Download Proposed Disposal Of Part Of The Issued And Paid

LIONGOLD CORP LTD. (the “Company”)
Incorporated in Bermuda
Company Registration Number 35500
PROPOSED DISPOSAL OF PART OF THE ISSUED AND PAID UP SHARE CAPITAL OF
INDUSTRIAL POWER TECHNOLOGY PTE LTD, THE ENTIRE ISSUED AND PAID UP SHARE
CAPITAL OF THE THINK ENVIRONMENTAL CO SDN BHD AND THE PROPERTY LOCATED AT
38 KALLANG PLACE SINGAPORE (“PROPOSED DISPOSAL”)
1.
INTRODUCTION
The Board of Directors (the “Board”) of the Company refers to the announcement on 10
September 2012 regarding the proposed divestment of shares of Industrial Power
Technology Pte Ltd.
Further thereto, the Board wishes to announce that the Company and its wholly owned
subsidiary Think Power Pte Ltd (the “Vendor”) had on 28 September 2012 entered into a sale
and purchase agreement (the “Agreement”) with Annica Holdings Ltd (the “Purchaser”)
(hereinafter the Company and the Purchaser are referred to as the “Parties” and each a
“Party”) to the proposed disposal of:
(a)
4,861,500 shares representing 60% of the entire issued share capital of Industrial
Power Technology Pte Ltd (the “IPT”) owned by the Vendor (the “Sale Shares”);
(b)
100,000 shares, comprising 100% of the entire issue share capital of The Think
Environmental Co Sdn Bhd (the “TTEC”) owned by the Company (the “TTEC
Shares”); and
(c)
A single storey terrace factory located at 38 Kallang Place, Singapore 339166 (the
“Property”) owned by the Vendor,
in accordance with the terms and conditions of the Agreement. The Company will also
guarantee the performance of the Vendor’s obligations under the Agreement on the terms
and subject to the conditions contained in the Agreement.
2.
PROPOSED DISPOSAL AND THE SALIENT TERMS THEREOF
2.1
Information about IPT and TTEC
IPT
IPT is a company incorporated in Singapore on 24 August 1991 with its registered office at 38
Kallang Place Singapore 339166. IPT has as at the date of the Agreement an issued and
paid-up share capital of S$9,600,000 comprising 8,102,500 ordinary shares, of which 25% is
owned IPT Pte Ltd and 75% owned by the Vendor.
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IPT in turn owns (i) 18% of the entire equity interests in Industrial Power Technology
(Thailand) Co., Ltd. and (ii) 49% of the entire equity interests in Industrial Power (Thailand)
Co,. Ltd.
TTEC
TTEC is a company incorporated in Malaysia on 23 June 2008 with its registered office at No.
177-3, Floor 3, Jalan Sarjana, Taman Connaught, Cheras, 56000 Kuala Lumpur, Malaysia.
TTEC has as at the date of the Agreement an issued and paid-up share capital of
approximately RM100,000 comprising 100,000 shares.
The Property
The Property is a single terrace factory situated at 38 Kallang Place, Singapore 339166. It is
leased from JTC Corporation for a period of 60 years from 20 June 1981 and has a land area
of 1,034.4 square metres.
2.2
Principal Businesses of the Subsidiaries to be Disposed
IPT and its subsidiaries
The principal businesses of the IPT are (i) the manufacture and repair of heating boilers,
radiators and correctors and (ii) power plant & building construction & engineering services.
Industrial Power Technology (Thailand) Co., Ltd. carries on the business of construction of
electric power plant.
Industrial Power (Thailand) Co,. Ltd. carries on the business of construction of power plant.
TTEC
The principal business of the TTEC Specialist is that of a engineering, procurement and
construction contractor for bio-mass power generation projects.
2.3
Disposal Consideration
(a) Pursuant to the Agreement, the aggregate cash consideration for the Proposed Disposal
is S$12,500,001 (the “Aggregate Consideration”) and shall be payable on the date of
Completion (defined below). The Aggregate Consideration consists of S$10,000,000 for
the Sale Shares, S$2,500,000 for the Property and a nominal fee of S$1.00 for the TTEC
Shares.
(b) Each of the cash consideration amounts for the Sale Shares, Property and TTEC Shares
were determined on a willing-buyer, willing-seller basis and takes into account the
following:
(i) in relation to the Sale Shares, the net liability value of the Sale Shares as at its
financial year end of 31 March 2012, being S$2,021,196 and the business valuation
report on IPT as commissioned by the Purchaser and prepared by AV Capital and
dated 12 September 2012. Based on the said valuation report, the fair market value
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of IPT for a 100% shareholding stake is in the range of S$12.67 million to $18.39
million as computed under the discounted cashflow method;
(ii) in relation to the Property, the valuation report on the Property commissioned by the
Purchaser and prepared by Dennis Wee Realty Pte Ltd and dated 14 September
2012. Based on the said valuation, the open market value of the Property, with
vacant possession and free from encumbrances is S$2,600,000; and
(iii) in relation to the TTEC Shares, the nominal consideration takes into account the
negative net asset value of TTEC Shares as at its financial year end of 31 March
2012, being S$425,131 (RM1,035,125 @ 0.410705).
3.
RATIONALE FOR PROPOSED DISPOSAL
The Proposed Disposal is in line with the Company’s business strategy and on-going efforts
to divest of its non-core assets and to focus on its gold business.
4.
SALIENT TERMS OF THE PROPOSED DISPOSAL
4.1
The completion of the Proposed Disposal (“Completion”) is conditional upon the fulfillment
(or waiver) of, inter alia, the following conditions:
(a)
the Purchaser having undertaken and completed its due diligence investigations in
respect of the Industrial Power (and the companies under which it has shares in) and
TTEC and is satisfied with the results of such due diligence in its sole and absolute
discretion;
(b)
the Purchaser, the Vendor and IPT Pte Ltd, entering into a shareholders agreement
to regulate their rights as shareholders of IPT；
(c)
the consent of the relevant bank to the sale and purchase of the Sale Shares;
(d)
the consent of JTC to the sale and purchase of the Property.
4.2
Completion of the Proposed Disposal shall take place on the date falling 5 business days
after the date on which all the conditions precedent have been fulfilled or waived in writing.
The long-stop date for the proposed Acquisitions is 27 February 2013.
4.3
The Company and the Vendor have provided the customary representations and warranties
to the Purchaser in respect of the Sale Shares, the TTEC Shares and the Property.
5.
CHAPTER 10 OF THE LISTING MANUAL
5.1
The Proposed Disposal as a Disclosable Transaction
(a) The Aggregate Consideration amounts to S$12,500,001.
(b) Based on the unaudited financial statements of the Group for the first quarter ended 30
June 2012 announced on 14 August 2012, the relative figures of the Proposed Disposal
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computed on the bases set out in Rule 1006(a) to (d) of the Listing Manual of the SGX-ST
are as follows:
Rule
1006
(a)
(b)
(c)
(d)
Bases
Net asset value of the shares to be disposed of,
1
compared with the Group’s net asset value
Net profits/loss before tax and minority interest
attributable to the shares to be disposed of,
2
compared with the Group’s net profits
Aggregate value of the consideration to be
received, compared with the Company’s market
capitalisation on 27 September 2012, being the
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market day preceding the date of the Agreement
Number of equity securities issued by the Company
as consideration for an acquisition, compared with
the number of equity securities previously in issue
Relative
Figures
(0.88)%
(4.50)%
1.19%
Not Applicable
Notes:
(c)
6.
1.
The unaudited net asset value of IPT, TTEC and the Company for the three
months ended 30 June 2012 was (S$567,029), (S$432,319) and
S$113,282,128.
2.
The unaudited net profit of IPT, TTEC and the Company for the three months
ended 30 June 2012 was S$342,509, (S$19,263) and (S$7,178,835).
3.
The aggregate value of the consideration given for the disposal of IPT, TTEC and
the single terrace factory is S$12,500,001. The Company's market
capitalization was S$1,047,369,069 based on the weighted average price of
S$1.2045 of the Company's shares on 27 September 2012. The Company has
869,546,757 shares in issue.
As the Proposed Disposal falls within certain of the relevant thresholds under Chapter
10 of the Listing Manual of the Singapore Exchange Securities Trading Limited
(“SGX-ST”), the Proposed Disposal constitutes a “Disclosable Transaction” which is
subject to the disclosure requirements of the Listing Manual.
FINANCIAL EFFECTS OF THE PROPOSED DISPOSAL
For illustration purposes only, the financial effects of the Proposed Disposal on the Group set
out below were prepared based on the unaudited financial statements of the Group for the
first quarter ended 30 June 2012 announced on 14 August 2012 and subject to the following
key assumptions:
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(a) for the purpose of computing the earnings and EPS of the Company after the Proposed
Disposal, it is assumed that the Proposed Disposal was effected on 30 June 2012;
(b) for the purpose of calculating the NTA, NTA per Share and gearing of the Group after the
Proposed Disposal, it is assumed that the Proposed Disposal were effected on 30 June
2012;
Shareholders should note that the illustrative financial effects of the Proposed Disposal on the
Group are for illustration purposes only. The illustrative financial effects should not be
construed as to mean that the Group’s actual results, performance or achievements will be as
expected, expressed or implied in such financial effects.
6.1
Share capital
As at the date of Latest Practicable Date, the entire issued and paid up share capital of the
Company is S$225,949,873 comprising 869,546,757 Shares. The Proposed Disposal will
have no impact on the issued and paid-up share capital of the Company.
6.2
NTA and NTA per Share
The pro forma financial effects of the Proposed Disposal on the NTA of the Company as at 30
June 2012 are as follows:Before adjusting for
the Proposed
Disposal
After adjusting for
the Proposed
Disposal
NTA (S$)
61,477,445
58,231,527
Weighted average number of shares
869,546,757
869,546,757
NTA per share (S$ cents)
7.07
6.70
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Note:
1. The figure is derived by adding the net tangible assets of the Company of S$61,477,445,
net liability of IPT and TTEC of S$567,029 and S$432,319 respectively, and cash
received of $12,500,001 for the consideration minus goodwill written off of S$10,178,019,
net debt waived by the Company to IPT and TTEC of S$4,269,381 and S$533,543
respectively, net book value of the property of S$1,259,026 and non-controlling interest
of S$505,299.
6.3
EPS
The pro forma financial effects of the Proposed Disposal on the earnings per share of the
Company as at 30 June 2012 are as follows:Before the
Proposed
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After the Proposed
Disposal
Disposal
Net profit after tax (S$)
(5,139,802)
(8,385,720)
Weighted average number of shares
869,546,757
869,546,757
Earnings per Share (S$ cents)
(0.59)
(0.96)
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Note:
1. The figure is derived by adding the loss after tax of S$5,139,802, gain on disposal of the
property of S$1,240,974 and loss on disposal for IPT and TTEC of S$4,385,670 and
S$101,222 respectively, and divided by the number of shares in issue for the Company of
869,546,757.
6.4
Net gearing
The pro forma financial effects of the Proposed Disposal on the gearing of the Company as at
30 June 2012 are as follows:
Before the
Proposed Disposal
After the Proposed
Disposal
Total Debt (S$)
66,146,315
53,646,314
Total Equity (S$)
113,282,128
110,036,210
Debt to Equity Ratio
58.39%
47.36%
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2
Notes:
1. Net debts is derived by adding total liabilities of S$86,140,181 less income tax of
S$18,096, cash and cash equivalents of S$19,975,769 and consideration of
S$12,500,001.
2. The figure is derived by adding the total equity of the Company, S$113,282,128 minus
the loss on disposal of S$3,245,918 from IPT, TTEC and the property.
7.
BOOK VALUE AND EXCESS/DEFICIT OF PROCEEDS OF PROPOSED DISPOSAL
OVER BOOK VALUE
IPT
Based on the above-said valuation report, the fair market value of IPT for a 100%
shareholding stake is in the range of S$12.67 million to S$18.39 million as computed under
the discounted cashflow method.
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The net assets value of IPT is S$(1,260,064) as at 30 June 2012. The net assets value of IPT
based on 60% shareholding stake is S$(567,029).
There will be a loss of S$4,385,670 on the disposal of IPT at the Group level.
TTEC
The negative net asset value of TTEC Shares is S$432,319 as at 30 June 2012.
There will be a loss of S$101,222 on the disposal of TTEC at the Group level.
The Property
Based on the above-said valuation, the open market value of the Property, with vacant
possession and free from encumbrances is S$2,600,000.
The net assets value of Property is S$1,259,026 as at 30 June 2012.
There will be a gain of S$1,240,974 recognized on the disposal of the property at the Group
level.
8.
USE OF PROCEEDS
The Aggregate Consideration is S$12,500,001 and after deducting related expenses of the
Proposed Disposal amounting to approximately S$100,000, the net proceeds arising from the
Proposed Disposal is S$12,400,001 (“Net Proceeds”).
The Board intends to use the Net Proceeds to meet the general working capital needs of the
Group.
9.
INTEREST OF DIRECTORS AND CONTROLLING SHAREHOLDERS
None of the Directors or controlling shareholders of the Company has any interest, direct or
indirect, in the Proposed Disposal, other than through their respective shareholdings in the
Company.
10.
RESPONSIBILITY STATEMENT
The Directors collectively and individually accept full responsibility for the accuracy of the
information given in this announcement and confirm after making all reasonable enquiries
that, to the best of their knowledge and belief, this announcement constitutes full and true
disclosure of all material facts about the Proposed Disposal, the Company and its
subsidiaries, and the Directors are not aware of any facts the omission of which would make
any statement in this announcement misleading. Where information in the announcement
has been extracted from published or otherwise publicly available sources or obtained from a
named source, the sole responsibility of the Directors has been to ensure that such
information has been accurately and correctly extracted from those sources and/or
reproduced in the announcement in its proper form and context.
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11.
DOCUMENTS AVAILABLE FOR INSPECTION
The Agreement and the business valuation report on IPT prepared by AV Capital and dated
12 September 2012 will be made available for inspection during normal business hours at
registered office of the Company for three (3) months from the date of this announcement. In
respect of the valuation report on the Property prepared by Dennis Wee Realty Pte Ltd and
dated 14 September 2012, the Company is currently procuring the same to be available for
inspection at registered office of the Company. Further update in this regard will be provided
by the Company in due course.
12.
CAUTION IN TRADING
Shareholders are advised to exercise caution in trading their shares. There is no certainty or
assurance as at the date of this announcement that the Proposed Disposal will be completed
or that no changes will be made to the terms thereof. The Company will make the necessary
announcements when there are further developments on the Proposed Disposal and other
matters contemplated by this announcement. Shareholders are advised to read this
announcement and any further announcements by the Company carefully. Shareholders
should consult their stock brokers, bank managers, solicitors or other professional advisors if
they have any doubt about the actions they should take.
For and on behalf of the Board of
LionGold Corp Ltd.
Tan Sri Dato’ Nik Ibrahim Kamil
Executive Chairman
28 September 2012
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