraco fails to complete the common facilities within the stipulated
period, Ibraco shall pay to the Purchaser liquidated damages
calculated from day to day at the rate of 10% per year of the last 20%
of the purchase consideration from the expiry date of delivery vacant
possession in sub-clause (e) until the date of the delivery of vacant
possession.
h) In the event that Ibraco shall refuse, fail or unable to comply with any
fundamental terms of the agreements, then and, in any such case, all
monies received by Ibraco shall be refunded to the Purchaser and in
addition, Ibraco shall pay a like sum but not exceeding 10% of the
purchase consideration to the Purchaser as pre-agreed liquidated
damages.
2.7
Expected Completion Date
The Board expects the Disposal to be completed within 36 months from the
date of the agreements.
2.8
Highest Percentage Ratio
The highest percentage ratio applicable for the Disposal pursuant to
Paragraph 10.02(g) of the Listing Requirements of Bursa Securities was
0.4%.
3.
INTENDED APPLICATION OF THE SALE PROCEEDS
The sale proceeds will be utilised as working capital for payment of suppliers and
miscellaneous operating expenses as and when needed.
4.
PARTICULARS OF ALL LIABILITIES TO BE ASSUMED
There is no liability to be assumed by the Purchaser from the Disposal.
5.
EFFECTS OF THE RELATED PARTY TRANSACTIONS
The Disposal will not have any effect on the issued and paid-up share capital of
Ibraco as well as its substantial shareholders’ shareholdings as the Disposal does not
involve any issuance of shares.
The Disposal, which will not have any material effect on the net assets per share and
gearing of Ibraco is expected to contribute positively to the earnings of Ibraco Group
for the financial year ending 31 December 2017. The Disposal is expected to
generate a gross profit from operation amounting RM311,000.
6.
DIRECTORS' AND MAJOR SHAREHOLDERS' INTERESTS AND/OR PERSONS
CONNECTED
SDSI is a Director and major shareholder of Ibraco. The direct and indirect interest of
the interested Director and shareholder as at the date of announcement are as
follows:-
Director and Major Shareholder
Dr. Sharifah Deborah Sophia
Ibrahim
Direct
No. of
Shares
99,366,120
%
Indirect
No. of
%
Shares
20.02
-
-
Accordingly, the interested Director and shareholder have abstained from all
deliberations and voting at all meetings of the Board in relation to the Disposal.
Save as disclosed above, none of the Directors and/or major shareholders of Ibraco
or persons connected to the Directors and/or major shareholders of Ibraco have any
interest, direct or indirect, in the Disposal.
7.
APPROVALS REQUIRED
The Disposal is neither subject to the approval of Ibraco’s shareholders nor the
authorities.
8.
RATIONALE OF THE DISPOSAL
The Disposal is in the ordinary course of business of Ibraco, hence is expected to
contribute positively to Ibraco’s earnings.
9.
DIRECTORS' RECOMMENDATION
The Board, except for SDSI, having taken into consideration all aspects of the
Disposal, is of the opinion that the Disposal in the best interest of the Company.
10.
STATEMENT BY AUDIT COMMITTEE
The Audit Committee, having taken into consideration all aspects of the Disposal,
was of the view that the Disposal is in the best interests of Ibraco, fair, reasonable
and on normal commercial terms and not detrimental to the interest of the minority
shareholders.
11.
TRANSACTIONS ENTERED IN THE PRECEDING 12 MONTHS
No transaction has been entered into with SDSI for the preceding 12 months.
12.
DOCUMENTS AVAILABLE FOR INSPECTION
The following documents may be inspected at the registered office of IBRACO at
IBRACO HOUSE, No. 898, Jalan Wan Alwi, Tabuan Jaya, 93350 Kuching, Sarawak
during normal office hours from Monday to Friday (except public holidays) for a period
of 3 months from the date of this announcement:i.
Sale and Purchase Agreements dated 23 March 2017.
This announcement is dated 23 March 2017.