Nov 27, 2015 - Properties Sdn. Bhd. (âBP Propertiesâ), a wholly-owned subsidiary of Bina Puri had entered into a Fra
FRAMEWORK AGREEMENT BETWEEN BINA PURI PROPERTIES SDN. BHD. AND STONE MASTER CORPORATION BERHAD
1.
INTRODUCTION Bina Puri Holdings Bhd. (“Bina Puri”) would like to announce that Bina Puri Properties Sdn. Bhd. (“BP Properties”), a wholly-owned subsidiary of Bina Puri had entered into a Framework Agreement (“FA”) with Stone Master Corporation Berhad (“Vendor”) on 26 November 2015 in relation to the products and services offered by the Vendor coupled with interest free vendor financing services to BP Properties valid over the span of 18 months from the date of the FA (“Availability Period”), subject to the terms and conditions acceptable to BP Properties. The Vendor and BP Properties shall hereinafter be individually referred to as “the Party” and collectively as “the Parties”.
2.
INFORMATION ON VENDOR The Vendor was incorporated in Malaysia under the Companies Act, 1965 on 11 November 1999 as a public limited company and was listed on the Bursa Malaysia Securities Berhad on 1 July 2002. Its existing authorised and paid-up share capital is RM2,000,000,000.00 divided into 8,000,000,000 shares of RM0.25 each and RM22,476,294.25 divided into 89,905,177 shares of RM0.25 each respectively. The Vendor is principally an investment holding company with its subsidiaries engaging in the import, manufacturing, trading and undertaking contracts of natural stones, ceramic tiles, sanitary wares and other building finishing materials.
3.
SALIENT CONTENTS OF THE FA The salient contents of the FA are as follows: (i)
In tandem with the “The Silk Road Economic Belt and the 21st Century Maritime Silk Road” (or “One Belt, One Road” in short) initiatives of the Government of the People’s Republic of China, the Vendor has successfully tied up a new collaboration model with its China principals to provide their products and services (including, natural stones, ceramic tiles, sanitary wares and other building finishing materials, and is hereinafter referred to as “Products and Services”) with interest free vendor financing services.
(ii)
In principle, the Vendor a g r e e s t o offer the Products and Services coupled with interest free vendor financing services to BP Properties and BP Properties agrees to accept the said dual offers over the span of 18 months from the date of the FA, subject to terms and conditions acceptable to BP Properties.
(iii)
The Parties a r e e x p e c t e d t o enter into separate vendor financing agreement(s) (hereinafter referred to as the “VFA(s)”), subject to terms and conditions acceptable to BP Properties in respect of suitable development projects which are to be identified by BP Properties and mutually agreed upon by the Parties (hereinafter referred to as “Selected Development Projects”). 1
(iv)
The FA shall form the framework which sets out in principle the preagreed terms and conditions upon which the VFA(s) shall be e n t e r e d into between the Parties during the Availability Period for S e l e c t e d D e v e l o p m en t P r oj e c t s .
(v)
BP Properties shall at its sole and absolute discretion engage the Vendor as the direct contractor or nominated sub-contractor of BP Properties in relation to the Products and Services for the Selected Development Projects and in either case, the contract documents (hereinafter referred to as “Contract Documents”) shall stipulate direct payment of the contract sum (hereinafter referred to as “Contract Sum”) (including payment for variation orders, if any) by the Company to the Vendor.
(vi)
the standard payment terms of the VFA(s) shall be for 5 years interest free, with the VFA value (subject to adjustments to include variation orders, if any) equally divided into 60 months’ instalments (hereinafter referred to as "VFA Instalment Schedule”) which shall commence within 30 days upon physical completion and handing over for the works covered under the Contract Documents (including all variation orders, if any).
(vii) BP Properties shall provide the e q u i v a l e n t security to the Vendor in the
form of corporate guarantee of Bina Puri and sufficient unsold properties as collaterals. The vendor shall be entitled to impose late payment interest rate of 18% per annum in respect of any late payment of instalments. (viii) Any default in the VFA Instalment Schedule for more than 3 consecutive months,
will cause the whole of the remaining i n s t a l l m e n t s ( hereinafter referred to as “the Remaining Debts”) become due and payable and without demand. T h e V e n d o r s h a l l h a v e a n option at any time to convert the Remaining Debts into Irredeemable Convertible Unsecured Loan Stock in BP Properties subject to the written consent of BP Properties. (ix)
4.
The Vendor has decided to allocate and standby for the application of BP Properties a credit limit of up to RM300 million o n l y for the Selected Development Projects over the span of the Availability Period.
RATIONALE FOR THE SIGNING OF THE FA The signing of the FA provides flexibility to Bina Puri Group for selection of products and services at competitive prices procured by the Vendor. The FA will contribute positively towards smooth project cash flow planning as the products and services will be paid with favourable deferred payment terms of 60 months with no interest charges. Bina Puri will expect a high level of service from the direct engagement with an established public listed company which may include its capabilities to fulfill the contracted delivery time and its ability to respond quickly to Bina Puri’s requirements. 2
5.
EFFECTS OF THE SIGNING OF THE FA The signing of the FA will not have any effect on the issued and paid-up share capital of Bina Puri and is not expected to have any material effect on the earnings, earnings per share, net assets per share and gearing of the group for the financial year ended 31 December 2015. However, it is expected to contribute positively towards the cash flow of the Selected Development Projects in the future. The effect of the signing of the FA can only be determined after entering into the separate VFA(s) between the Parties in respect of the Products and Services.
6.
DIRECTORS’ RECOMMENDATION The Board of Bina Puri, having considered all aspects of the FA, is of the opinion that the signing of the FA is in the best interest of Bina Puri.
7.
INTERESTS OF DIRECTORS, MAJOR SHAREHOLDERS AND/OR PERSONS CONNECTED Insofar as the Directors are aware, none of the Directors and/or major shareholders of Bina Puri and/or persons connected to them have any interests, direct or indirect, in the FA.
8.
APPROVALS REQUIRED The FA is not subject to the approval of Bina Puri’s shareholders.
9.
DOCUMENTS AVAILABLE FOR INSPECTION The FA is available for inspection at the registered office of Bina Puri at W i s m a Bi n a P ur i , 88 J al a n B uki t Id am an 8 / 1, B uki t Id am an , 68 10 0 S el a ya n g , S el an go r D ar u l Eh s an during normal business hours from Mondays to Fridays (except for public holidays) for a period of 3 months from the date of this announcement.
This announcement is dated 27 November 2015.
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