Signing Of Joint Venture Agreement Between Ncsb engineering Sdn. Bhd. And Chiew Kee Engineering Sdn. Bhd.

BackJun 13, 2008
1) INTRODUCTION

The Board of Directors of Naim Cendera Holdings Berhad ("Naim") wishes to announce that its wholly owned sub-subsidiary, NCSB Engineering Sdn. Bhd. ("NCSBE") has entered into a Joint Venture Agreement with Chiew Kee Engineering Sdn. Bhd. ("CKE") on 12 June 2008 to jointly establish and operate an asphalt plant in Sarawak .

2) INFORMATION ON CKE

CKE was incorporated on 20 December 1997 as construction contractor with a paid-up capital of 1,000,000 ordinary shares of RM1.00 each. Mr Wong Sei Ping and Mr Robert Asing each hold 50% equity in CKE.


3) SALIENT TERMS OF THE JOINT VENTURE AGREEMENT ("JV Agreement" or "JV")

The JV Agreement was entered into between NCSB and CKE to jointly set up a joint venture company called Plus Viable Sdn. Bhd. ("PVSB") to establish and operate an asphalt plant in Sarawak.

a)the shareholding structure shall be as follows:-

i) NCSBE - 70%
ii) CKE - 30%

b)the JV Agreement sets out the shareholders' obligations and covenants as follows:-

i)NCSB agrees and convenants as follows:-

- to promote the business of PVSB generally; and
- to provide PVSB with whatever assistance within NCSBE's capability to promote the success of PVSB as a business enterprise.

ii)CKE agrees and convenants as follows:-

- to provide PVSB with all requisite technical assistance and support for developing its business;
- to assist in recruiting key employees with the required experience and qualification to carry out the day to day activities of PVSB and
- to assist PVSB to successfully develop its business.

c)The JV Agreement also sets out the terms governing the relationship between NCSB and CKE as shareholders of PVSB including the composition of the Board of Directors and transfer restrictions on shareholdings.


4)INFORMATION ON PVSB

PVSB was incorporated on 2 March 2007 and has an authorised share capital of RM100,000.00 divided into 100,000 ordinary shares of RM1.00 each. The issued and paid-up share capital is RM2.00 comprising 2 shares.

PVSB has not commenced operation since its inception and has no liabilities.

5)CAPITAL INVESTMENT AND FUNDING

The initial capital investment is estimated to be RM3 million, Naim's portion of RM2.1 million shall be funded by internally generated funds.

CKE's capital contribution shall be in kind, in the form of plant, machinery and mobile equipments for the setting up of the asphalt plant at a discounted value of RM900,000.00. Messrs CH Williams Talhar Wong & Yeo valued the plant, machinery and mobile equipments at the market price of RM989,600.00.

6)RATIONALE FOR THE JV

In the local construction industry the norm for major road construction contractors is to operate their own bitumen plant, to cater for their own needs and surplus to sell in the market, hence a shortage of asphalt in the market and prices are highly volatile.

The rationale for the JV is to establish an onsite asphalt plant to stabilize price of asphalt and to ensure consistent supply of bitumen for NCSBE's road construction projects.

7)FINANCIAL EFFECTS OF THE JV

The JV arrangement is not expected to have any material effects on the share capital and shareholding structure of the Company. PVSB is expected to contribute positively to the earnings and/or net assets of Naim for the year ended 31 December 2008 and beyond.

8)APPROVAL REQUIRED

The JV is not subject to the approval of the shareholders of Naim or any government authorities

9)DIRECTORS' AND MAJOR SHAREHOLDERS' INTEREST

None of the directors and/or major shareholders of Naim or persons connected to them have any interest, direct or indirect, in the above JV.

10)DIRECTORS' STATEMENT

The Board of Directors is of the opinion that the JV arrangement is in the best interest of the company.

11) DOCUMENT FOR INSPECTION

The JV Agreement is available for inspection at the registered office of Naim at 9th Floor Wisma Naim, 2 ? Mile, Jalan Rock, 93200 Kuching, Sarawak during normal office hours for a period of fourteen days from the date of this announcement.




This announcement is dated 13th day of June 2008