1. INTRODUCTION
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Pursuant to paragraph 9.19(23) of the Bursa Malaysia Securities Berhad (“Bursa Securities”) Main Market Listing Requirements (“Main LR”), we wish to announce that TM has on 27 November 2013 entered into a conditional Share Sale Agreement (“SSA”) with Gapurna Global Solutions Sdn. Bhd. (“GGS”) to acquire the entire equity interest held by GGS in GTC Global Sdn. Bhd. (“GTC”) for a total consideration of RM45,000,000.00 (“Purchase Consideration”) to be satisfied by way of cash (“Proposed Acquisition”).
2. DETAILS OF THE PROPOSED ACQUISITION 2.1 Salient Terms of the SSA
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(i) the approval of the Board of Directors of TM and GGS;
(ii) the consent of Kementerian Perumahan Dan Kerajaan Tempatan (“KPKT”) for the change of control of GTC pursuant to the sale of the Sale Shares to the Purchaser (required pursuant to contract dated 24 May 2010 entered into between the Government of Malaysia (as represented by KPKT and GTC), shall have been obtained by GTC;
(iii) the consent of GTC’s financiers, shall have been obtained by GTC; and
(iv) there has been no change to any representation, warranty or undertaking under the SSA or any material adverse change in the financial conditions of GTC or any change to the rights to the Sale Shares up to the Unconditional Date.
The “Unconditional Date” shall mean the date on which the Conditions Precedent have been fulfilled in accordance with the terms and conditions of the SSA.
(i) On the date of execution of the SSA, TM shall deposit with TM’s Solicitors the sum of RM2,250,000.00 being five per cent (5%) of the Purchase Consideration (“Deposit”) of which such amount is to be held by TM’s Solicitors as stakeholders. The Deposit shall be released to GGS as payment of the Purchase Consideration together with interest and any other benefit accrued to the Deposit on the Completion Date; and
(ii) The sum of RM42,750,000.00 being the balance of the Purchase Consideration shall be paid by TM to GGS on the Completion Date.
The salient terms of the SSA, include, inter-alia the following:-
(a) GGS agrees to sell to TM and TM agrees to purchase the entire equity interests of GGS in GTC (“Sale Shares”) free from all liens, charge and encumbrances and with full legal and beneficial title together with all rights attaching thereto and on the basis of the warranties provided by GGS under the SSA.
(b) the SSA is conditional upon fulfillment of the following Conditions Precedent, amongst others, within three (3) months from the date of the SSA or such other date as may be agreed upon between TM and GGS:-
(c) The Purchase Consideration will be paid by TM to GGS in the following manner:-(d) The Completion Date of the Proposed Acquisition shall be the business day falling fourteen (14) days after the Conditions Precedent are fulfilled under the SSA or such other date as may be agreed upon between the TM and GGS.
2.2 Purchase Consideration
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The purchase consideration of RM45,000,000.00 in respect of the Proposed Acquisition was arrived at on a willing seller willing buyer basis after taking into consideration: -
(a) the audited net profit after taxation of GTC for the financial year ended 31 December 2012 of RM3,520,013; and
(b) the audited net assets of GTC as at 31 December 2012 of RM44,419,762.
The Proposed Acquisition will be financed via internally generated funds.
Save for TM’s obligation to procure the release of GGS or its related corporation from all guarantees given by GGS or its related corporation in respect of any obligation of GTC and the liabilities incurred in the ordinary course of business of GTC, there are no other liabilities of GTC to be assumed by TM pursuant to the Proposed Acquisition.
3.0 INFORMATION ON THE PARTIES 3.1 TM
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TM is a public listed company duly incorporated in Malaysia on 12 October 1984, with an authorised share capital of RM3,528,003,015.00 divided into 5,040,000,020 ordinary shares of RM0.70 each, 1 Special Rights Redeemable Preference Share (Special Share) of RM1.00, 2,000 Class C Non-Convertible Redeemable Preference Shares (“NCRPS”) of RM1.00 each and 1,000 Class D NCRPS of RM1.00 each. The issued and paid-up share capital of the Company is RM2,504,184,312.00 comprising 3,577,401,980 ordinary shares of RM0.70 each, 1 Special Share of RM1.00, 2,000 Class C NCRPS of RM1.00 each and 925 Class D NCRPS of RM1.00 each.
The principal activities of TM are the establishment, maintenance and provision of telecommunications and related services.
3.2 GGS
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GGS, is a private company limited by shares duly incorporated in Malaysia on 23 December 2008, with an authorised share capital of RM1,000,000.00 divided into 500,000 ordinary shares of RM1.00 each and 500,000 redeemable preference shares of RM1.00 each. The issued and paid-up share capital of GGS is RM147,100.00 divided into 100 ordinary shares of RM1.00 each and 147,000 redeemable preference shares of RM1.00 each.
GGS is a wholly owned subsidiary of Malaysian Resources Corporation Berhad (“MRCB”).
The principal activities of GGS are property and investment holding.
3.3 GTC
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GTC, is a private company limited by shares duly incorporated in Malaysia on 25 September 2001, with an authorised share capital of RM10,000,000.00 divided into 9,000,000 ordinary shares of RM1.00 each and 1,000,000 redeemable preference shares of RM1.00 each. The issued and paid-up share capital of GTC is RM1,125,000.00 divided into 1,000,000 ordinary shares of RM1.00 each and 125,000 redeemable preference shares of RM1.00 each.
GTC is a wholly-owned subsidiary of GGS, which in turn is a wholly-owned subsidiary of MRCB.
The principal activities of GTC are in integrated security surveillance systems and related activities.
4. RATIONALE OF THE PROPOSED ACQUISITION
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The Proposed Acquisition will complement TM’s core competencies as well as broaden TM Group’s capabilities in the information and communications technology (“ICT”) to better serve its range of customers, particularly in the Enterprise and Government segments.
5. FINANCIAL EFFECT 5.1 Share capital and substantial shareholders’ shareholdings
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The SSA will not have any effect on the issued and paid-up share capital as well as the substantial shareholders’ shareholdings of TM.
5.2 Earnings and Net Assets
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The SSA is not expected to have any material effect to the earnings and net assets of TM Group for the financial year ending 31 December 2013.
6. APPROVALS REQUIRED
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The Proposed Acquisition is not subject to the regulatory approval of any governmental authorities or the approval of shareholders of TM.
7. ESTIMATED TIMEFRAME FOR COMPLETION
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The Proposed Acquisition is expected to be completed by the 1st quarter of 2014.
8. DIRECTORS’ AND MAJOR SHAREHOLDERS’ INTERESTS
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None of the Directors and other major shareholders of TM and/or persons connected to them has any interest, whether direct or indirect, in the Proposed Acquisition.
9. HIGHEST PERCENTAGE RATIO APPLICABLE TO THE PROPOSED ACQUISITION
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The highest percentage ratio applicable to the Proposed Acquisition pursuant to paragraph 10.02(g) of the Main LR is 0.7%.
10. BOARD OF DIRECTORS’ STATEMENT
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The Board of Directors of TM having considered the rationale of entering into the SSA, is of the view that the transaction is in the best interest of TM Group.
11. DOCUMENTS AVAILABLE FOR INSPECTION
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A copy of the SSA will be available for inspection at the registered office of TM at Level 51, North Wing, Menara TM Jalan Pantai Baharu 50672 Kuala Lumpur, during normal office hours on any weekday (except public holidays) for a period of 3 months from the date of this announcement.
This announcement is dated 27 November 2013.
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