IVORY PROPERTIES GROUP BERHAD - Bursa Malaysia

IVORY PROPERTIES GROUP BERHAD (673211-M) Stock Name

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IVORY

Type

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GENERAL ANNOUNCEMENT

Subject

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OTHERS

Description

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SHARES SALE AND PURCHASE AGREEMENT BETWEEN IVORY PROPERTIES GROUP BERHAD AND ALSHEM VENTURE SDN BHD FOR THE PURCHASE OF THE ENTIRE ISSUED AND PAID UP SHARES IN ALSHEM DEVELOPMENT SDN BHD

1.

INTRODUCTION

1.1

The Board of Directors of Ivory Properties Group Berhad ("Ivory" ,”the Company" or “the Purchaser”) wishes to announce that the Company had, on 25 May 2016 entered into a Shares Sale and Purchase Agreement ("SSPA" or “Agreement”) with Alshem Venture Sdn Bhd (411248-A) (“AVSB” or “the Vendor”) for the acquisition of the entire 100% issued and paid up shares (“Sale Shares”) in Alshem Development Sdn Bhd (218937-A) (“ADSB”), comprising of 250,000 fully-paid ordinary shares of RM1-00 each (“OS”) for total cash consideration of RM17,760,000 (“Purchase Consideration”) (“Acquisition”).

2.

BACKGROUND INFORMATION The Acquisition entails the acquisition of all 100% equity interest in ADSB for cash consideration of RM17,760,000 free from all encumbrances and with all rights attached thereto, including, without limitation, all dividends and distributions paid or declared thereon as from the date of the SSPA and on the terms and conditions set out therein.

2.1

Information on AVSB or the Vendor AVSB, with its registered office at Room 1, 5th Floor, Bangunan Heng Guan, 171, Jalan Burma, 10050 Pulau Pinang and a place of business at Nos. 50-52 Lorong Selamat, 10400 Pulau Pinang, was incorporated as a private limited company in Malaysia under the Companies Act, 1965 (“the Act”) on 25 November 1996 under the name Petroint (M) Sdn Bhd and assumed its current name on 11 August 2000. The principal activity of AVSB is investment holding company. The Directors and equity holders of AVSB are: Name

Designation

Dato’ Teh King Them Tan Leng Huah Total

2.2

No of OS

% of holding

Director/Shareholder

500,000

50

Director/Shareholder

500,000

50

1,000,000

100.00

Information on ADSB ADSB was incorporated in Malaysia as a private company limited by shares under the Act on 14 June 1991 under the name of Awan Sanjung (M) Sdn Bhd before assuming its present name on 10 January 2002. The present authorised share capital of ADSB is RM500,000 consisting of 500,000 OS while its total issued and paid-up share capital is RM250,000 consisting of 250,000 fully paid OS. AVSB is the holding company of ADSB.

Ivory-1617-BursaAnnouncement-AlshemDev-SSA-F

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The registered office of ADSB is located at Room 1, 5th Floor, Bangunan Heng Guan, 171 Jalan Burma, 10050 Pulau Pinang and has its place of business at Nos. 50-52, Lorong Selamat, 10400 Pulau Pinang. The principal activity of ADSB is housing development.

3.

PURCHASE CONSIDERATION

3.1

Basis on arriving at the Purchase Consideration The Purchase Price was arrived at on a “willing buyer and willing seller” basis after having considered the completed low medium cost (“LMC”) housing project known as Desa Indah consisting of a total of four (4) blocks of buildings with low medium cost flats, shop-lots, car parking lots and other facilities and amenities as described below:(i)

Block A being a block of twenty (20) storey building with two hundred and twenty-one (221) units of LMC;

(ii)

Block B being two (2) blocks of buildings, one (1) block thereof, a twenty-three (23) storey building with five hundred and forty-seven (547) units of LMC and twenty (20) units of shoplots; and the other block thereof, an eight (8) storey building with five hundred and fifteen (515) units of car parking lots; and

(iii) Block C being a block of twenty (20) storey building with two hundred and four (204) units of LMC and ten (10) units of shoplots, all erected on Lots 1243, 1659 and 2115 in Mukim 13, Daerah Timur Laut at Jalan Paya Terubong, Pulau Pinang, which said housing project has been duly completed by ADSB in compliance with all laws rules and regulations and with strata titles issued to all the units so developed (“LMC Project”) and LMC Quota equivalent to the number of units of LMC developed under the LMC Project which remain unutilised (being a total of five hundred and forty-eight (548) units) legally and beneficially owned by ADSB and which can be used for purposes of complying with the requirement to build low medium cost housing as set forth by the relevant authority in a housing development in the State of Penang.

3.2

Mode of Payment The Purchase Consideration shall be effected in the manner as tabulated below and outlined in the Agreement: Terms Earnest payment paid prior to execution of the Agreement Payment upon execution of the Agreement

Amount (RM) 500,000.00 4,828,000.00

Balance purchase price to be paid upon completion of the Agreement

12,432,000.00

Total purchase consideration

17,760,000.00


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3.3

Sources of Funding The Purchase Consideration to be paid by Ivory will be funded by internally generated funds.

4.

SALIENT TERMS OF THE ACQUISITION

4.1

Salient terms of the Acquisition comprised the conditions precedents as stipulated in the SSPA and irrevocable guarantee and indemnity by AVSB as stated below. 4.1.1

The conditions precedent of the SSPA, as extracted from the SSPA, include among others, are as set out below. All definitions in this section shall have the same meaning as in the SSPA: 3.1

The obligations of the Parties to complete the sale and purchase of the Sale Shares herein are conditional upon the following conditions being fulfilled on or before the expiry of the Conditions Fulfilment Period or the Extended Conditions Fulfilment Period, as the case may be: 3.1.1.1 the Purchaser having completed the Due Diligence Audit on the Company in accordance with Clause 5.4; and 3.1.1.2 the written approval from the relevant authority approving the utilization of the LMC Quota by Ivory Group of Companies or any of them or any of their/its nominees and that such utilization shall be without any premiums, contributions or costs or any other conditions be it relates to payment of any moneys or otherwise being imposed by the relevant authority.

3.2

The Parties covenant and undertake with each other to forthwith after the date of this Agreement take all steps and do all things and execute all documents as shall be required to comply with and fulfill the conditions as stated in Clause 3.1.

3.3

The obligations of the Parties to complete the sale and purchase of the Sale Shares shall become unconditional on the date when the conditions referred to in Clause 3.1 (other than the conditions which have been waived by written agreement of the Parties) have been fulfilled or deemed to have been obtained pursuant to Clause 5.4 before the expiry of the Extended Conditions Fulfilment Period and such date shall be referred to herein as the “Unconditional Date”.

3.4

All costs and expenses incurred under Clauses 3.1.1 shall be borne by the Purchaser.

3.5

Upon the happening of any of the following events:3.5.1

Clause 3.1.1 is not fulfilled pursuant to Clause 5.5; or

3.5.2

Clause 3.1.2 cannot be fulfilled not due to any act or omission of the Vendor or the Company (of which the Vendor shall ensure) on the expiry of the Extended Conditions Fulfilment Period,

the Purchaser may at its option and absolute discretion:(i) continue with this Agreement whereupon the provisions herein shall apply to govern the relationship between the Parties in respect of the subject matter herein; or (ii) terminate this Agreement by giving written notice to the Vendor and upon receipt of such notice by the Vendor, this Agreement shall forthwith terminate and the provision in Clause 6.2 shall apply and have effect.


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4.1.2

5.

Dato’ Teh King Them and Mr. Tan Leng Huah shall both irrevocably, unconditionally, jointly and severally, undertake and covenant with the Company to fully guarantee and indemnify the Company on the fulfilment of all terms and conditions of AVSB in the SSPA.

LIABILITIES TO BE ASSUMED There are no liabilities, including contingent liabilities and guarantees to be assumed by Ivory pursuant to the Acquisition.

6.

RATIONALE FOR THE ACQUISITION The Acquisition is in line with Ivory’s initiative of making further strategic investment in Ivory’s core business of property development as consolidation of ADSB, following review of its potential earnings coupled with its LMC quota and all real properties owned by ADSB including the thirty-four (34) units of LMC as described under 3.1(a), as its wholly-owned subsidiary will allow Ivory to fully control its operations and business strategies, which would complement Ivory Group’s own business strategies. It is also expected for the Acquisition to contribute positively to the future earnings of the Group. The Acquisition will also allow Ivory to maintain its position as a key player in the property development industry in the northern region and to strengthen the financial position of Ivory and its subsidiaries (collectively “Ivory Group” or “Group”).

7.

FINANCIAL EFFECTS OF THE ACQUISITION

7.1

Share Capital and Substantial Shareholders’ Shareholding The Acquisition will not have any effect on the issued and paid-up share capital of Ivory and the substantial shareholders’ shareholding in Ivory.

7.2

Earnings and earnings per share The Acquisition will not have any effect on the earnings of the Ivory Group for the financial year ending 31 March 2017 (“FYE17”). The Acquisition is expected to contribute positively to the future earnings of Ivory Group.

7.3

Net Assets (“NA”) and Gearing The Acquisition is not expected to have any material effect on the audited consolidated NA per share and consolidated gearing of Ivory for FYE17.

7.4

Highest percentage ratio The highest percentage ratio applicable to the Proposed Acquisition is 4.4% pursuant to paragraph 10.02(g) of the Main Market Listing Requirements of Bursa Malaysia Securities Berhad.


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8.

ESTIMATED TIME FRAME FOR COMPLETION The acquisition is estimated to be completed by first half of year 2017.

9.

APPROVALS REQUIRED The acquisition is not subject to approval from any other regulatory authority(ies) or shareholders.

10.

INTEREST OF THE DIRECTORS AND MAJOR SHAREHOLDERS AND PERSONS CONNECTED TO THEM None of the major shareholders and Directors of Ivory and/or persons connected with them have any interest, direct or indirect in the Acquisition.

11.

STATEMENT BY THE BOARD The Board of Directors, after having considered all relevant aspects of the Acquisition, is of the opinion that the Acquisition is in the best interest of the Company.

12.

RISK FACTORS There are no foreseeable risk factors involved in the Acquisition save as below and the Acquisition is not expected to change the risk profile of Ivory Group. The Acquisition to be undertaken by Ivory are subject to the risks inherent in the property development and construction industries, which include, but are not limited to, competition risks, unstable global and domestic economic conditions, currency fluctuations, unfavourable interest rate movements, inflation hike, shortages of raw materials and labour, increase in cost of capital, political instability, changes in government initiatives, changes in statutory regulations and legal disputes.

13.

DOCUMENTS FOR INSPECTION The Agreement will be made available for inspection at the Registered Office of the Company at Suite 16-1 (Penthouse Upper), Menara Penang Garden, 42A Jalan Sultan Ahmad Shah 10050 Penang during normal working hours from Mondays to Fridays (except public holidays) for a period of three (3) months from the date of this announcement.

This announcement is dated 25 May 2016.


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