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9TH DRAFT FOR DISCUSSION TAP/Annt/Draft dated 8 June 2004
Submitting Merchant Bank: Alliance Merchant Bank Berhad
Company name : TAP RESOURCES BERHAD
Stock name : TAP
Stock code : 7038
Contact person : Andrew Su\Azman Abdullah\ W Azhar
Designation : Associate Director \D. Manager \ S Exec.
Contact no : 03-2722 1540
Email : azman@alliancemerchant.com.my
Type : Announcement ( ) Reply to query
I - PROPOSED ACQUISITION OF TIMES ENTERPRISE CO. LTD.
- PROPOSED ACQUISITION OF SULTA NATE INTERIORS CO. LTD.
- PROPOSED ACQUISITION OF TRANSTURBO ENGINEERING SDN BHD
- PROPOSED ACQUISITION OF SPECIALIST GROUTING ENGINEERS SDN BHD
- PROPOSED ACQUISITION OF KALANSA ENERGY CORPORATION SDN BHD
- PROPOSED ACQUISITION OF SUNQUEST SDN BHD
- PROPOSED ACQUISITION OF ELASTIC QUANTUM SDN BHD
(HEREINAFTER REFERRED TO AS “PROPOSED ACQUISITIONS”)
II PROPOSED RIGHTS ISSUE
III PROPOSED INCREASE IN THE AUTHORISED SHARE CAPITAL OF TAP
(HEREINAFTER COLLECTIVELY REFERRED TO AS “PROPOSALS”)
1.0 INTRODUCTION
1.1 On behalf of the Board of Directors of TAP Resources Berhad (“TAP” or
”Company”), Alliance Merchant Bank Berhad (“Alliance”) wishes to announce that the
Company proposes to undertake the following proposals:
(i) Proposed Times Enterprise Acquisition - Proposed acquisition of 1,470,000
ordinary shares of Thai Baht 10 each in Times Enterprise Co. Ltd (“Times
Enterprise”) (“Times Enterprise Shares”) representing 49% equity interest in Times
Enterprise for a total purchase consideration of RM6,860,000 to be satisfied by the
issuance of 6,860,000 new ordinary shares of RM1.00 each in TAP (“TAP Shares”) at
par;
(ii) Proposed Sulta Nate Acquisition - Proposed acquisition of 2,400 ordinary shares of
Thai Baht 100 each in Sulta Nate Interiors Co. Ltd (“Sulta Nate”) (“Sulta Nate
Shares”) representing 48% equity interest in Sulta Nate for a total purchase
consideration of RM336,000 to be satisfied by the issuance of 336,000 new TAP
Shares at par; Formatted: Bullets and Numbering
Formatted: Bullets and Numbering
(iii) Proposed Transturbo Acquisition - Proposed acquisition of 510,000 ordinary
shares of RM1.00 each in Transturbo Engineering Sdn Bhd (“Transturbo”) Formatted: Bullets and Numbering
(“Transturbo Shares”) representing 51% equity interest in Transturbo for a total Formatted: Numbered + Level: 1 +
purchase consideration of RM4,335,000 to be satisfied by the issuance of 4,335,000 Numbering Style: i, ii, iii, … + Start at: 1 +
new TAP Shares at par; Alignment: Left + Aligned at: 0.5" + Tab after:
1" + Indent at: 1"
(iii) Formatted: Bullets and Numbering
(iv) Formatted: Font: Bold
(v)Proposed SGE Acquisition - Proposed acquisition of 360,030 ordinary shares of RM1.00
each in Specialist Grouting Engineers Sdn Bhd (“SGE”) (“SGE Shares”) representing Formatted: Font: Bold
60% equity interest in SGE for a total purchase consideration of RM10,800,000 to be Formatted: Font: Bold
satisfied by the issuance of 10,800,000 new TAP Shares at par; Formatted: Numbered + Level: 1 +
Numbering Style: i, ii, iii, … + Start at: 1 +
(iv) Alignment: Left + Aligned at: 0.5" + Tab after:
1" + Indent at: 1"
1
9TH DRAFT FOR DISCUSSION TAP/Annt/Draft dated 8 June 2004
P
(v) Proposed Kalansa Acquisition - Proposed acquisition of 1,000,000 ordinary shares Formatted: Numbered + Level: 1 +
of RM1.00 each in Kalansa Energy Corporation Sdn Bhd (“Kalansa”) (“Kalansa Numbering Style: i, ii, iii, … + Start at: 1 +
Shares”) representing the entire equity interest in Kalansa for a total purchase Alignment: Left + Aligned at: 0.5" + Tab after:
1" + Indent at: 1"
consideration of RM9,000,000 to be satisfied by the issuance of 9,000,000 new TAP
Shares at par; Formatted: Bullets and Numbering
Formatted: Font: Not Bold
(v)(vi) Proposed Sunquest Acquisition - Proposed acquisition of 1,000,000 ordinary
shares of RM1.00 each in Sunquest Sdn Bhd (“Sunquest”) (“Sunquest Shares”)
representing the entire equity interest in Sunquest for a total purchase consideration
of RM11,000,000 to be satisfied by the issuance of 11,000,000 new TAP Shares at
par;
(vi)(vii) Proposed Elastic Quantum Acquisition - Proposed acquisition of 765,001 ordinary
shares of RM1.00 each in Elastic Quantum Sdn Bhd (“Elastic Quantum”) (“Elastic
Quantum Shares”) representing 51% equity interest in Elastic Quantum for a total
purchase consideration of RM7,500,000 to be satisfied by the issuance of 7,500,000
new TAP Shares at par;
Hereinafter, the Proposed Times Enterprise Acquisition, Proposed Sulta Nate Acquisition,
Proposed Transturbo Acquisition, Proposed SGE Acquisition, Proposed Kalansa Acquisition,
Proposed Sunquest Acquisition and Proposed Elastic Quantum Acquisition are collectively
referred to as the Proposed Acquisitions.
(vii)(viii) Proposed Rights Issue - Proposed renounceable two-call rights issue of up to
70,445,093 new TAP Shares (“Rights Shares”) together with up to 35,222,547
detachable warrants (“Warrants”) on the basis of two (2) Rights Shares together with
one (1) free Warrant for every four (4) existing TAP Shares held, at par, payable in
two (2) calls, as follows:-
(i) the first call of RM0.70 will be payable in cash upon application; and
(ii) the second call of the remaining RM0.30 will be payable out of the
Company’s share premium account; and
(viii)(ix) Proposed Increase in Authorised Share Capital - Proposed increase in the
authorised share capital of TAP from RM200,000,000 comprising 200,000,000 TAP
Shares to RM1,000,000,000 comprising 1,000,000,000 TAP Shares.
Hereinafter, the Proposed Acquisitions, Proposed Rights Issue and Proposed Increase in
Authorised Share Capital are collectively referred to as the Proposals.
The Proposed Times Enterprise Acquisition, Proposed Sulta Nate Acquisition, Proposed
Transturbo Acquisition, Proposed SGE Acquisition, Proposed Kalansa Acquisition, Proposed
Sunquest Acquisition, Proposed Elastic Quantum Acquisition and Proposed Rights Issue are
not inter-conditional on each other.
The Proposed Acquisitions and Proposed Rights Issue are conditional on the Proposed
Increase in Authorised Share Capital.
2.0 PROPOSED TIMES ENTERPRISE ACQUISITION
2.1 Details of the Proposed Times Enterprise Acquisition
TAP had, on 8 June 2004, entered into a conditional sale and purchase agreement (“Times
Enterprise SPA”) with Mr Edward Sam How Soong to acquire 1,470,000 Times Enterprise
Shares representing 49% equity interest in Times Enterprise for a total purchase
consideration of RM6,860,000 to be satisfied by the issuance of 6,860,000 new TAP Shares
at par.
Formatted: Font: Bold
Formatted: Bullets and Numbering
2
9TH DRAFT FOR DISCUSSION TAP/Annt/Draft dated 8 June 2004
2.2Information on Times Enterprise
Formatted: Normal, Justified, Indent: Left:
2.2 Information on Times Enterprise 0", First line: 0"
Formatted: Font: Bold
Times Enterprise was registered in Thailand under the provision of the civil and Commercial
Code as juristic person in the category of Limited Company on 16 October 1998. Its present
registered share capital is Thai Baht 30,000,000 comprising 3,000,000 Times Enterprise
Shares of which 3,000,000 Times Enterprise Shares are issued and fully paid-up.
Times Enterprise is principally engaged in general contracting, interior decorating, mechanical
and electrical contracting.
As at to-date, the substantial shareholders of Times Enterprise are as follows:-
< ---- Direct ---- >
Name No. of shares %
Mr Edward Sam How Soong 1,470,000 49.0
Mrs Wassana Ploothajit 599,987 20.0
Mr Somchai Ditkhum 519,001 17.3
Ms Yaowarat Yangjainuk 150,006 5.0
Sulta Nate 150,000 5.0
3
9TH DRAFT FOR DISCUSSION TAP/Annt/Draft dated 8 June 2004
As at to-date, the Directors of Times Enterprise are as follows:-
< ---- Direct ---- > Citizenship
Name of Director No. of shares %
Mr Sam Chak Long - - Malaysian
Mr Edward Sam How Soong 1,470,000 49.0 Malaysian
Times Enterprise does not have any subsidiary or associated companies.
Set out below is a summary of key audited/ unaudited financial information on Times
Enterprise:-
< ------Financial Year Ended 31 December -------- >
<------- Audited -------> Unaudited
1999 2000 2001 2002 2003
Turnover (RM’000) 4,161 5,368 8,027 17,723 20,178
Profit before tax (RM’000) 347 345 627 858 1,843
Profit after tax (RM’000) 234 220 420 511 1,843
Paid-up share capital (RM’000) 94 468 1,872 2,808 2,808
Shareholders’ funds (RM’000) 317 912 2,735 4,182 5,576
Net Tangible Assets (“NTA”) (RM’000) 317 912 2,735 4,182 5,576
NTA per share (RM) 0.32 0.18 0.14 0.14 0.19
Total borrowings (RM’000) -! - 636 1,053 1,249
Net earnings per share (RM) 0.23 0.04 0.02 0.02 0.06
Notes:
Converted based on the foreign exchange rate of RM9.36 =Thai Baht 100. (Source: The Star Formatted: Indent: Left: 0.5", First line: 0"
–Average buying and selling opening rates by Maybank on 3 June 2004)
2.22.3 Basis of Arriving at the Purchase Consideration
The purchase consideration for the Proposed Times Enterprise Acquisition of RM6,860,000
was arrived at on a “willing-buyer willing-seller” basis after taking into consideration the future
earnings potential of Times Enterprise.
2.32.4 Information on the Vendors of Times Enterprise
The vendor of Times Enterprise and his shareholding to be acquired is as follows:-
No. of shares to be Percentage of
Name of vendors acquired equity interest
%
Mr Edward Sam How Soong 1,470,000 49.0
Total 1,470,000 49.0
4
9TH DRAFT FOR DISCUSSION TAP/Annt/Draft dated 8 June 2004
2.42.5 Original Dates and Cost of Investments
The details of the original dates and costs of investments of the vendor of Times Enterprise
are as follows:
Date of
investment by No. of shares Cost of
Name of vendors vendor acquired investment
RM
Mr Edward Sam How Soong 16 March 1999 39,000 36,504
6 June 2000 156,000 146,016
19 February 2001 195,000 182,520
30 July 2002 80,000 74,880
28 February 2003 1,000,000 936,000
Total 1,470,000 1,375,920
Notes:
Converted based on the foreign exchange rate of RM9.36 =Thai Baht 100. (Source: The Star
–Average buying and selling opening rates by Maybank on 3 June 2004)
2.52.6 Salient Features of the Times Enterprise SPA
2.6.1 The Proposed Times Enterprise Acquisition is conditional upon the fulfilment of the following
within nine months from the date of the Times Enterprise SPA or such extended period as
may be mutually agreed upon by the parties to the Times Enterprise SPA:-
(a) TAP obtaining the approval of the Securities Commission (“SC”) for the Proposed
Times Enterprise Acquisition and the issue of the 6,860,000 new TAP Shares;
(b) TAP obtaining the approval of the Foreign Investment Committee (“FIC”) for the
Proposed Times Enterprise Acquisition (if applicable);
(c) TAP obtaining the approval of its shareholders in a general meeting for the Proposed
Times Enterprise Acquisition and the issue of the 6,860,000 new TAP Shares;
(d) TAP obtaining the approval-in-principal of Bursa Malaysia Securities Berhad (formerly
known as Malaysia Securities Exchange Berhad) (“Bursa Malaysia”) for the listing
and quotation of the 6,860,000 new TAP Shares;
(e) TAP obtaining the approval of AmTrustee Berhad (“AmTrustee”) for the acquisition of
Times Enterprise Shares pursuant to and in accordance with the:
(i) Trust deed dated 8 April 2003 relating to the issuance of the 2% 3 year
irredeemable convertible unsecured loan stocks 2003/2006 (“ICULS”) with an
aggregate nominal value of RM43,178,831;
(ii) Trust deed dated 8 May 2003 relating to the issuance of up to RM17,503,000
nominal value 5% 3 year redeemable convertible secured loan stock
(“RCSLS”) to AmBank Berhad (“RCSLS-A”);
(iii) Trust deed dated 8 May 2003 relating to the issuance of up to RM10,066,000
nominal value 5% 3 year RCSLS to AmMerchant Bank Berhad (“RCSLS-B”);
(iv) Trust deed dated 8 May 2003 relating to the issuance of up to RM9,065,000
nominal value 5% 3 year RCSLS to Hong Leong Bank Berhad (“RCSLS-C”);
(hereinafter the items (e)(i) to (iv) are referred to as the “Trust Deeds”);
(f) TAP obtaining the approval of Hong Leong Bank Berhad for the issue of the new TAP
Shares pursuant to and in accordance with the trust deed in relation to RCSLS-C;
5
9TH DRAFT FOR DISCUSSION TAP/Annt/Draft dated 8 June 2004
Formatted: Not Highlight
(g) TAP obtaining the approvals from Bank Negara Malaysia (“BNM”) for the issue of the Formatted: Bullets and Numbering
6,860,000 new TAP Shares;
Formatted: Not Highlight
(g)(h) The completion of an acquisition due diligence review on Times Enterprise conducted Formatted: Indent: Left: 0.5"
and TAP being satisfied with the results of the review; Formatted: Bullets and Numbering
(h)(i) Mr Edward Sam How Soong procuring and obtaining the written consents of all Formatted: Bullets and Numbering
existing lenders of Times Enterprise whose approvals are required for the sale and
purchase of the Times Enterprise Shares subject to terms and conditions acceptable
to the parties to the Proposed Times Enterprise Acquisition; and
(i)(j) the parties to the Times Acquisition SPA obtaining all the other approvals from the Formatted: Bullets and Numbering
relevant authority which are necessary for the completion of the Times Enterprise
SPA.
2.6.2 Liabilities and Encumbrances
The Times Enterprise Shares shall be transferred to TAP free from all claims, charges, liens,
encumbrances and equities whatsoever together with all rights attached thereto and all
dividend, rights and distribution declared paid or made in respect thereof (on or before the
expiry of three (3) months from the date on which the last of the conditions precedent set out
in the Times Enterprise SPA are fulfilled pursuant to and in accordance with the provisions of
the Times Enterprise SPA) at the purchase price payable to Mr Edward Sam How Soong
upon the terms and subject to the conditions of the Times Enterprise SPA.
Based on the unaudited accounts as at 31 December 2003, Times Enterprise has total
liabilities of approximately Thai Baht 76,451,403 equivalent to approximately RM7,155,851
which comprise bank borrowings, trade account payables and other liabilities. The liabilities
will remain in Times Enterprise and will be repaid in the ordinary course of business. Apart
from the above, TAP will not assume any other liabilities arising from the Proposed Times
Enterprise Acquisition.
3.0 PROPOSED SULTA NATE ACQUISITION
3.1 Details of the Proposed Sulta Nate Acquisition
TAP had, on 8 June 2004, entered into a conditional sale and purchase agreement (“Sulta
Nate SPA”) with Mr Edward Sam How Soong to acquire 2,400 Sulta Nate Shares
representing 48% equity interest in Sulta Nate for a total purchase consideration of
RM336,000 to be satisfied by the issuance of 336,000 new TAP Shares at par.
3.2 Information on Sulta Nate
Sulta Nate was registered in Thailand under the provision of the civil and Commercial Code
as juristic person in the category of Limited Company on 201 May 2004. Its present registered
share capital is Thai Baht 500,000 comprising 5,000 Sulta Nate Shares of which 5,000 Sulta
Nate Shares are issued and fully paid-up.
Sulta Nate is principally engaged in the business of interior workshandling formation, internal
decoration, electrical system, watering and air condition system services.
6
9TH DRAFT FOR DISCUSSION TAP/Annt/Draft dated 8 June 2004
As at to-date, the substantial shareholders of Sulta Nate are as follows:-
< ---- Direct ---- >
Name No. of shares %
Mr Edward Sam How Soong 2,400 48.0
Mr Somchai Ditkhum 550 11.0
Mrs Kwanjai Thongphitak 550 11.0
Ms Srinuan KongKoh 375 7.5
Mrs Wassana Ploothajit 375 7.5
Ms Amomrat Rongchai 375 7.5
Ms Yaowarat Yangjainuk 375 7.5
As at to-date, the Directors of Sulta Nate are as follows:-
< ---- Direct ---- > Citizenship
Name of Director No. of shares %
Mr Edward Sam How Soong 2,400 48.0 Malaysian
Sulta Nate does not have any subsidiary companies. Details of the associate company of
Sulta Nate are as follows:
Name of Associated Interest held by
Company Sulta Nate (%) Principal Activities
Times Enterprise 5.0 Times Enterprise is principally
engaged in general contracting,
interior decorating, mechanical
and electrical contracting.
There are no financial statements for Sulta Nate as it is newly incorporated.
3.3 Basis for Arriving at the Purchase Consideration
The purchase consideration for the Proposed Sulta Nate Acquisition of RM336,000 was
arrived at on a “willing-buyer willing-seller” basis after taking into consideration Sulta Nate’s
interest in Times Enterprise and the future earnings potential of Times Enterprise.
3.4 Information on the Vendor of Sulta Nate
The vendor of Sulta Nate and his shareholding to be acquired is as follows:-
No. of shares to be Percentage of
Name of vendor acquired equity interest
%
Mr Edward Sam How Soong 2,400 48.0
Total 2,400 48.0
7
9TH DRAFT FOR DISCUSSION TAP/Annt/Draft dated 8 June 2004
3.5 Original Dates and Cost of Investments
The details of the original dates and costs of investments of the vendor of Sulta Nate are as
follows:
Date of No. of
investment by shares Cost of
Name of vendor vendor acquired investment
^RM
Mr Edward Sam How Soong 20 May 2004 2,400 22,464
Total 2,400 22,464
^ Thai Baht 100= RM9.36. (Source: The Star –Average buying and selling opening
rates by Maybank Berhad on 3 June 2004)
3.6 Salient Features of the Sulta Nate SPA
3.6.1 The Proposed Sulta Nate Acquisition is conditional upon the fulfilment of the following within
nine months from the date of the Sulta Nate SPA or such extended period as may be mutually
agreed upon by the parties to the Sulta Nate SPA:-
(a) TAP obtaining the approval of the SC for the Proposed Sulta Nate Acquisition and the
issue of the 336,000 new TAP Shares;
(b) TAP obtaining the approval of the FIC for the Proposed Sulta Nate Acquisition (if
applicable);
(c) TAP obtaining the approval of its shareholders in a general meeting for the Proposed
Sulta Nate Acquisition and the issue of the 336,000 new TAP Shares;
(d) TAP obtaining the approval-in-principal of Bursa Malaysia for the listing and quotation
of the 336,000 new TAP Shares;
(e) TAP obtaining the approval of AmTrustee for the Proposed Sulta Nate Acquisition
pursuant to and in accordance with the Trust Deeds;
(f) TAP obtaining the approval of Hong Leong Bank Berhad for the issue of the new TAP
Shares pursuant to and in accordance with the trust deed in relation to RCSLS-C;
(g) TAP obtaining the approvals from BNM for the issue of the 336,000 new TAP Shares Formatted: Not Highlight
(if applicable); Formatted: Bullets and Numbering
(g)(h) the completion of an acquisition due diligence review on Sulta Nate conducted and Formatted: Not Highlight
TAP being satisfied with the results of the review; Formatted: Bullets and Numbering
(h)(i) Mr Edward Sam How Soong procuring and obtaining the written consents of all Formatted: Bullets and Numbering
existing lenders of Sulta Nate whose approvals are required for the sale and
purchase of the Sulta Nate Shares subject to terms and conditions acceptable to the
parties to the Sultanate SPA; and
(i)(j) the parties to the Sultanate SPA obtaining all the other approvals from the relevant Formatted: Bullets and Numbering
authority which are necessary for the completion of the Sulta Nate SPA.
8
9TH DRAFT FOR DISCUSSION TAP/Annt/Draft dated 8 June 2004
3.6.2 Liabilities and Encumbrances
The Sulta Nate Shares shall be transferred to TAP free from all claims, charges, liens,
encumbrances and equities whatsoever together with all rights attached thereto and all
dividend, rights and distribution declared paid or made in respect thereof (on or before the
expiry of three (3) months from the date on which the last of the conditions precedent set out
in the Sulta Nate SPA are fulfilled pursuant to and in accordance with the provisions of the
Sulta Nate SPA) at the purchase price payable to Mr Edward Sam How Soong upon the
terms and subject to the conditions of the Sulta Nate SPA.
Sulta Nate was incorporated on 211 May 2004. As such, TAP will not be assuming any
liabilities arising from the Proposed Sulta Nate Acquisition.
4.0 PROPOSED TRANSTURBO ACQUISITION
4.1 Details of the Proposed Transturbo Acquisition
TAP had, on 8 June 2004, entered into a conditional sale and purchase agreement
(“Transturbo SPA”) with Mr Khoo Koay Hock and Encik Mohd Roszaini bin Mohd Yusup to
acquire in aggregate 510,000 Transturbo Shares representing 51% equity interest in
Transturbo for a total purchase consideration of RM4,335,000 to be satisfied by the issuance
of 4,335,000 new TAP Shares at par.
4.2 Information on Transturbo
Transturbo was incorporated in Malaysia on 17 October 1985 under the Companies Act, 1965
(“Act”) as a private limited company. Its present authorised share capital is RM1,000,000
comprising 1,000,000 Transturbo Shares of which 1,000,000 Transturbo Shares are issued
and fully paid-up.
Transturbo is principally engaged in the business of undertaking civil, mechanical and
electrical works.
As at to-date, the substantial shareholders of Transturbo are as follows:-
< ---- Direct ---- >
Name No. of shares %
Mr Khoo Koay Hock 490,000 49.0
Encik Hashim Bin Zainuddin 410,000 41.0
Encik Mohd Roszaini Bin Mohd Yusup 100,000 10.0
As at to-date, the Directors of Transturbo are as follows:-
< ---- Direct ---- > Citizenship
Name of Director No. of shares %
Mr Khoo Koay Hock 490,000 49.0 Malaysian
Encik Hashim Bin Zainuddin 410,000 41.0 Malaysian
Transturbo does not have any subsidiary or associated companies.
9
9TH DRAFT FOR DISCUSSION TAP/Annt/Draft dated 8 June 2004
Set out below is a summary of key audited/ unaudited financial information on Transturbo:-
< ------Financial Year Ended 31 December -------- >
<------- Audited -------> Unaudited
1999 2000 2001 2002 2003
Turnover (RM’000) 3,748 6,914 6,617 6,909 4,922
Profit before tax (RM’000) 308 339 93 172 145
Profit after tax (RM’000) 308 244 72 92 106
Paid-up share capital (RM’000) 500 500 700 1,000 1,000
Shareholders’ funds (RM’000) 326 570 841 1,234 8,554
NTA (RM’000) 326 570 841 1,234 8,554
NTA per share (RM) 0.65 1.14 1.20 1.23 8.55
Total borrowings (RM’000) 1,037 759 768 4,343 2,874
Net earnings per share (sen) 61.60 48.80 10.29 9.20 10.66
4.3 Basis for Arriving at the Purchase Consideration
The purchase consideration for the Proposed Transturbo Acquisition of RM4,335,000 was
arrived at on a “willing-buyer willing-seller” basis after taking into consideration the unaudited
NTA of Transturbo as at 31 December 2003 (“Transturbo Unaudited NTA”).
In the event that the audited NTA as at 31 December 2003 (“Transturbo Audited NTA”):
(a) exceeds the Transturbo Unaudited NTA, there shall be no adjustments made to the
purchase consideration of RM4,335,000 and the 4,335,000 new TAP Shares to be
issued in satisfaction thereof; or
(b) is less than the Transturbo Unaudited NTA, the vendors of Transturbo undertake to
pay to TAP in proportions to their shareholding of the sale shares as set out in
Schedule 1 of the Transturbo SPA, the amount equivalent to the difference in value
between the Transturbo Audited NTA and the Transturbo Unaudited NTA in cash on
or before the expiry of three (3) months from the date the Transturbo SPA becomes
unconditional (“Transturbo Completion Date”) failing which the vendors of Transturbo
shall pay to TAP interest as stipulated in the Trasnsturbo SPA in addition to the
aforesaid differential sum.
As soon as the Transturbo SPA becomes unconditional (“Transturbo Unconditional Date”),
the parties to the Transturbo SPA shall procure the preparation of the audited accounts of
Transturbo for the period commencing from 1 January 2004 up to the last day of the calendar Formatted: Font: (Default) Arial, 10 pt, Not
month in which the Transturbo SPA becomes unconditional Transturbo Unconditional Date Highlight
(“Transturbo Completion Accounts”). Formatted: Font: (Default) Arial, 10 pt, Not
Highlight
In the event that the Transturbo Completion Accounts reflect that:-
(a) Transturbo has made a profit during the period covered under Transturbo Completion
Accounts, subject to the circumstances prevailing at the relevant time, all profits
accrued (after deducting all exclusionary items and the relevant tax payable in
respect thereof) shall be declared as dividend and distributed among the vendors and
the other shareholders of Transturbo in accordance with the applicable laws and the
Articles of Association of Transturbo; or
(b) Transturbo has suffered a loss during the period covered under the Transturbo
Completion Accounts, the vendors of Transturbo undertake to pay to Transturbo in
proportions to their shareholding of the sale shares as set out in Schedule 1 of the
Transturbo SPA the amount equivalent to such loss suffered by Transturbo in cash
on or before the Transturbo Completion Date failing which the vendors of Transturbo
shall pay to Transturbo interest as stipulated in the Transsnturbo SPA in addition to
the aforesaid sum equivalent to such loss.
10
9TH DRAFT FOR DISCUSSION TAP/Annt/Draft dated 8 June 2004
Formatted: Font: Bold
4.4 Information on the Vendors of Transturbo
The vendors of Transturbo and their shareholdings to be acquired are as follows:-
No. of shares to be Percentage of
Name of vendors acquired equity interest
%
Khoo Koay Hock 410,000 41.0
Mohd Roszaini bin Mohd Yusup 100,000 10.0
Total 510,000 51.0
4.5 Original Dates and Cost of Investments
The details of the original dates and costs of investments of the vendors of Transturbo are as
follows:
Date of
investment by No. of shares Cost of
Name of vendors vendor acquired / (disposed) investment
RM
Mr Khoo Koay Hock 17 October 1985 1 1
30 October 1985 1,499 1,499
25 July 1989 13,500 13,500
4 March 1991 15,000 15,000
25 August 1992 45,000 45,000
18 June 1993 65,000 65,000
22 September 1994 160,000 160,000
26 April 1995 71,000 71,000
5 June 1996 50,000 40,000
4 January 1999 (300,000) (300,000)
15 March 2001 225,000 225,000
20 September 2001 154,000 154,000
26 March 2002 130,000 106,600
31 May 2002 270,000 270,000
24 December 2003 (410,000) (410,000)
Encik Mohd Roszaini 24 December 2003 100,000 100,000
bin Mohd Yusup
Total 590,000 556,600
4.6 Salient Features of the Transturbo SPA
4.6.1 The Proposed Transturbo Acquisition is conditional upon the fulfilment of the following within
nine months from the date of the Transturbo SPA or such extended period as may be
mutually agreed upon by the parties to the Transturbo SPA:-
(a) TAP obtaining the approval of the SC for the Proposed Transturbo Acquisition and
the issue of the 4,335,000 new TAP Shares;
(b) TAP obtaining the approval of the FIC for the Proposed Transturbo Acquisition (if
applicable);
11
9TH DRAFT FOR DISCUSSION TAP/Annt/Draft dated 8 June 2004
(c) TAP obtaining the approval of its shareholders in a general meeting for the Proposed
Transturbo Acquisition and the issue of the 4,335,000 new TAP Shares;
(d) TAP obtaining the approval-in-principal of Bursa Malaysia for the listing and quotation
of the 4,335,000 new TAP Shares;
(e) TAP obtaining the approval of AmTrustee for the Proposed Transturbo Acquisition
pursuant to and in accordance with the Trust Deeds;
(f) TAP obtaining the approval of Hong Leong Bank Berhad for the issue of the new TAP
Shares pursuant to and in accordance with the trust deed in relation to RCSLS-C;
(g) The completion of an acquisition due diligence review on Transturbo conducted and
TAP being satisfied with the results of the review;
(h) Mr Khoo Koay Hock and Encik Mohd Roszaini bin Mohd Yusup procuring and
obtaining the written consents of all existing lenders of Transturbo whose approvals
are required for the sale and purchase of the Transturbo Shares subject to terms and
conditions acceptable to the parties to the Transturbo SPA; and
(i) the parties to the Transturbo SPA obtaining all the other approvals from the relevant
authority which are necessary for the completion of the Transturbo SPA.
4.6.2 Liabilities and Encumbrances
The Transturbo Shares shall be transferred to TAP free from all claims, charges, liens,
encumbrances and equities whatsoever together with all rights attached thereto and all
dividend, rights and distribution declared paid or made in respect thereof (on or before the
expiry of three (3) months from the date on which the last of the conditions precedent set out
in the Transturbo SPA are fulfilled pursuant to and in accordance with the provisions of the
Transturbo SPA) at the purchase price payable to Mr Khoo Koay Hock and Encik Mohd
Roszaini bin Mohd Yusup upon the terms and subject to the conditions of the Transturbo
SPA.
Based on the unaudited accounts as at 31 December 2003, Transturbo has total liabilities of
approximately RM5,177,323 which comprise bank borrowings, creditors, accruals, amount
owing to directors and provision for deferred tax. The liabilities will remain in Transturbo and
will be repaid in the ordinary course of business. Apart from the above, TAP will not assume
any other liabilities arising from the Proposed Transturbo Acquisition.
5.0 PROPOSED SGE ACQUISITION
5.1 Details of the Proposed SGE Acquisition
TAP had, on 8 June 2004, entered into a conditional sale and purchase agreement (“SGE
SPA”) with Mr Aw Ho Choon, Mr Su Ah Kau and Mr Yu Hain Teck to acquire in aggregate
360,030 SGE Shares representing 60% equity interest in SGE for a total purchase
consideration of RM10,800,000 to be satisfied by the issuance of 10,800,000 new TAP
Shares at par.
5.2 Information on SGE
SGE was incorporated in Malaysia on 18 July 1986 under the Act as a private limited
company. Its present authorised share capital is RM1,000,000 comprising 1,000,000 SGE
Shares of which 600,050 SGE Shares are issued and fully paid-up.
SGE is principally engaged in the business of civil engineering and general contractor,
engineering services, grouting, supervision and repair works.
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9TH DRAFT FOR DISCUSSION TAP/Annt/Draft dated 8 June 2004
As at to-date, the substantial shareholders of SGE are as follows:-
< ---- Direct ---- >
Name No. of shares %
Mr Aw Ho Choon 240,020 40.0
Mr Su Ah Kau 180,015 30.0
Mr Yu Hain Teck 180,015 30.0
As at to-date, the Directors of SGE are as follows:-
< ---- Direct ---- > Citizenship
Name of Director No. of shares %
Mr Aw Ho Choon 240,020 40.0 Malaysian
Mr Su Ah Kau 180,015 30.0 Malaysian
Mr Yu Hain Teck 180,015 30.0 Malaysian
SGE does not have any subsidiary or associated companies.
Set out below is a summary of key audited/ unaudited financial information on SGE:
< ------Financial Year Ended 30 September -------- >
<------------ Audited -------------> Unaudited
1999 2000 2001 2002 2003
Turnover (RM’000) 13,547 11,230 14,888 9,972 15,047
Profit before tax (RM’000) 93 1 221 301 1,303
Profit/(loss) after tax (RM’000) 76 (64) 106 195 943
Paid-up share capital (RM’000) 600 600 600 600 600
Shareholders’ funds (RM’000) 778 714 821 1,016 19,467
NTA (RM’000) 778 714 821 1,016 19,467
NTA per share (RM) 1.30 1.19 1.37 1.69 32.44
Total borrowings (RM’000) 3,184 3,120 3,516 2,825 2,288
Net earnings/(loss) per (sen) 12.67 (10.67) 17.67 32.5 157
share
5.3 Basis for Arriving at the Purchase Consideration
The purchase consideration for the Proposed SGE Acquisition of RM10,800,000 was arrived
at on a “willing-buyer willing-seller” basis after taking into consideration the unaudited NTA of
SGE as at 30 September 2003(“SGE Unaudited NTA”).
In the event that the audited NTA as at 30 September 2003 (“SGE Audited NTA”):
(a) exceeds the SGE Unaudited NTA, there shall be no adjustments made to the
purchase consideration of RM10,800,000 and the 10,800,000 new TAP Shares to be
issued in satisfaction thereof; or
(b) is less than the SGE Unaudited NTA, the vendors of SGE undertake to pay to TAP in
proportions to their shareholding of the sale shares as set out in Schedule 1 of the
SGE SPA, the amount equivalent to the difference in value between the SGE Audited
NTA and the SGE Unaudited NTA in cash on or before the expiry of three (3) months
from the date the SGE SPA becomes unconditional (“SGE Completion Date”) failing
which the vendors of Transturbo shall pay to TAP interest as stipulated in the SGE
SPA in addition to the aforesaid differential sum.
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9TH DRAFT FOR DISCUSSION TAP/Annt/Draft dated 8 June 2004
As soon as the SGE SPA becomes unconditional (“SGE Unconditional Date”), the parties to
the SGE SPA shall procure the preparation of the audited accounts of SGE for the period
commencing from 1 October 2003 up to the last day of the calendar month in which the SGE Formatted: Font: (Default) Arial, 10 pt, Not
SPA becomes unconditionalSGE Unconditional Date (“SGE Completion Accounts”). Highlight
Formatted: Font: (Default) Arial, 10 pt, Not
In the event that the Completion Accounts reflect that:- Highlight
(a) SGE has made a profit during the period covered under SGE Completion Accounts,
subject to the circumstances prevailing at the relevant time, all profits accrued (after
deducting all exclusionary items and the relevant tax payable in respect thereof) shall
be declared as dividend and distributed among the vendors in accordance with the
applicable laws and the Articles of Association of SGE; or
(b) SGE has suffered a loss during the period covered under the SGE Completion
Accounts, the vendors of SGE undertake to pay to SGE in proportions to their
shareholding of the sale shares as set out in Schedule 1 of the SGE SPA the amount
equivalent to such loss suffered by SGE in cash on or before the SGE Completion
Date failing which the vendors of SGE shall pay to SGE interest as stipulated in the
SGE SPA in addition to the aforesaid sum equivalent to such loss.
5.4 Information on Vendors of SGE
The vendors of SGE and their shareholdings to be acquired are as follows:-
No. of shares to be Percentage of
Name of vendors acquired equity interest
%
Mr Aw Ho Choon 144,012 24.0
Mr Su Ah Kau 108,009 18.0
Mr Yu Hain Teck 108,009 18.0
Total 360,030 60.0
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9TH DRAFT FOR DISCUSSION TAP/Annt/Draft dated 8 June 2004
5.5 Original Dates and Costs of Investment
The details of the original dates and costs of investments of the vendors of SGE are as
follows:
Date of No. of shares
investment by acquired/ Cost of
Name of vendors vendor (disposed) investment
RM
Mr Aw Ho Choon 18 July 1986 1 1
3 February 1987 1 1
3 May 1988 28,000 28,000
3 November 1988 84,026 84,026
10 June 1992 (32,008) (32,008)
25 March 1997 160,000 160,000
Mr Su Ah Kau 3 February 1987 1 1
3 May 1988 22,000 22,000
3 November 1988 66,021 66,021
10 June 1992 (28,007) (28,007)
25 March 1997 120,000 120,000
Mr Yu Hain Teck 10 June 1992 60,015 60,015
25 March 1997 120,000 120,000
Total 600,050 600,050
5.6 Salient Features of the SGE SPA
5.6.1 The Proposed SGE Acquisition is conditional upon the fulfilment of the following within nine
months from the date of the SGE SPA or such extended period as may be mutually agreed
upon by the parties to the SGE SPA:-
(a) TAP obtaining the approval of the SC for the Proposed SGE Acquisition and the issue
of the 10,800,000 new TAP Shares;
(b) TAP obtaining the approval of the FIC for the Proposed SGE Acquisition (if
applicable);
(c) TAP obtaining the approval of its shareholders in a general meeting for the Proposed
SGE Acquisition and the issue of the 10,800,000 new TAP Shares;
(d) TAP obtaining the approval-in-principal of Bursa Malaysia for the listing and quotation
of the 10,800,000 new TAP Shares;
(e) TAP obtaining the approval of AmTrustee for the Proposed SGE Acquisition pursuant
to and in accordance with the Trust Deeds;
(f) TAP obtaining the approval of Hong Leong Bank Berhad for the issue of the new TAP
Shares pursuant to and in accordance with the trust deed in relation to RCSLS-C;
(g) The completion of an acquisition due diligence review on SGE conducted and TAP
being satisfied with the results of the review;
(h) Mr Aw Ho Choon, Mr Su Ah Kau and Mr Yu Hain Teck procuring and obtaining the
written consents of all existing lenders of SGE whose approvals are required for the
sale and purchase of the SGE Shares subject to terms and conditions acceptable to
the parties to the SGE SPA; and
15
9TH DRAFT FOR DISCUSSION TAP/Annt/Draft dated 8 June 2004
(i) the parties to the SGE SPA obtaining all the other approvals from the relevant
authority which are necessary for the completion of the SGE SPA.
5.6.2 Liabilities and Encumbrances
The SGE Shares shall be transferred to TAP free from all claims, charges, liens,
encumbrances and equities whatsoever together with all rights attached thereto and all
dividend, rights and distribution declared paid or made in respect thereof (on or before the
expiry of three (3) months from the date on which the last of the conditions precedent set out
in the SGE SPA are fulfilled pursuant to and in accordance with the provisions of the SGE
SPA) at the purchase price payable to Mr Aw Ho Choon, Mr Su Ah Kau and Mr Yu Hain Teck,
upon the terms and subject to the conditions of the SGE SPA.
Based on the unaudited accounts as at 30 September 2003, SGE has total liabilities of
approximately RM6,493,290 which comprise bank borrowings, creditors and accruals,
provision for taxation and amount owing to directors. The liabilities will remain in SGE and will
be repaid in the ordinary course of business. Apart from the above, TAP will not assume any
other liabilities arising from the Proposed SGE Acquisition.
6.0 PROPOSED KALANSA ACQUISITION
6.1 Details of the Proposed Kalansa Acquisition
TAP had, on 8 June 2004, entered into a conditional sale and purchase agreement (“Kalansa
SPA”) with Mr Thang Chee Keong, Puan Noraini Binti Mohd Nor, Mr Lee Kok Keong, Mr Yong
Loong Chen, Mr Lum Ah Kee @ Lam Cham Kee and Encik S. Sulaiman bin Ismail to acquire
the entire equity interest in Kalansa comprising 1,000,000 Kalansa Shares for a total
purchase consideration of RM9,000,000 to be satisfied by the issuance of 9,000,000 new
TAP Shares at par.
6.2 Information on Kalansa
Kalansa was incorporated in Malaysia as Kalansa Corporation Sdn Bhd on 10 April 1999
under the Act as a private limited company. It changed its name to Kalansa Energy
Corporation Sdn Bhd on 6 June 2002. Its present authorised share capital is RM1,000,000
comprising 1,000,000 Kalansa Shares of which 1,000,000 Kalansa Shares are issued and
fully paid-up.
Kalansa’s principal business is the construction, operation and maintenance of power plant.
Kalansa proposes to construct, own and operate a renewable energy power plant located at
Lot NT. 08301544, Km 3, Jalan Beluran, Sabah with a nominal capacity of 6.5 Megawatts
(“MW”) (“Kalansa Power Plant”).
On 7 August 2003, Kalansa and Sabah Electricty Sdn Bhd (“SESB”) entered into a Small
Renewable Energy Purchase Agreement (“SREPA”), whereby Kalansa agrees to sell and
deliver electricity and SESB agrees to purchase and accept, on and after the commercial
operations date of the Kalansa Power Plant, and for a term of twenty-one (21) years
thereafter the net electric energy output of the Kalansa Power Plant (up to 5 MW) subject to
the terms and conditions of SREPA.
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9TH DRAFT FOR DISCUSSION TAP/Annt/Draft dated 8 June 2004
As at to-date, the substantial shareholders of Kalansa are as follows:-
< ---- Direct ---- >
Name No. of shares %
Mr Lum Ah Kee @ Lam Cham Kee 300,000 30.0
Mr Thang Chee Keong 150,000 15.0
Puan Noraini Binti Mohd Nor 150,000 15.0
Mr Lee Kok Keong 150,000 15.0
Mr Yong Loong Chen 100,000 10.0
Encik S. Sulaiman bin Ismail 150,000 15.0
As at to-date, the Directors of Kalansa are as follows:-
< ---- Direct ---- > Citizenship
Name of Director No. of %
shares
Mr Thang Chee Keong 150,000 15.0 Malaysian
Puan Noraini Binti Mohd Nor 150,000 15.0 Malaysian
Kalansa does not have any subsidiary or associated companies.
Set out below is a summary of key audited financial information on Kalansa:-
< ---Financial Period/Year Ended 30 June------ >
< --------------------------- Audited ----------------------->
# ## ##
2000 2001 2002 2003
Turnover (RM) - - - -
Loss before tax (RM) (1,570) (465) (50,356) (70,645)
Loss after tax (RM) (1,570) (465) (50,356) (70,645)
Paid-up share capital (RM) 2 2 100 100,000
Shareholders’ deficit (RM) (1,568) (2,033) (52,291) (23,036)
Net tangible liabilities (“NTL”) (RM) (1,568) (2,033) (52,291) (23,036)
NTL per share (RM) (784.00) (1,016.50) (522.91) (0.23)
Total borrowings (RM) - - - -
Net loss per share (RM) (785) (232.50) (503.56) (0.71)
Notes:
# These results are for the financial period from 10 April 1999 to 30 June 2000.
## Kalansa had incurred expenses in relation to administrative expenses resulting in the
losses for the financial year ended 30 June 2002 and 2003 even though the
Company had not begun operations.
6.3 Basis for Arriving at the Purchase Consideration
The purchase consideration of RM9,000,000 for the Proposed Kalansa Acquisition was
arrived at on a “willing-buyer willing-seller” basis after taking into consideration the future
earnings potential of Kalansa.
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9TH DRAFT FOR DISCUSSION TAP/Annt/Draft dated 8 June 2004
6.4 Information on the Vendors of Kalansa
The vendors of Kalansa and their shareholdings to be acquired are as follows:-
No. of shares to be Percentage of
Name of vendors acquired equity interest
%
Mr Lum Ah Kee @ Lam Cham Kee 300,000 30.0
Mr Thang Chee Keong 150,000 15.0
Puan Noraini Binti Mohd Nor 150,000 15.0
Mr Lee Kok Keong 150,000 15.0
Mr Yong Loong Chen 100,000 10.0
Encik S. Sulaiman bin Ismail 150,000 15.0
Total 1,000,000 100.0
6.5 Original Dates and Cost of Investments
The details of the original dates and costs of investments of the vendors of Kalansa are as
follows:
Date of No. of shares
investment by to be Cost of
Name of vendors vendor acquired investment
RM
Mr Thang Chee Keong 29 March 2004 60 60
12 April 2004 99,900 99,900
13 April 2004 50,040 50,040
Puan Noraini Binti Mohd Nor 29 March 2004 40 40
13 April 2004 149,960 149,960
Mr Lee Kok Keong 13 April 2004 150,000 150,000
Mr Yong Loong Chen 13 April 2004 100,000 100,000
Mr Lum Ah Kee @ Lam Cham Kee 13 April 2004 300,000 300,000
Encik S. Sulaiman bin Ismail 13 April 2004 150,000 150,000
Total 1,000,000 1,000,000
6.6 Salient Features of the Kalansa SPA
6.6.1 The Proposed Kalansa Acquisition is conditional upon the fulfilment of the following within
nine months from the date of the Kalansa SPA or such extended period as may be mutually
agreed upon by the parties to the Kalansa SPA:-
(a) TAP obtaining the approval of the SC for the Proposed Kalansa Acquisition and the
issue of the 9,000,000 new TAP Shares;
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9TH DRAFT FOR DISCUSSION TAP/Annt/Draft dated 8 June 2004
(b) TAP obtaining the approval of the FIC for the Proposed Kalansa Acquisition (if
applicable);
(c) TAP obtaining the approval of its shareholders in a general meeting for the Proposed
Kalansa Acquisition and the issue of the 9,000,000 new TAP Shares;
(d) TAP obtaining the approval-in-principal of Bursa Malaysia for the listing and quotation
of the 9,000,000 new TAP Shares;
(e) TAP obtaining the approval of AmTrustee for the Proposed Kalansa Acquisition
pursuant to and in accordance with the Trust Deeds;
(f) TAP obtaining the approval of Hong Leong Bank Berhad for the issue of the new TAP
Shares pursuant to and in accordance with the trust deed in relation to RCSLS-C;
(g) The completion of an acquisition due diligence review on Kalansa conducted and
TAP being satisfied with the results of the review;
(h) Mr Thang Chee Keong, Puan Noraini Binti Mohd Nor, Mr Lee Kok Keong, Mr Yong
Loong Chen, Mr Lum Ah Kee @ Lam Cham Kee and Encik S. Sulaiman bin Ismail,
procuring and obtaining the written consents of all relevant authorities including but
not limited to SESB for the disposal of the Kalansa Shares in favour of TAP or its
nominee (if applicable);
(i) Mr Thang Chee Keong, Puan Noraini Binti Mohd Nor, Mr Lee Kok Keong, Mr Yong
Loong Chen, Mr Lum Ah Kee @ Lam Cham Kee and Encik S. Sulaiman bin Ismail,
procuring Kalansa to fulfill and comply with all the conditions precedent to the
effectiveness of the SREPA;
(j) Mr Thang Chee Keong, Puan Noraini Binti Mohd Nor, Mr Lee Kok Keong, Mr Yong
Loong Chen, Mr Lum Ah Kee @ Lam Cham Kee and Encik S. Sulaiman bin Ismail,
procuring and obtaining the written consents of all existing lenders of Kalansa whose
approvals are required for the sale and purchase of the Kalansa Shares subject to
terms and conditions acceptable to the parties of the Kalansa SPA;
(k) the parties to the Kalansa SPA obtaining all the other approvals from the relevant
authority which are necessary for the completion of the Kalansa SPA.
6.6.2 Liabilities and Encumbrances
The Kalansa Shares shall be transferred to TAP free from all claims, charges, liens,
encumbrances and equities whatsoever together with all rights attached thereto and all
dividend, rights and distribution declared paid or made in respect thereof (on or before the
expiry of three (3) months from the date on which the last of the conditions precedent set out
in the Kalansa SPA are fulfilled pursuant to and in accordance with the provisions of the
Kalansa SPA) at the purchase price payable to Mr Thang Chee Keong, Puan Noraini Binti
Mohd Nor, Mr Lee Kok Keong, Mr Yong Loong Chen, Mr Lum Ah Kee @ Lam Cham Kee and
Encik S. Sulaiman bin Ismail, upon the terms and subject to the conditions of the Kalansa
SPA.
Based on the audited accounts as at 30 June 2003, Kalansa has total liabilities of
approximately RM54,150 which comprise payables, accruals and amount owing to directors.
The liabilities will remain in Kalansa and will be repaid in the ordinary course of business.
Apart from the above, TAP will not assume any other liabilities arising from the Proposed
Kalansa Acquisition.
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7.0 PROPOSED SUNQUEST ACQUISITION
7.1 Details of the Proposed Sunquest Acquisition
TAP had, on 8 June 2004, entered into a conditional sale and purchase agreement
(“Sunquest SPA”) with Mr Thang Chee Keong, Puan Noraini Binti Mohd Nor, Mr Lee Kok
Keong, Mr Yong Loong Chen, Mr Lum Ah Kee @ Lam Cham Kee and Dato’ Shamsir bin
Omar to acquire the entire equity interest in Sunquest comprising 1,000,000 Sunquest Shares
for a total purchase consideration of RM11,000,000 to be satisfied by the issuance of
11,000,000 new TAP Shares at par.
7.2 Information on Sunquest
Sunquest was incorporated in Malaysia on 3 November 1992 under the Act as a private
limited company. Its present authorised share capital is RM10,000,000 comprising
10,000,000 Sunquest Shares of which 1,000,000 Sunquest Shares are issued and fully paid-
up.
Sunquest’s principal business is the construction, operation and maintenance of power plant.
Sunquest proposes to construct, own, operate and maintain a renewable energy power plant
located at Lot 227, Mukim Jimah, Daerah Port Dickson, Port Dickson, Negeri Sembilan Darul
Khusus, with a nominal capacity of 6.2 MW (“Sunquest Power Plant”).
On 3 June 2004, Sunquest and Tenaga Nasional Bhd (“TNB”) entered into a Renewable
Energy Power Purchase Agreement (“REPPA”), whereby Sunquest agrees to sell and deliver
electrical energy and TNB agrees to purchase and accept, on and after the commercial
operations date of the Sunquest Power Plant, and for a term of twenty-one (21) years
thereafter the net electric energy output of the Sunquest Power Plant (up to 5 MW) subject to
the terms and conditions of REPPA.
As at to-date, the substantial shareholders of Sunquest are as follows:-
< ---- Direct ---- >
Name No. of shares %
Mr Thang Chee Keong 150,000 15.0
Puan Noraini Binti Mohd Nor 150,000 15.0
Mr Lee Kok Keong 150,000 15.0
Mr Yong Loong Chen 100,000 10.0
Mr Lum Ah Kee @ Lam Cham Kee 300,000 30.0
Dato’ Shamsir bin Omar 150,000 15.0
As at to-date, the Directors of Sunquest are as follows:-
< ---- Direct ---- > Citizenship
Name of Director No. of shares %
Dato’ Shamsir Bin Omar 150,000 15.0 Malaysian
Puan Noraini Binti Mohd Nor 150,000 15.0 Malaysian
Sunquest does not have any subsidiary or associated companies.
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9TH DRAFT FOR DISCUSSION TAP/Annt/Draft dated 8 June 2004
Set out below is a summary of key audited/ unaudited financial information on Sunquest:-
< ------Financial Year Ended 31 December -------- >
<----------------- Audited --------------> Unaudited
1999 2000 2001 2002 2003
Turnover (RM’000) - - - - -
Loss before tax (RM’000) (2) (3) (1) (10) (34)
Loss after tax (RM’000) (2) (3) (1) (10) (34)
Paid-up share capital (RM’000) 0.002 250 250 250 500
Shareholders’ funds/ (RM’000) (28) 218 217 207 422
(deficit)
NTA/ (NTL) (RM’000) (28) 218 217 98 422
NTA/ (NTL) per share (RM) (14,224) 0.87 0.87 0.39 0.84
Total borrowings (RM’000) - - - - -
Net earnings/(loss) (RM) (1,002.50) (0.009) (0.004) (0.04) (0.07)
per share
7.3 Basis for Arriving at the Purchase Consideration
The purchase consideration of RM11,000,000 for the Proposed Sunquest Acquisition was
arrived at on a “willing-buyer willing-seller” basis after taking into consideration the future
earnings potential of Sunquest.
7.4 Information on the Vendors of Sunquest
The vendors of Sunquest and their shareholdings to be acquired are as follows:-
No. of shares to be Percentage of
Name of vendors acquired equity interest
%
Mr Thang Chee Keong 150,000 15.0
Puan Noraini Binti Mohd Nor 150,000 15.0
Mr Lee Kok Keong 150,000 15.0
Mr Yong Loong Chen 100,000 10.0
Mr Lum Ah Kee @ Lam Cham Kee 300,000 30.0
Dato’ Shamsir bin Omar 150,000 15.0
Total 1,000,000 100.0
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9TH DRAFT FOR DISCUSSION TAP/Annt/Draft dated 8 June 2004
7.5 Original Dates and Cost of Investments
The details of the original dates and costs of investments of the vendors of Sunquest are as
follows:
Date of No. of shares
investment by acquired / Cost of
Name of vendors vendor (disposed) investment
RM
Mr Thang Chee Keong 31 March 2004 150,000 150,000
Puan Noraini Binti Mohd 31 March 2004 125,000 125,000
Nor
9 April 2004 25,000 25,000
Mr Lee Kok Keong 9 April 2004 150,000 150,000
Mr Yong Loong Chen 31 March 2004 100,000 100,000
Mr Lum Ah Kee @ Lam 9 April 2004 300,000 300,000
Cham Kee
Dato’ Shamsir bin Omar 14 June 2002 37,500 37,500
21 June 2002 62,500 62,500
22 April 2003 (75,000) (75,000)
31 March 2004 125,000 125,000
Total 1,000,000 1,000,000
7.6 Salient Features of the Sunquest SPA
7.6.1 The Proposed Sunquest Acquisition is conditional upon the fulfilment of the following within
nine months from the date of the Sunquest SPA or such extended period as may be mutually
agreed upon by the parties to the Sunquest SPA:-
(a) TAP obtaining the approval of the SC for the Proposed Sunquest Acquisition and the
issue of the 11,000,000 new TAP Shares;
(b) TAP obtaining the approval of the FIC for the Proposed Sunquest Acquisition (if
applicable);
(c) TAP obtaining the approval of its shareholders in a general meeting for the Proposed
Sunquest Acquisition and the issue of the 11,000,000 new TAP Shares;
(d) TAP obtaining the approval-in-principal of Bursa Malaysia for the listing and quotation
of the 11,000,000 new TAP Shares;
(e) TAP obtaining the approval of AmTrustee for the Proposed Sunquest Acquisition
pursuant to and in accordance with the Trust Deeds;
(f) TAP obtaining the approval of Hong Leong Bank Berhad for the issue of the new TAP
Shares pursuant to and in accordance with the trust deed in relation to RCSLS-C;
(g) The completion of an acquisition due diligence review on Sunquest conducted and
TAP being satisfied with the results of the review;
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9TH DRAFT FOR DISCUSSION TAP/Annt/Draft dated 8 June 2004
(h) Mr Thang Chee Keong, Puan Noraini Binti Mohd Nor, Mr Lee Kok Keong, Mr Yong
Loong Chen, Mr Lum Ah Kee @ Lam Cham Kee and Dato’ Shamsir bin Omar
procuring and obtaining the written consents of all relevant authorities including but
not limited to TNB for the disposal of the Sunquest Shares in favour of TAP or its
nominee (if applicable);
(i) Mr Thang Chee Keong, Puan Noraini Binti Mohd Nor, Mr Lee Kok Keong, Mr Yong
Loong Chen, Mr Lum Ah Kee @ Lam Cham Kee and Dato’ Shamsir bin Omar
procuring Sunquest to fulfil and comply with all the conditions precedent to the
effectiveness of the REPPA;
(j) Mr Thang Chee Keong, Puan Noraini Binti Mohd Nor, Mr Lee Kok Keong, Mr Yong
Loong Chen, Mr Lum Ah Kee @ Lam Cham Kee and Dato’ Shamsir bin Omar
procuring and obtaining the written consents of all existing lenders of Sunquest
whose approvals are required for the sale and purchase of the Sunquest Shares
subject to terms and conditions acceptable to the parties of the Sunquest SPA;
(k) the parties to the Sunquest SPA obtaining all the other approvals from the relevant
authority which are necessary for the completion of the Sunquest SPA.
7.6.2 Liabilities and Encumbrances
The Sunquest Shares shall be transferred to TAP free from all claims, charges, liens,
encumbrances and equities whatsoever together with all rights attached thereto and all
dividend, rights and distribution declared paid or made in respect thereof (on or before the
expiry of three (3) months from the date on which the last of the conditions precedent set out
in the Sunquest SPA are fulfilled pursuant to and in accordance with the provisions of the
Sunquest SPA) at the purchase price payable to Mr Thang Chee Keong, Puan Noraini Binti
Mohd Nor, Mr Lee Kok Keong, Mr Yong Loong Chen, Mr Lum Ah Kee @ Lam Cham Kee and
Dato’ Shamsir bin Omar, upon the terms and subject to the conditions of the Sunquest SPA.
Based on the unaudited accounts as at 31 December 2003, Sunquest has total liabilities of
approximately RM33,305 which comprise creditors and accruals. The liabilities will remain in
Sunquest and will be repaid in the ordinary course of business. Apart from the above, TAP
will not assume any other liabilities arising from the Proposed Sunquest Acquisition.
8.0 PROPOSED ELASTIC QUANTUM ACQUISITION
8.1 Details of the Proposed Elastic Quantum Acquisition
TAP had, on 8 June 2004, entered into a conditional sale and purchase agreement (“Elastic
Quantum SPA”) with Mr Gan Seong Kah to acquire in aggregate 765,001 Elastic Quantum
Shares representing 51% equity interest in Elastic Quantum for a total purchase consideration
of RM7,500,000 to be satisfied by the issuance of 7,500,000 new TAP Shares at par.
8.2 Information on Elastic Quantum
Elastic Quantum was incorporated in Malaysia on 4 July 2000 under the Act as a private
limited company. Its present authorised share capital is RM5,000,000 comprising 5,000,000
Elastic Quantum Shares of which 1,500,002 Elastic Quantum Shares are issued and fully
paid-up.
Elastic Quantum is principally engaged in the business of erecting, constructing, maintaining,
making, operating, owning, altering, repairing, pulling down and restoring either alone or
jointly with any other companies or persons, works of all descriptions including wharves,
docks, piers, railways, tramways, roads, bridges, warehouses, factories, mills, engines,
machines, railway carriages and wagons, gas works, electric works, water works, drainage
and sewerage works and buildings of every description.
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9TH DRAFT FOR DISCUSSION TAP/Annt/Draft dated 8 June 2004
As at to-date, the substantial shareholders of Elastic Quantum are as follows:-
< ---- Direct ---- >
Name No. of shares %
Mr Gan Seong Kah 1,500,001 99.99
As at to-date, the Directors of Elastic Quantum are as follows:-
< ---- Direct ---- > Citizenship
Name of Director No. of shares %
^
Mr Chye Kok Hoe 1 Malaysian
Mr Gan Seong Kah 1,500,001 99.99 Malaysian
Note:
^ Negligible
Elastic Quantum does not have any subsidiary or associated companies.
Set out below is a summary of key unaudited financial information on Elastic Quantum:-
< --------------- Unaudited --------------->
# For the
12-month For the
period 11-month For the For the
ended 30 period year year
June ended 31 ended 31 ended 31
2001 May 2002 May 2003 May 2004
Turnover (RM’000) 286 349 332 1,992
Profit/(loss) before tax (RM’000) 4 22 77 390
Profit/(loss) after tax (RM’000) 3 17 62 281
Paid-up share capital (RM’000) 0.002 0.002 0.002 1,500
Shareholders’ funds (RM’000) 3 20 82 1,863
NTA (RM’000) 3 20 82 1,863
NTA per share (RM) 1,585 10,245 41,033 1.24
Total borrowings (RM’000) - - 118 104
Net earnings/(loss) per (RM) 1,584 8,660 30,787 0.19
share
# These results are for the financial period from 4 July 2000 to 30 June 2001.
8.3 Basis for Arriving at the Purchase Consideration
The purchase consideration for the Proposed Elastic Quantum Acquisition of RM7,500,000
was arrived at on a “willing-buyer willing-seller” basis after taking into consideration the future
earnings potential of Elastic Quantum.
8.4 Information on the Vendor of Elastic Quantum
The vendor of Elastic Quantum and the shareholdings to be acquired are as follows:-
No. of shares to be Percentage of
Name of vendors acquired equity interest
%
Mr Gan Seong Kah 765,001 51.0
Total 765,001 51.0
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9TH DRAFT FOR DISCUSSION TAP/Annt/Draft dated 8 June 2004
8.5 Original Dates and Cost of Investments
The details of the original dates and costs of investments of the vendors of Elastic Quantum
are as follows:
Date of
investment by No. of shares Cost of
Name of vendors vendor acquired investment
RM
Mr Gan Seong Kah 13 March 2003 1 1
2 April 2003 1,500,000 1,500,000
Total 1,500,001 1,500,001
8.6 Salient Features of the Elastic Quantum SPA
8.6.1 The Proposed Elastic Quantum Acquisition is conditional upon the fulfilment of the following
within nine months from the date of the Elastic Quantum SPA or such extended period as
may be mutually agreed upon by the parties to the Elastic Quantum SPA:-
(a) TAP obtaining the approval of the SC for the Proposed Elastic Quantum Acquisition
and the issue of the 7,500,000 new TAP Shares;
(b) TAP obtaining the approval of the FIC for the Proposed Elastic Quantum Acquisition
(if applicable);
(c) TAP obtaining the approval of its shareholders in a general meeting for the Proposed
Elastic Quantum Acquisition and the issue of the 7,500,000 new TAP Shares;
(d) TAP obtaining the approval-in-principal of Bursa Malaysia for the listing and quotation
of the 7,500,000 new TAP Shares;
(e) TAP obtaining the approval of AmTrustee for the Proposed Elastic Acquisition
pursuant to and in accordance with the Trust Deeds;
(f) TAP obtaining the approval of Hong Leong Bank Berhad for the issue of the new TAP
Shares pursuant to and in accordance with the trust deed in relation to RCSLS-C;
(g) The completion of an acquisition due diligence review on Elastic Quantum conducted
and TAP being satisfied with the results of the review;
(h) Mr Gan Seong Kah procuring and obtaining the written consents of all existing
lenders of Elastic Quantum whose approvals are required for the sale and purchase
of the Elastic Quantum Shares subject to terms and conditions acceptable to the
parties to the Elastic Quantum SPA; and
(i) the parties to the Elastic Quantum SPA obtaining all the other approvals from the
relevant authority which are necessary for the completion of the Elastic Quantum
SPA.
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9TH DRAFT FOR DISCUSSION TAP/Annt/Draft dated 8 June 2004
8.6.2 Liabilities and Encumbrances
The Elastic Quantum Shares shall be transferred to TAP free from all claims, charges, liens,
encumbrances and equities whatsoever together with all rights attached thereto and all
dividend, rights and distribution declared paid or made in respect thereof (on or before the
expiry of three (3) months from the date on which the last of the conditions precedent set out
in the Elastic Quantum SPA are fulfilled pursuant to and in accordance with the provisions of
the Elastic Quantum SPA) at the purchase price payable to Mr Gan Seong Kah, upon the
terms and subject to the conditions of the Elastic Quantum SPA.
Based on the unaudited accounts for the year ended 31 May 2004, Elastic Quantum has total
liabilities of approximately RM372,630 which comprise bank borrowings, creditors and
accruals. The liabilities will remain in Elastic Quantum and will be repaid in the ordinary
course of business. Apart from the above, TAP will not assume any other liabilities arising
from the Proposed Elastic Quantum Acquisition.
9.0 BASIS OF ARRIVING AT THE ISSUE PRICE FOR THE NEW TAP SHARES TO BE
ISSUED PURSUANT TO THE PROPOSED ACQUISITIONS
The issue price for the new TAP Shares to be issued pursuant to the Proposed Acquisitions
has been fixed at RM1.00 per new TAP Share which is the par value of TAP Shares. The
issue price of RM1.00 per new TAP Share represents a premium of approximately 59% over
the weighted average market price of TAP Shares of RM0.63 for the five market days from 1
June 2004 up to 7 June 2004 being the market day immediately preceding the date of this
announcement.
10.0 PROPOSED RIGHTS ISSUE
10.1 Details of the Proposed Rights Issue
The Proposed Rights Issue entails the proposed renounceable two-call rights issue of up to
70,445,093 Rights Shares together with up to 35,222,547 Warrants on the basis of two (2)
Rights Shares together with one (1) free Warrant for every four (4) existing TAP Shares held,
at an issue price of RM1.00 per Rights Share, payable in two (2) calls, as follows:-
(i) the first call of RM0.70 will be payable in cash upon application; and
(ii) the second call of the remaining RM0.30 will be payable out of the Company’s share
premium account.
The second call of RM0.30 will be capitalised from the share premium account of the
Company as follows:-
(A)
Less : Amount to be
Share premium Unaudited as at capitalised for the Balance after (A)
account 30 April 2004 Proposed Rights
Issue
RM’000 RM’000 RM’000
Minimum Scenario 23,039 14,571 8,468
Maximum Scenario 23,039 21,133 1,906
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9TH DRAFT FOR DISCUSSION TAP/Annt/Draft dated 8 June 2004
Notes:
Maximum Assuming all of the following securities issued pursuant to the debt
Scenario: restructuring scheme are converted into new TAP Shares:
(i) all the outstanding RM8,448,860 nominal value of 2% 3-year ICULS as
at 30 April 2004 (“Outstanding ICULS”).
(ii) the outstanding 5% 3-year RCSLS as at 30 April 2004, of the following:-
RM17,503,000 nominal value of RCSLS-A;
RM9,866,000 nominal value of RCSLS-B; and
RM7,932,856 nominal value of RSCLS-C
(“Outstanding RCSLS”).
Minimum Assuming none of the Outstanding ICULS and Outstanding RCSLS are
Scenario: converted into new TAP Shares.
10.2 Irrevocable undertakings from shareholders and underwriting arrangements
TAP does not have any substantial shareholders but will be seeking irrevocable written
undertakings from certain shareholders to subscribe for the Proposed Rights Issue.
Underwriting arrangements will be made for the portion of the Rights Shares which are not
covered by the said irrevocable written undertakings after approval of the Proposed Rights
Issue by the relevant authorities.
10.3 Basis For Determining the Issue Price of the Rights Shares and the Exercise Price of
the Warrants
(i) The Issue Price of the Rights Shares
The issue price of RM1.00 per Rights Share and the first cash call of RM0.70 per
Rights Share were arrived at after taking into consideration the following:-
(a) par value of TAP Shares of RM1.00;
(b) the weighted average market price of TAP Shares of RM0.63 for the five market
days from 1 June 2004 up to 7 June 2004 being the market day immediately
preceding the date of this announcement; and
(c) funding requirements of TAP.
(ii) The Exercise Price of the Warrants
The exercise price of the Warrants has been fixed at RM1.00 per new TAP Share
based on the par value of TAP Shares of RM1.00, representing a premium of
approximately 59% over the weighted average market price of TAP Shares of
RM0.63 for the five market days from 1 June 2004 up to 7 June 2004 being the
market day immediately preceding the date of this announcement.
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9TH DRAFT FOR DISCUSSION TAP/Annt/Draft dated 8 June 2004
10.4 Purpose and Utilisation of Proceeds from the Proposed Rights Issue and Warrants
The purpose of the Proposed Rights Issue is to raise funds for working capital and the
defrayment of the estimated expenses in relation to the Proposals.
The gross proceeds to be raised from the Proposed Rights Issue and intended utilisation of
the said proceeds are as follows, based on the Maximum Scenario and Minimum Scenario:-
Minimum Maximum
Scenario Scenario
RM’000 RM’000
Total gross proceeds to be raised from the Proposed
Rights Issue 33,999 49,311
Utilisation of proceeds for:-
(a) Working capital 30,999 46,311
(b) Estimated expenses in relation to the Proposals 3,000 3,000
Total utilisation 33,999 49,311
The utilisation of proceeds for working capital for TAP and its subsidiary and associated
companies (“TAP Group”) will be adjusted in the event there is a variation to the actual
expenses for Proposals.
Any proceeds from the exercise of the Warrants will be utilised for additional working capital
of the TAP Group.
10.5 Proposed Salient Terms of the Warrants
The proposed salient terms of the Warrants are set out below:
Issue size : Up to a maximum of 35,222,547 new Warrants will be issued
pursuant to the Proposed Rights Issue.
Issue price : The Warrants are to be issued free.
Form : The Warrants will be issued in registered form and will be
immediately detached from the Rights Shares and separately
traded upon issue.
Subscription : Each Warrant carries the entitlement, at any time during the
Rights Exercise Period, to subscribe for one (1) new share in the
Company at the Exercise Price.
Exercise Period : Eight (8) years commencing on and including the date of issue of
the Warrants and ending on a date being eight (8) years from the
date of issue of the Warrants.
Exercise Price : The exercise price of the Warrants is fixed at RM1.00 per new
TAP share.
The exercise price is subject to adjustments in accordance with
the provisions of the Deed Poll..
Expiry : At the close of business on the maturity date of the Warrants,
being a date which is eight (8) years from the date of issue of the
Warrants, any Warrant which has not been exercised will lapse
and cease thereafter to be valid for any purpose.
Deed Poll : The Warrants will be constituted by a Deed Poll to be executed by
TAP.
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9TH DRAFT FOR DISCUSSION TAP/Annt/Draft dated 8 June 2004
Listing : Application will be made to the Bursa Malaysia for the listing of
and quotation for the Warrants and the new TAP Shares to be
issued pursuant to the exercise of the Warrants.
Board Lot : For purpose of trading on Bursa Malaysia, one (1) board lot shall
comprise 100 Warrants, unless otherwise revised by the relevant
authorities.
Ranking of new : The new TAP Shares to be issued pursuant to the exercise of the
TAP Shares Warrants shall, upon allotment and issue, rank pari passu in all
respects with the existing TAP Shares, except that they shall not
be entitled to any dividends, rights, allotments and/or other
distributions, that may be declared, made or paid before the date
of allotment of the new TAP Shares.
Adjustments to : The Exercise Price and/or number of Warrants outstanding shall
exercise price be adjusted in certain circumstances. in accordance with the
and number of provisions of the Deed Poll.
Warrants
outstanding
11.0 PROPOSED INCREASE IN AUTHORISED SHARE CAPITAL
The present authorised share capital of the Company is RM200,000,000 comprising
200,000,000 TAP Shares. As at 30 April 2004, 97,139,470 TAP Shares have been issued and
fully paid-up.
The Board of Directors of TAP proposes to increase the authorised share capital of the
Company to RM1,000,000,000 comprising 1,000,000,000 TAP Shares by the creation of
800,000,000 new TAP Shares.
Accordingly, the authorised share capital as stated in the Company's Memorandum and
Articles of Association will be amended pursuant to the Proposed Increase in Authorised
Share Capital.
12.0 RANKING OF THE NEW TAP SHARES TO BE ISSUED PURSUANT TO THE
PROPOSALS
The new TAP Shares to be issued pursuant to the Proposed Acquisitions will, upon allotment
and issue, rank pari passu in all respects with the existing TAP Shares, except that they shall
not be entitled to the Proposed Rights Issue or to any dividends, rights, allotments and/or
other distributions, that may be declared, made or paid before the date of the allotment of the
new TAP Shares pursuant to the Proposed Acquisitions.
The new TAP Shares to be issued pursuant to the Proposed Rights Issue will, upon allotment
and issue, rank pari passu in all respects with the existing TAP Shares, except that they shall
not be entitled to any dividends, rights, allotments and/or other distributions, that may be
declared, made or paid before the date of allotment of the Rights Shares.
13.0 RATIONALE FOR THE PROPOSALS
13.1 The Proposed Acquisitions
The TAP Group is principally involved in general contracting and construction of building
works, installation of air-conditioners, process control and switch-gear automation and
property development. The Proposed Acquisitions are part of the Company’s plans to
strengthen its construction capability to undertake specialised civil and engineering works, to
broaden its market base geographically and to mitigate cyclical risks that affect the
construction industry as the Proposed Acquisitions are expected to result in the following:
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9TH DRAFT FOR DISCUSSION TAP/Annt/Draft dated 8 June 2004
(a) Proposed Times Enterprise Acquisition and Proposed Sulta Nate Acquisition
The Proposed Times Enterprise Acquisition and Proposed Sulta Nate Acquisition will
provide the TAP Group with the opportunity to expand into the Thailand market and at
the same time tap on the expertise of Times Enterprise in the area of general
contracting, interior decorating, mechanical and electrical contracting thus giving the
TAP Group a competitive advantage over its competitors. With the Proposed Times
Enterprise Acquisition and Proposed Sulta Nate Acquisition, TAP will be in a position
to take advantage of any future growth of the construction industry in Thailand.
(b) Proposed Transturbo Acquisition, Proposed SGE Acquisition and Proposed Elastic
Quantum Acquisition
The Proposed Transturbo Acquisition, Proposed SGE Acquisition and Proposed
Elastic Quantum Acquisition will enable the Company to invest in businesses that are
synergistic to its existing operations as Transturbo, SGE and Elastic Quantum are
principally involved in civil and mechanical works, specialised geotechnical and
structural works, and the supply of building materials.
(c) Proposed Kalansa Acquisition and Proposed Sunquest Acquisition
The Proposed Kalansa Acquisition and Proposed Sunquest Acquisition will provide
the Company with the opportunity to diversify its operations into the energy sector.
The Proposed Kalansa Acquisition and Proposed Sunquest Acquisition represents an
investment in a stable cashflow generating business as Kalansa and Sunquest have
entered into a SREPA and a REPPA with SESB and TNB respectively for a period of
twenty-one (21) years and will provide TAP with immediate income stream once the
renewable energy power plants are commissioned.
Furthermore, the generation of electricity by Kalansa Power Plant and Sunquest
Power Plant using bio-mass is part of the clean development management initiative
advocated by the government to promote renewable resources and a clean
environment. As such, the Proposed Kalansa Acquisition and Proposed Sunquest
Acquisition will provide the Company with the opportunity to invest in the power
industry so as to reap benefits from such government initiatives. In addition, the
Proposed Kalansa Acquisition and Proposed Sunquest Acquisition will enable TAP to
diversify its business risks and reduce its dependence on a single sector.
13.2 The Proposed Rights Issue
The Proposed Rights Issue will enable the Group to raise funds for its working capital
requirement.
13.3 The Proposed Increase in Authorised Share Capital
The Proposed Increase in Authorised Share Capital is to accommodate the increase in the
issued and paid-up share capital of the Company arising from the new TAP Shares to be
issued pursuant to the Proposed Acquisitions, Proposed Rights Issue and the exercise of the
Warrants pursuant therefrom.
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9TH DRAFT FOR DISCUSSION TAP/Annt/Draft dated 8 June 2004
14.0 POLICY ON FOREIGN INVESTMENTS AND REPATRIATION OF PROFITS
The major policies on foreign investments and repatriation of profits of Thailand are as
follows:
(a) Importation
Remittance of funds into Thailand for investment and foreign loans are permitted.
However, foreign exchange inflows in the form of capital and loans must be
surrendered to commercial banks or deposited in a foreign currency deposit account.
(b) Exportation
Repatriation of investment funds, dividends and profits as well as loan repayments
and interest payments must be approved by the Central Bank of Thailand. Certain
reporting requirements may have to be met and may require the consideration of the
Central Bank of Thailand who require supporting documents. The repatriation of
investment funds, dividends and profits may take 3 to 5 days for the completion.
(c) Taxation on Repatriation of Dividend
A foreign company or partnership established under a foreign law and not carrying on
a business in Thailand which receives a dividend from Thailand is subject to a
withholding tax at a rate of 10% of such dividend.
According to the Double Tax Treaty between Thailand and Malaysia, if a recipient of
dividend (e.g. a Malaysian Company) received dividend from a Thai company
engaging in the following businesses:
Manufacturing, assembling and processing;
Construction, civil engineering and shipbuilding;
Production of electricity, hydraulic power, gas or the supply of water; or
Agriculture forestry and fishery and carrying on of a plantation,
tThen such recipient is subject to withholding tax at a rate not exceeding 15%. In
other cases, a withholding tax exceeding 20% will apply.
As the withholding tax rate under the Double Tax Treaty (i.e. 15% or 20%) is higher
than the local rate (10%) the local rate will apply.
Thailand’s exchange control policies are not expected to have any substantial effect on TAP’s
investment in Times Enterprise and Sulta Nate as these foreign acquisitions are meant for the
long term investment purposes. No remittance of funds out of Thailand is expected in the near
future (save for dividend payment), however, profits may be repatriated as and when there
are excess funds not used for the working capital or expansion of the business in Thailand.
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9TH DRAFT FOR DISCUSSION TAP/Annt/Draft dated 8 June 2004
15.0 RISK FACTORS OF THE PROPOSED ACQUISITIONS
The Board has considered, amongst others, the following risk factors associated with the
Proposals. The list (which may not be exhaustive) include but not limited to the general and
specific risks which may have a significant impact on the future performance of the TAP
Group.
15.1 Business Risks Relating to Civil/ Geotechnical/ Mechanical/ Construction Companies
(a) Dependence on the Infrastructure and Construction Industry
Times Enterprise, Sulta Nate, Transturbo, SGE and Elastic Quantum are subject to
certain business risks inherent in the civil/ geotechnical/ mechanical and construction
business. This may include the general downturn in the infrastructure and
construction sectors, possible increase in operating and capital costs due to increase
in the cost of raw materials, constraints in labour supply, constraints in machine
capacity, entry of new players, changes in interest rate and credit conditions,
fluctuations in foreign exchange rates, fluctuation in demand for civil, geotechnical,
mechanical products and services, introduction of new or superior technology or
substitute products by competitors, changes in legal and environmental framework
within which the industry operates.
Although TAP seeks to limit these risks through, inter-alia, increasing the product
range, developing and maintaining a large and diversified customer base, having
contractual terms for projects undertaken, having a diversified pool of suppliers,
prudent management policies and improving its technological competence especially
in research and development, no assurance can be given that any changes to the
above factors will not have a material adverse effect on TAP’s business and financial
conditions.
15.2 Business Risks Relating to Independent Power Producers
(a) Non-completion of SREPA and a REPPA
Kalansa and Sunquest have entered into a SREPA and a REPPA with SESB and
TNB respectively. Both SREPA and REPPA shall only be effective upon the fulfilment
of certain conditions precedents as stipulated therein including but not limited to
obtaining the appropriate licence from Energy Commission no later than thirty (30)
days prior to the initial operation date. Further, the rights of Kalansa and Sunquest to
commence generation of electrical energy are also conditional upon the fulfilment of a
separate set of conditions precedent. There is no guarantee that both Kalansa and
Sunquest are able to fulfil all the conditions precedents as stipulated in the SREPA
and REPPA within the stipulated time frame. Any delay or non-completion of the
SREPA and REPPA will preclude TAP from capitalising the revenue generated from
both Kalansa and Sunquest.
(b) Licence
Kalansa and Sunquest intend to apply to the Energy Commission for a licence to
operate the Kalansa Power Plant and Sunquest Power Plant respectively, both for a
duration of twenty-one (21) years, issued under the Electricity Supply Act, 1990
(“Licence”).
There is no assurance that the Licence will be granted to Kalansa and Sunquest and
even if the Licence is granted, there can be no assurance either that the Licence will
not be revoked or suspended prior to their expiration. It is a condition precedent in the
SREPA and REPPA for Kalansa and Sunquest to obtain the Licence. There can also
be no assurance that upon expiry of the Licence, renewal will be granted by the
Energy Commission to either Kalansa or Sunquest.
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9TH DRAFT FOR DISCUSSION TAP/Annt/Draft dated 8 June 2004
Notwithstanding the above, Kalansa and Sunquest intend to comply with the
requirements of the Energy Commission for the issuance of the Licence and upon
issuance of the Licence to comply with the terms and conditions of the Licence.
(c) Government Policies and Guidelines
The Energy Commisison regulates the electricity supply in Malaysia. A set of
framework has been established to regulate the privatised power sector to ensure
that the electricity supply will function effectively and efficiently. The functions and
duties of the Energy Commission are primarily to secure sufficiency of electricity
supply, to promote competition in the power industry so as to increase efficiency and
to provide improved quality of supply services, to protect the interests of consumers
such as reviewing electricity tariff and regulating charges payable by the consumers,
to oversee viability of activities under the licences, to establish a non-discriminatory
environment and to ensure safety of electrical installation and equipment.
Kalansa and Sunquest acknowledges that such policies and guidelines are for the
long term benefit of the power industry and intends to comply with the said policies
and guidelines as and when they are introduced.
(e) Reliance on TNB and SESB
Kalansa and Sunquest have entered into a SREPA and a REPPA with SESB and
TNB respectively. Under the SREPA and proposed REPPA, Kalansa and Sunquest
will have the right to sell and deliver electrical energy whilst SESB and TNB will be
obliged to purchase and accept daily available capacity provided by the Kalansa and
Sunquest, thus making SESB and TNB the sole customers of Kalansa and Sunquest
respectively. Therefore, the risk associated with such an arrangement is that the
expected revenue stream to Kalansa and Sunquest will depend on the SESB’s and
TNB’s support and ability to make timely payments to Kalansa and Sunquest
respectively.
(f) Operational Risk
The operations of the Kalansa Power Station and Sunquest Power Station once
commissioned, will involve certain risks, including but not limited to, the breakdown or
failure of equipment or the performance of equipment at levels below those originally
projected, unexpected wear and tear or unexpected degradation. Any of the foregoing
could significantly reduce or eliminate project revenues and crystallise penalty
payments to SESB or TNB under the SREPA and proposed REPPA respectively, or
increase the cost of operating the power stations, including maintenance and repair
costs, hence reducing the net income and cashflow of Kalansa and Sunquest.
These risks are, however, mitigated to the extent that the SREPA and the proposed
REPPA have/will have a forced outage provision to cater for unforeseen breakdowns.
In addition, Kalansa and Sunquest intend to limit the aforesaid risks by procuring
insurance coverage for interruption of operation and machinery breakdown.
15.3 Risks Associated with Foreign Acquisition
(a) Remittance and Repatriation of Funds
Remittance of funds into Thailand for investment and foreign loans as well as the
repatriation of investment funds, dividends and profits, loan repayments and interest
payments are permitted but are subject to the exchange controls regulated by the
Central Bank of Thailand.
Thailand’s exchange control rules are not expected to have any substantial effect on
TAP’s investment in Times Enterprise and Sulta Nate. However, there can be no
assurance that there will be no changes to Thailand’s exchange control rules in the
future, which may inhibit the free movement of cashflows and affect the investment
climate and considerations of TAP.
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9TH DRAFT FOR DISCUSSION TAP/Annt/Draft dated 8 June 2004
(b) Political, Social and Economic Risk
Times Enterprise and Sulta Nate's business, prospects, financial conditions and level
of profitability could potentially be affected by the development of the economic,
political and regulatory environment in Thailand and worldwide. Any adverse
development in the political, social and economic conditions or changes in the
regulatory environment could materially and adversely affect the future financial
performance of Times Enterprise and Sulta Nate. These risks include inter-alia, risk of
war, civil unrest, epidemic, global economic downturn, changes in interest rates and
unfavourable changes in government policies such as the introduction of new
regulations, import duties and tariffs affecting the infrastructure and construction
industries in which Times Enterprise and Sulta Nate has business dealings.
16.0 PROSPECTS
16.1 Prospect of the Malaysian and Thail Economy
(a) Malaysian Economy
“The Malaysian economy is expected to strengthen further in 2004, building on the
strong growth momentum in the second half of 2003 and brighter prospects for global
growth in 2004. Real GDP is expected to expand by 6-6.5% (2003:5.2%),
underpinned by stronger domestic demand and reinforced by more favourable
external demand. Growth will mainly be private sector-driven, while the public sector
gradually consolidates. The growing consumer and business confidence since the
second quarter of 2003, strengthened economic fundamentals and the positive
impact of pro-growth fiscal and monetary measures are expected to mutually
reinforce robust consumer spending and the upturn in private investment activities.
The projections for growth in 2004 are based on a stronger global economic growth of
4.1% and led by synchronised recovery across all regions, an upturn in global
electronics cycle and firm prices for crude palm oil and crude oil. With the growth in
Asia stronger than the global average, Malaysia is also expected to benefit from the
continued expansion in intra-regional trade. The expectation of the stronger pace of
growth is also premised on the strength and dynamism of the private sector
performance, especially the strength of the upturn in domestic investment. Evidence
of higher new investments and capacity expansion are indicative that the recovery in
economic growth is sustainable. While possible downside risks remain, the strong
underlying fundamentals will provide strong foundations for economic resilience and
future growth.”
(Source : Bank Negara Annual Report 2003)
(b) Thai Economy
“The ASEAN economies as a whole is expected to expand at a faster pace of 4.9-6%
in 2004, with higher contribution form the domestic and external sectors. Within the
Group, Thailand is forecast to record the strongest growth in output, with growth of
6.3-7.3%. Following rising capacity utilisation, faster investment growth is expected,
with the bulk of investments comprising private sector investments in the
manufacturing sector, and reinforced by public sector infrastructure projects.’
(Source : Bank Negara Annual Report 2003)
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9TH DRAFT FOR DISCUSSION TAP/Annt/Draft dated 8 June 2004
16.2 Prospects of Industry
(a) Prospects of the Construction-related Industry
“Overall, construction-related industries recorded a firmer growth of 13.2%
(January-June 2002: 5.5%), while the iron and steel as well as non-metallic mineral
industry continued to perform better due to the continuing implementation of several
public roads and lowcost houses. These industries also continued to benefit from the
ongoing implementation of the package and other efforts to stimulate residential
housing and public infrastructure projects. Similarly, iron and steel also recorded
positive growth of 9.3%, while cement and ready-mixed concrete recorded higher
growth of 20.6% and 15.6%, respectively. With external demand anticipated to grow
by more than 14% this year, and the positive effect of the implementation of large
socio-economic infrastructure projects, such as the hospital cum apartment of
Lembaga Tabung Haji in Kuala Lumpur, Petronas Hospital, Kajang Sungai Ramal
Ring Road and the new Johore-Singapore bridge, the cement and concrete industry
is expected to improve further, increasing capacity utilisation of the industry to above
65%.”
(Source : Economic Report 2003/2004)
“Growth in the construction sector is envisaged to increase at a moderate rate of
1.5%, due to lower activity in the civil engineering sub-sector following the completion
of several infrastructure projects by the Government and the private sector.
Meanwhile, activities in the residential sub-sector is expected to remain strong in view
of the increase in new housing starts during the first nine months of 2003, as well as
ongoing work on projects under construction. Demand for residential property,
especially for affordable housing, would remain favourable, encouraged by the
incentives granted under the Economic Package, especially the stamp duty tax
exemption, tax relief and the waiver on the real property gains tax until the first half of
2004. Meanwhile, activity in the non-residential sub-sector is expected to remain
subdued, although on an improving trend, as the average occupancy rates for office
space and retail complexes have stabilised since the third quarter of 2003.
Investment in the construction sector would be sustained, mainly from the
development of several residential housing projects as well as ongoing privatised
road projects. In addition, large capital spending would emanate from other major
infrastructure projects in the transport and utilities sub-sectors such as building of
new power plants, expansion of port facilities and development of water projects.”
(Source: Bank Negara Malaysia Annual Report 2003)
(b) Prospects of the Power Industry
“During the Eighth Malaysia Plan period (2001-2005) the overall demand for energy is
expected to increase at 7.8% per annum to 1,688.8 petajoules (“PJ”) in 2005. The
energy intensity of the economy is anticipated to increase marginally from 5.7
gigajoules (“GJ”) in 2000 to 5.9GJ in 2005. The expected improvement in the quality
of life of the population will also result in an increase in energy usage. In this respect,
per capita consumption of energy is expected to increase by 5.8% per annum from
50.1GJ in 2000 to 66.4 GJ in 2005.
In line with the increased planned capacity in the power sector, the demand for
natural gas as well as coal and coke, is expected to grow at 9.0% and 8.1% per
annum, respectively. Electricity demand is projected to grow at 9.3% per annum,
thereby increasing its share of the total energy demand to 18.8% in 2005. Per capita
electricity consumption will also increase at the rate of 7.3% per annum to 3,472.5
kWh in 2005.”
(Source : Eighth Malaysia Plan 2001 – 2005)
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9TH DRAFT FOR DISCUSSION TAP/Annt/Draft dated 8 June 2004
“In order to contribute to the reduction of green house gases, the government has
embarked on programmes in promoting efficient use of energy as well as increasing
the use of renewable energy, particularly biomass from the agriculture sector, for
power generation. The Small Renewable Energy Program launched in 2001 is aiming
at encouraging private sector to use renewable resources, especially oil palm waste
from the palm oil industry, to generate electricity and supply to the local grids.
Given the uncertainties of the global economic environment, and particularly in this
region, the electricity demand in Malaysia in the coming years is expected to increase
moderately with a single digit rate of growth.”
(Source : Statistics of Electricity Supply Industry in Malaysia, 2003)
16.3 Prospects of Companies to be Acquired
(a) Prospects of Times Enterprise
Times Enterprise is principally engaged in general contracting, interior decorating,
mechanical and electrical contracting, in Thailand. Since 1998, it has handled
numerous projects which include interior works to Louis Vuitton Store, Gaysorn Plaza
Bangkok, Chanel Temporary Shop, Emporium, Bangkok, structural and architectural
works for Mazda and Volvo showrooms in Charoen Nakorn, Bangkok, the foundation,
structural and architectural works for the Celadon Restaurant, Sukhothai Hotel,
Bangkok and a design and built project for the Futaba JTW Factory.
With its track record, Times Enterprise is expected to continue building its foothold in
the construction sector in Thailand which is currently enjoying high growth. TAP
intends to build Times Enterprise into a regional player that is capable of bidding for
and managing cross border contracts in Asia in the future.
(b) Prospects of Transturbo
Transturbo is As a specialist engineering firm principally engaged in undertaking
specialised civil, mechanical and electrical works especially in the design, fabrication
and commissioning of turbines and energy producing facilities, the Directors of TAP
believe that Transturbo enjoys a unique niche market and to the best of the
knowledge of the Directors of TAP there are few players with Transtur.bo in Malaysia.
Its involvement in overhauling power plants and turbine maintenance assignments in
South East Asia will allow TAP to synergistically cross sell its capabilities regionally
under the TAP Group. In Malaysia where the power and energy sectors are expected
to grow in the coming years coupled with the Proposed Kalansa Acquisition and
Proposed Sunquest Acquisition, Transturbo is well positioned to benefit from
increased demand for fabrication of original equipment and other specialised civil
facilities associated with the construction of mini hydro stations, power generating
plants and related structures.
(c) Prospects of SGE
SGE is an engineering firm that specialises in geotechnical and structural works. It
has a strong team of engineering professionals that are capable of providing
engineering solutions to complex geotechnical and structural projects.
With its established track record, the limited number of players in the market and the
support from TAP, SGE expects to secure new contracts in the future.
(d) Prospects of Kalansa
Kalansa intends to apply to the Energy Commission to construct, own and operate
the Kalansa Power Plant. Upon its commissioning, the Kalansa Power Plant will be
capable of generating a maximum capacity of 6.5 MW and an export capacity of 5.0
MW.
36
9TH DRAFT FOR DISCUSSION TAP/Annt/Draft dated 8 June 2004
Under the SREPA, Kalansa agrees to sell and deliver electricity and SESB agrees to
purchase and accept, on and after the commercial operations date of the Kalansa
Power Plant, and for a term of twenty-one (21) years the electric energy output of the
Kalansa Power Plant (up to 5 MW) subject to the terms and conditions of SREPA.
The SREPA may be extended upon mutual agreement between Kalansa and SESB.
The sale of electricity by Kalansa to SESB under the SREPA will ensure long term,
consistent and stable income to Kalansa.
(e) Prospects of Sunquest
Sunquest intends to apply for a licence from the Energy Commission to construct,
own, operate and maintain the Sunquest Power Plant. Upon its commissioning, the
Sunquest Power Plant will be capable of generating a maximum capacity of 6.2 MW
with an export capacity of 5.0 MW.
Under the proposed REPPA, Sunquest agrees to sell and deliver electrical energy
and TNB agrees to purchase and accept, on and after the commercial operations
date of the Sunquest Power Plant, and for a term of twenty-one (21) years the electric
energy output of the Sunquest Power Plant subject to the terms and conditions of
REPPA. The proposed REPPA may be extended upon mutual agreement between
Sunquest and TNB.
In addition, the Sunquest Power Plant incorporates a capability to process empty
palm oil fruit bunches into premium low moisture fibres for export. The process will
provide Sunquest with additional revenue from a by-product of power generation
which otherwise would have been wasted.
The sale of electricity by Sunquest to TNB under the proposed REPPA and the export
sale of premium low moisture fibres will ensure long term, consistent and stable
income to Sunquest.
(f) Prospects of Elastic Quantum
Elastic Quantum is an engineering based company specialising in the design and
fabrication steel and metal structures. By adding to and complementing TAP’s civil,
structural and building capabilities, the Company expects to derive new contracts
from cross referrals from within the TAP Group and will also be in a stronger financial
position and technical footing to bid for and secure jobs of higher value and better
margins over the long term.
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9TH DRAFT FOR DISCUSSION TAP/Annt/Draft dated 8 June 2004
17.0 EFFECTS OF THE PROPOSALS
The Proposed Increase in Authorised Share Capital will not have any effect on the share
capital, earnings, shareholding structure and NTA of the TAP Group.
The effects of the Proposed Acquisitions and Proposed Rights Issue on the share capital,
earnings, shareholding structure and NTA of the TAP Group are illustrated below based on
the Minimum and Maximum Scenario:
17.1 On share capital
The changes in the share capital of TAP pursuant to the Proposals are illustrated as follows:-
Minimum Maximum
Scenario Scenario
No. of Shares No. of Shares
Existing share capital as at 30 April 2004 97,139,470 97,139,470
Upon full conversion of the Outstanding ICULS - 8,448,860
Upon full conversion of the Outstanding RCSLS - 35,301,856
97,139,470 140,890,186
Issued pursuant to:
Proposed Times Enterprise Acquisition 6,860,000 6,860,000
Proposed Sulta Nate Acquisition 336,000 336,000
Proposed Transturbo Acquisition 4,335,000 4,335,000
Proposed SGE Acquisition 10,800,000 10,800,000
Proposed Kalansa Acquisition 9,000,000 9,000,000
Proposed Sunquest Acquisition 11,000,000 11,000,000
Proposed Elastic Quantum Acquisition 7,500,000 7,500,000
Proposed Acquisitions 49,831,000 49,831,000
146,970,470 190,721,186
To be issued pursuant to the Proposed Rights Issue 48,569,735 70,445,093
195,540,205 261,166,279
Upon full exercise of the warrants 24,284,867 35,222,547
Enlarged issued and paid-up share capital 219,825,072 296,388,826
17.2 On earnings
The Proposals will not have any effect on the earnings of the TAP Group for the financial year
ending 30 April 2005 as the Proposals are only expected to be completed by the fourth
quarter of the financial year ending 30 April 2005. However, the Proposed Acquisitions are
expected to contribute positively to the future earnings of the TAP Group.
38
THIRD DRAFT FOR DISCUSSION TAP/Annt/Draft dated 06 November 201206/11/201206 November 201206/11/201208 June 2004
17.3 On substantial and foreign shareholding structure
As at 30 April 2004, the Company does not have any shareholders who hold more than 5% of the issued and fully paid-up share capital of TAP. However, the
effects of the Proposed Acquisitions and the Proposed Rights Issue on the foreign shareholding structure of the Company are set out below:
Minimum Scenario
After the Proposed After the Proposed Upon full exercise
(a) (b)
As at 30 April 2004 Acquisitions Rights Issue of the Warrants
No. of No. of No. of No. of
TAP Shares TAP Shares TAP Shares TAP Shares
Shareholders ‘000 % ‘000 % ‘000 % ‘000 %
Malaysian 91,942 94.6 1341,5773 91.6. 1807,548744 92.39 20310,53473 92.69
4 6.0 0 5.9
Foreign 5,197 5.4 125,31973 8.43. 147,992796 74.70 169,20915 7.44.
6 1
Total 97,139 100.0 146,970 100.0 195,540 100.0 219,825 100.0
Notes:
(a) Assuming all shareholders subscribe for their entitlement to the Proposed Rights Issue.
(b) Assuming all the Warrants are exercised into 24,284,867 new TAP Shares.
Maximum Scenario
Upon full conversion
of the Outstanding
ICULS and After the Proposed After the Proposed Upon full exercise
(a) (b)
As at 30 April 2004 Outstanding RCSLS Acquisitions Rights Issue of the Warrants
No. of No. of No. of No. of No. of
TAP Shares TAP Shares TAP Shares TAP Shares TAP Shares
Shareholders ‘000 % ‘000 % ‘000 % ‘000 % ‘000 %
Malaysian 91,942 94.6 135,693 96.3 1785,35284 937.5 24653,17437 947.3 2807,02984 946.5
3 0 0 9
Foreign 5,197 5.4 5,197 3.7 125,393197 62.57 147,992796 53.70 169,291095 53.15
Total 97,139 100.0 140,890 100.0 190,721 100.0 261,166 100.0 296,389 100.0
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THIRD DRAFT FOR DISCUSSION TAP/Annt/Draft dated 06 November 201206/11/201206 November 201206/11/201208 June 2004
Notes:
(a) Assuming all shareholders subscribe for their entitlement to the Proposed Rights Issue.
(b) Assuming all the Warrants are exercised into 35,222,547 new TAP Shares.
40
7TH DRAFT FOR DISCUSSION TAP/Annt/Draft dated 08 June 2004
17.4 On NTA
The proforma effects of the Proposed Acquisitions and Proposed Rights Issue on the
consolidated NTA of the TAP Group, based on the consolidated audited financial statements
as at 30 April 2003, presented solely for illustration purposes only, are as follows:-
Minimum Scenario
* Adjusted After ** After Upon full
Audited as at audited as at Proposed Proposed exercise of
Group 30 April 2003 30 April 20043 Acquisitions Rights Issue the Warrants
RM’000 RM’000 RM’000 RM’000 RM’000
Share capital 43,999 97,139 146,970 195,540 219,825
Share premium 23,039 23,039 23,039 5,468 5,468
Reserves (92,804) (92,804) (92,804) (92,804) (92,804)
Shareholders Funds (25,766) 27,374 77,205 108,204 132,489
Less: Goodwill *** - - (29,192) (29,192) (29,192)
NTA/ (NTL) (25,766) 27,374 48,013 79,012 103,297
NTA/(NTL) per share
(RM) (0.59) 0.28 0.33 0.40 0.47
Notes:
* Based on the audited financial statement as at 30 April 2003 and taking into consideration the
following:
(a) the 23,392,729 ICULS and 415,076 RCSLS converted into 23,392,729 and 415,076
new TAP Shares respectively from 1 May 2003 to 30 April 2004; and
(b) Rights issue of 29,332,666 new TAP Shares on the basis of 2 rights shares for every
3 existing TAP Shares held, which was completed in August 2003.
** The estimated expenses in relation to the Proposals of RM3,000,000 will be written off against
the share premium account.
*** Goodwill is net of reserve on consolidation.
Maximum Scenario
#
Adjusted After
##
After Upon full
Audited as at audited as at Proposed Proposed exercise of
Group 30 April 2003 30 April 2003 Acquisitions Rights Issue the Warrants
RM’000 RM’000 RM’000 RM’000 RM’000
Share capital 43,999 140,890 190,721 261,166 296,389
Share premium 23,039 23,039 23,039 - -
Reserves (92,804) (92,804) (92,804) (93,898) (93,898)
Shareholders Funds (25,766) 71,125 120,956 167,268 202,491
###
Less: Goodwill - - (29,192) (29,192) (29,192) Formatted: Superscript
NTA/ (NTL) (25,766) 71,125 91,764 138,076 173,299
NTA/(NTL) per
share (RM) (0.59) 0.50 0.48 0.53 0.58
Notes:
# Based on the audited financial statement as at 30 April 2003 and taking into consideration the
following:
(a) the 23,392,729 ICULS and 415,076 RCSLS converted into 23,392,729 and 415,076
new TAP Shares respectively from 1 May 2003 to 30 April 2004;
(b) Rights issue of 29,332,666 new TAP Shares on the basis of 2 rights shares for every
3 existing TAP Shares held, which was completed in August 2003; and
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7TH DRAFT FOR DISCUSSION TAP/Annt/Draft dated 08 June 2004
(c) Assuming that Outstanding ICULS and Outstanding RCSLS are converted into
8,448,860 and 35,301,856 new TAP Shares respectively.
## The estimated expenses in relation to the Proposals of RM3,000,000 will be written off partly
against the share premium account and partly against the accumulated losses.
### Goodwill is net of reserve on consolidation.
17.5 Dividends
TAP did not declare any dividend for the financial year ended 30 April 2003. The Directors of
TAP will only determine the quantum of dividend payable, if any, for the financial year ending
30 April 2004 after taking into consideration, amongst others, the future performance,
cashflow position and funding requirements of the TAP Group and upon the finalisation of the
audit of the TAP Group’s financial statements.
18.0 APPROVALS REQUIRED
18.1 The Proposed Acquisition
The Proposed Acquisitions are subject to the approvals of the following:-
(a) the SC for the Proposed Acquisitions and the issue of the new TAP Shares pursuant to
the Proposed Acquisitions;
(b) the FIC, which is now processed by the SC;
(c) the approval-in-principal of Bursa Malaysia, for the listing of and quotation for the new
TAP Shares to be issued pursuant to the Proposed Acquisitions;
(d) Bank Negara Malaysia (“BNM”)BNM, for the Proposed Times Enterprise Acquisition and
Proposed Sulta Nate Acquisition (if applicable);
(e) the shareholders of TAP, and the relevant vendors, where applicable, at an
extraordinary general meeting (“EGM”) to be convened;
(f) any other relevant authorities.
18.2 The Proposed Rights Issue
The Proposed Rights Issue is subject to the approvals of the following:-
(a) the SC for the following:-
(i) the Proposed Rights Issue; and
(ii) the registration of the Abridged Prospectus pursuant to the Securities
Commission Act, 1993 and its subsequent lodgement with the Registrar of
Companies;
(b) the approval-in-principal of Bursa Malaysia for the following:-
(i) the admission of the Warrants to the Official List; and
(ii) the listing of and quotation for the Rights Shares and new TAP Shares to be
issued pursuant to the exercise of the Warrants;
(c) the shareholders of TAP at an EGM to be convened;
(d) the FIC, which is now processed by the SC; and
(e) BNM for the issuance of the Warrants to non-residents.
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7TH DRAFT FOR DISCUSSION TAP/Annt/Draft dated 08 June 2004
18.3 The Proposed Increase in Authorised Share Capital
The Proposed Increase in Authorised Share Capital is subject to the approval of the
shareholders of TAP at an EGM to be convened.
19.0 DIRECTORS’ AND SUBSTANTIAL SHAREHOLDERS’ INTERESTS
None of the other Directors and/or substantial shareholders of TAP or any persons connected
with the Directors and/or substantial shareholders of TAP have any interest, direct and/or
indirect, in the Proposals, apart from their entitlements under the Proposed Rights Issue.
20.0 DIRECTORS’ OPINION ON THE PROPOSALS
The Directors of TAP are of the opinion that the Proposals are in the best interest of the
Company. They are also of the view that the terms of the Proposals are fair and reasonable to
the shareholders of TAP.
21.0 DEPARTURE FROM THE SECURITIES COMMISSION’S POLICIES AND GUIDELINES ON
ISSUE/OFFER OF SECURITIES (“SC GUIDELINES”)
Save for the following, Tto the best of the knowledge and belief of the Directors of TAP, the
Proposals do not involve any departure from the SC Guidelines.:-
Section 12.07(b)(i) of Chapter 12 of SC Guidelines requires that “for acquisitions which do not
result in a change in dominant shareholder/Board, assets to be injected should already be
income-generating, with an uninterrupted track record of profitability of two (2) years and have
good immediate prospects of strong profits and cashflows which will be beneficial to the listed
company. ”
An application will be made to the SC to seek a waiver from having to comply with the
requirement that the assets to be injected should already be income-generating, with an
uninterrupted track record of profitability of two (2) years in respect of the Proposed Kalansa
Acquisition and Proposed Sunquest Acquisition.
22.0 ADVISER
The Board of Directors of TAP has appointed Alliance Merchant Bank Berhad as the Adviser
for the Proposals.
23.0 ESTIMATED TIMEFRAME FOR COMPLETION
Barring any unforeseen circumstances, the estimated time of completion for the Proposals will
be byin the fourth quarter of the financial year ending 30 April 2005.
24.0 APPLICATION TO THE RELEVANT AUTHORITIES
The Directors of TAP expect to submit an application to the relevant authorities in relation to
the Proposals within six (6) months from the date of this announcement.
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7TH DRAFT FOR DISCUSSION TAP/Annt/Draft dated 08 June 2004
25.0 DOCUMENTS FOR INSPECTION
The Times Enterprise SPA, Sulta Nate SPA, Transturbo SPA, SGE SPA, Kalansa SPA,
Sunquest SPA and Electric Quantum SPA are available for inspection during the normal office
hours (except public holidays) at the registered office of TAP at No.18, Block B, Jalan 1/89B
(Seksyen 92A), Batu 3 1/2, Off Jalan Sungei Besi, 57100 Kuala Lumpur from the date of this
announcement up to the date of the last condition of the Proposed Acquisitions being met.
This announcement is dated 8 June 2004.
44
