1. INTRODUCTION
Naim wishes to announce that the Company together with the other shareholders (collectively known as the "Vendors") of Dayang Enterprise Sdn Bhd ("DESB"), DESB Marine Services Sdn. Bhd. ("DMSSB") and Fortune Triumph Sdn Bhd ("FTSB") (collectively known as the "Dayang Companies") have on 28th December 2007 entered into the following conditional Share Sale Agreements with Dayang Enterprise Holdings Berhad ("DEHB" or "Purchaser") to facilitate the listing and quotation of DEHB on the Main Board of Bursa Malaysia Securities Berhad ("Proposed Listing"):-
(a) conditional Share Sale Agreement ("CSSA 1") between the Vendors and DEHB for the disposal of the entire issued and paid-up ordinary share capital of DESB comprising 2,600,000 ordinary shares of RM1.00 each ("Shares") ("DESB Shares") for RM62,503,443to DEHB to be satisfied via the issuance of 125,006,621 new ordinary shares of RM0.50 each in DEHB at an issue price of approximately RM0.50 per shares ("Proposed DESB Share Exchange");
(b) conditional Share Sale Agreement ("CSSA 2") between the Vendors and DEHB for the disposal of the entire issued and paid-up ordinary share capital of DMSSB comprising 11,000,000 Shares ("DMSSB Shares") for RM55,871,579 to DEHB to be satisfied via the issuance of 111,742,922 new ordinary shares of RM0.50 each in DEHB at an issue price of approximately RM0.50 per shares ("Proposed DMSSB Share Exchange"); and
(c) conditional Share Sale Agreement ("CSSA 3") between the Vendors and DEHB for the disposal of the entire issued and paid-up ordinary share capital of FTSB comprising 20,000 Shares ("FTSB Shares") for RM4,538,237 to DEHB to be satisfied via the issuance of 9,076,455 new ordinary shares of RM0.50 each in DEHB at an issue price of approximately RM0.50 per shares ("Proposed FTSB Share Exchange").
(the CSSA 1, CSSA 2 and CSSA 3 are collectively referred to herein under as "CSSAs"; the Proposed DESB Share Exchange, Proposed DMSSB Share Exchange and Proposed FTSB Share Exchange are collectively referred to herein under as "Proposed Share Exchange"; the DESB Shares, DMSSB Shares and FTSB Shares are collectively referred to herein under as "Sale Shares")
2. THE PROPOSED SHARE EXCHANGE
2.1 Details of the Proposed Share Exchange
The Proposed Share Exchange involves, amongst others, the disposals by Naim of its entire equity interests in DESB, DMSSB and FTSB to DEHB for an aggregate consideration of RM55,310,967 to be wholly satisfied by the issuance of 110,621,700 new ordinary shares of RM0.50 each in DEHB at an issue price of approximately RM0.50 per share in the following manner:-
(a) Disposal of 45% equity interest in DESB to DEHB for a consideration of RM28,126,549 to be wholly satisfied by the issuance of 56,252,980 new ordinary shares of RM0.50 each in DEHB at an issue price of approximately RM0.50 per share;
(b) Disposal of 45% equity interest in DMSSB to DEHB for a consideration of RM25,142,211 to be wholly satisfied by the issuance of 50,284,315 new ordinary shares of RM0.50 each in DEHB at an issue price of approximately RM0.50 per share; and
(c) Disposal of 45% equity interest in FTSB to DEHB for a consideration of RM2,042,207 to be wholly satisfied by the issuance of 4,084,405 new ordinary shares of RM0.50 each in DEHB at an issue price of approximately RM0.50 per share.
2.2 Background Information Of The Dayang Companies
DESB, DMSSB and FTSB are presently 45% associated companies of Naim.
(a) DESB
DESB was incorporated in Malaysia on 20 August 1980 under the Companies Act, 1965 ("Act") as a private limited company. At present the authorised share capital of DESB is RM5,000,000 comprising 5,000,000 Shares of which RM2,600,000 comprising 2,600,000 Shares are issued and credited as fully paid-up.
DESB is licensed by Petroliam Nasional Berhad ("Petronas") to carry out the business of offshore maintenance and construction services and is principally involved in the provision of maintenance services for topside structures, pipes and valves, and electrical and instrumentation, fabrication operations and hook-up and commissioning services for the oil and gas industry.
The Company acquired its 45% equity interest in DESB on 27 August 2007 for RM56,138,205.
(b) DMSSB
DMSSB was incorporated in Malaysia under the Act on 18 November 2003 as a private limited company and it commenced operations in May 2005. At present, the authorised share capital of DMSSB is RM25,001,300 comprising 25,000,000 Shares and 130,000 preference shares of RM0.01 each. Its issued and fully paid-up share capital is RM11,001,300 comprising 11,000,000 Shares and 130,000 preference shares of RM0.01 each.
DMSSB is principally involved in the charter of marine vessels including floating accommodation and catering to the oil and gas industry. DMSSB currently owns three (3) marine vessels.
The Company acquired its 45% equity interest in DMSSB on 27 August 2007 for RM28,746,606.
(c) FTSB
FTSB was incorporated in Malaysia on 3 December 1997 under the Act as a private limited company and it commenced operations in March 1999. At present, the authorised share capital of FTSB is RM100,000 comprising 100,000 Shares of which RM20,000 comprising 20,000 Shares are issued and credited as fully paid-up.
FTSB is principally involved in the business of providing rental equipment and machinery to the oil and gas industry.
The Company acquired its 45% equity interest in FTSB on 27 August 2007 for RM2,865,189.
2.3 Salient Terms Of The Conditional CSSAS
A summary of the salient terms of the conditional CSSAs is as follows:-
(a) The CSSAs and the issue of the new shares in DEHB to the Vendors are subject to the following conditions precedent ("Conditions Precedent") being obtained within 12 months from the date of this Agreement ("Condition Period"):-
(i) the approval of Securities Commission ("SC") for the Proposed Listing (which comprise, amongst others, the Proposed Share Exchange), purchase of the Sale Shares and the issuance of the new shares in DEHB to the Vendors ("SC Approval");
(ii) the approval of the Equity Compliance Unit of the SC under the requirements of the Foreign Investment Committee for the acquisition of the Sale Shares by DEHB and issuance of the new shares in DEHB to the Vendors ("FIC Approval");
(iii) the approval of the Ministry of International Trade and Industry ("MITI") for the recognition of existing Bumiputra shareholders/new Bumiputra investors ("MITI Approval");
(iv) the approval of the Board of Directors and shareholders of the DEHB to purchase the Sale Shares;
(v) the satisfactory outcome of due diligence report ("Due Diligence Report"); and
(vi) such other consents or approvals as may be required by any third party or governmental, regulatory body;
(b) In the event that the approvals are not obtained by the expiration of the Conditions Period, the Vendors and DEHB shall mutually agree to such extended period or periods to fulfill the Conditions Precedent. In the event that the Conditions Precedent is not fulfilled by the expiration of the extended date, then the CSSAs shall terminate;
(c) Subject to the fulfilment of the Conditions Precedent and the terms and conditions as contained in CSSAs, the Vendors shall sell their respective shareholdings in the Dayang Companies and DEHB shall purchase the Sale Shares free from all claims, liens, pledges, charges and other encumbrances whatsoever and with all rights, benefits and entitlements now and thereafter attaching thereto except for any dividends and other distributions declared, paid or made in respect of the sale shares before the completion date;
(d) DEHB shall be responsible for submitting and obtaining the SC Approval, the MITI Approval, the FIC Approval, DEHB Shareholders' Approval and the Due Diligence Report and such other approvals and consent as stated in 2.3(a)(vi) above;
(e) In the event that the terms of the CSSAs are varied:-
(i) pursuant to conditions imposed by any of the relevant authorities and are accepted and agreed to by all parties hereto, variations shall be made to the terms of the CSSAs including but not limited to the adjustment of the number of new shares in DEHB to be issued by DEHB to the Vendors;
(ii) pursuant to an appeal for an amendment or waiver of the terms and conditions, as the case may be, and are not accepted and agreed to by the parties hereto, then the parties hereto shall negotiate in good faith in a view to adjusting the terms of CSSAs in a manner such that the revised terms would be approved by such of the relevant authorities which has imposed conditions but subject always to terms that reflect the fundamental terms of the CSSAs; and
(iii) The Vendors and DEHB may in their absolute discretion elect to waive any of the Conditions Precedent and proceed to complete the CSSAs provided that such waiver shall not be in contravention of any statutory provisions, regulations and/or guidelines and requirements.
2.4 Basis Of Arriving At The Disposal Consideration
The disposal consideration was arrived at on a willing-buyer willing-seller basis after taking into consideration the adjusted/revalued net assets ("NA") of the Dayang Companies as at 30 September 2007 of approximately RM122,913,259 in the following manner:-
(a) 45% of the audited NA of DESB as at 30 September 2007 of RM66,503,443 and after adjustment for a final dividend of RM4,000,000 declared in respect of the financial year ended 30 September 2007;
(b) 45% of the audited NA of DMSSB as at 30 September 2007 of RM55,871,579 and after taking into consideration a net revaluation surplus on the three (3) marine vessels of DMSSB of RM25,053,136. The market value of the marine vessels were valued by Messrs. Knight Frank Ooi & Zaharin Sdn Bhd, an independent firm of valuers; and
(c) 45% of the audited NA of FTSB as at 30 September 2007 of RM4,538,237.
2.5 Basis Of Determining The Issue Price of the New Shares in DEHB
The issue price of approximately RM0.50 per new shares in DEHB to be issued pursuant to the Proposed Share Exchange is based on the par value of the shares in DEHB.
2.6 Rights and ranking of the New Shares in DEHB
The new shares in DEHB to be issued pursuant to the Proposed Share Exchange shall, upon allotment and issuance, shall rank pari passu in all respects with each other.
3. BACKGROUND INFORMATION OF DEHB
DEHB was incorporated in Malaysia on 10th October 2005 under the Act as a public company. The authorized share capital of DEHB is RM100,000 comprising 200,000 ordinary shares of RM0.50 each, of which RM1.00 comprising 2 ordinary shares of RM0.50 each have been issued and fully paid-up. DEHB has not commenced operation.
The existing directors and shareholders of the DEHB are Ling Suk Kiong and Tengku Yusof Bin Tengku Ahmad Shahruddin, each holding one (1) ordinary share of RM0.50 each in DEHB.
4. RATIONALE
The Proposed Share Exchange is to facilitate the Proposed Listing of DEHB.
The objectives of the Proposed Listing are:-
(a) to further enhance the value of Naim's investments in the Dayang Companies;
(b) to provide funds for the expansion of the Dayang Companies and its future working capital requirements; and
(c) to enable Dayang Companies to gain access to the capital markets for funds for its future expansion, diversification and the overall continued growth.
5. RISK FACTORS
Naim will not assume additional risks pursuant to the Proposed Share Exchange as the Proposed Share Exchange does not involve any change to the existing business operation of the Dayang Companies.
6. EFFECTS OF THE PROPOSED SHARE EXCHANGE
6.1 Share Capital
As the Proposed Share Exchange will not involve any issuance of securities by Naim, it will not have any effect on the issued and paid-up share capital of Naim.
6.2 Earnings and Earnings per Shares
The Proposed Share Exchange is not expected to have any material effect on the earnings and earnings per shares of Naim and its subsidiaries (collectively "Naim Group") for the financial year ending 31 December 2007.
6.3 NA and Gearing
The Proposed Share Exchange will not have any material effect on the NA and gearing of the Naim Group.
6.4 Shareholding Structure
As the Proposed Share Exchange will not involve any issuance of securities by Naim, it will not have any effect on the substantial shareholders' shareholdings in Naim.
6.5 Dividend
For the financial year ending 31 December 2007, Naim has declared a total gross interim dividends of 15.0 sen per share less tax at 27%.
The Proposed Share Exchange is not expected to have any material effect on the dividends to be declared by Naim for the financial year ending 31 December 2007. The declaration of dividends in the future years will be dependent upon the financial position and performance of the Naim Group.
7. CONDITIONS OF THE PROPOSED SHARE EXCHANGE
The Proposed Share Exchange is subject to the following approvals being obtained:-
(i) the SC Approval;
(ii) the FIC Approval;
(iii) the MITI Approval;
(iv) the approval of the Board of Directors and shareholders of DEHB to purchase the Sale Shares;
(v) the Due Diligence Report; and
(vi) such other consents or approvals as may be required by any third party or governmental/regulatory body;
The Proposed Exchange is not subject to the approval of the shareholders of Naim. A copy of this Announcement will be dispatched to the shareholders of Naim for their information only.
8. DIRECTORS' AND MAJOR SHAREHOLDERS INTERESTS
Save for the following directors and major shareholders, none of the directors and/or major shareholders of Naim or persons connected to the directors and/or substantial shareholders of Naim have any interest, direct or indirect in the Proposed Share Exchange.-
(i) Datuk Hasmi Bin Hasnan,
(a) director of Naim and Dayang Companies and
(b) holding 28,918,850 (11.8%) direct shareholdings and 40,480,500 (16.6%) indirect shareholdings in Naim
(ii) Dr. Sharifuddin Bin Abdul Wahab
(a) director of Naim and Dayang Companies and
(b) holding 151,700 direct shareholding (0.06%) in Naim
Save for Datuk Hasmi Bin Hasnan's deemed interest in the Dayang Companies via his substantial shareholdings in Naim, Datuk Hasmi Bin Hasnan and Dr. Sharifuddin Bin Abdul Wahab do not have any shareholdings in the Dayang Companies.
9. DIRECTORS' RECOMMENDATION
The Board of Directors of Naim ("Board"), having taken into consideration all aspects of the Proposed Share Exchange, is of the opinion that the Proposed Share Exchange is in the best interest of Naim.
10. DEPARTURE FROM THE SECURITIES COMMISSION'S POLICIES AND GUIDELINES ON ISSUE/ OFFER OF SECURITIES ("SC GUIDELINES")
To the best knowledge of the Board, the Proposed Share Exchange does not depart from the SC Guidelines.
11. ESTIMATED TIMEFRAME FOR COMPLETION OF THE PROPOSED SHARE EXCHANGE
Barring any unforeseen circumstances, the Proposed Share Exchange is expected to be completed by the second quarter of 2008.
12. SUBMISSION TO THE AUTHORITIES
The applications to the relevant authorities for the Proposed Listing (which comprises, amongst others, the Proposed Share Exchange) are expected to be submitted within one (1) month from the date of this Announcement.
13. DOCUMENTS FOR INSPECTION
The CSSAs may be inspected at the registered office of Naim at 9th Floor, Wisma Naim, 2? Mile, Rock Road, 93200 Kuching, Sarawak during normal office hours from Monday to Friday (except public holidays) for a period of three (3) months from the date of this Announcement.
This announcement is dated 28th day of December 2007
