News
Proposed disposal by Bursa Malaysia Securities Clearing Sdn. Bhd. ("Bursa Securities Clearing") of property bearing postal address No. 43, Green Hall, Georgetown, 10200 Pulau Pinang ("Proposed Disposal")
BackMar 03, 2006
| General Announcement Reference No BM-060303-66480 |
| Company Name | : | BURSA MALAYSIA BERHAD |
| Stock Name | : | BURSA |
| Date Announced | : | 03/03/2006 |
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| Type | : | Announcement |
| Subject | : | Proposed disposal by Bursa Malaysia Securities Clearing Sdn. Bhd. ("Bursa Securities Clearing") of property bearing postal address No. 43, Green Hall, Georgetown, 10200 Pulau Pinang ("Proposed Disposal") |
Contents :
1. Introduction
The Board of Directors of Bursa Malaysia Berhad ("Bursa" or "Company") is pleased to announce that it has on 3 March 2006 agreed to accept an offer by Hwang Enterprises Sdn. Bhd. ("HESB") for disposal by Bursa of the property bearing postal address No. 43, Green Hall, Georgetown, 10200 Pulau Pinang to HESB for a cash consideration of RM4.4 million subject to such other terms and conditions as may be agreed between parties.
Bursa will commence negotiations on the other terms of the transaction, prior to entering into a Sale and Purchase Agreement ("SPA") with HESB. Full details on the Proposed Disposal will be announced upon the execution of the SPA.
Proceeds from the Proposed Disposal are intended to be used for working capital purposes.
2. Details of the Proposed Disposal
2.1 Proposed Disposal
The Proposed Disposal involves the disposal by Bursa Securities Clearing, a wholly-owned subsidiary of Bursa Malaysia Berhad, of a property bearing postal address No. 43, Green Hall, Georgetown, 10200 Pulau Pinang ("the Property") for a cash consideration of RM4.4 million. The Property will be sold free from all encumbrances and with vacant possession.
Information on HESB
HESB was incorporated in Malaysia under the Companies Act, 1965 on 11 January 1991 as a private limited company. The principal activity is to invest in shares and real estate.
HESB has an authorized share capital of RM5,000,000 divided into 5,000,000 ordinary shares of RM1.00 each, and 5,000,000 ordinary shares of RM1.00 each have been issued and fully paid-up.
2.2 Financial Information on the Property
Based on audited accounts for the financial year ended 31 December 2005, the net book value (NBV) of the Property was RM4,200,000.
The value of the sale consideration of RM4.4 million was arrived at on a willing buyer and willing seller basis, after taking into consideration the NBV of the Property as set out in Table 1 herein and the open market value of the Property of RM4,350,000 as appraised by an independent registered valuer, Messrs. Raine & Horne International Zaki + Partners Sdn Bhd on 22 February 2006 based on the Comparison Method of Valuation.
By way of background, Bursa had in 2004 appointed an independent real estate agent ("agent") to seek prospective buyer(s) for the Property. Based on the agent's best efforts, the only offer received for the Property was RM4.3 million with a 2% commission payable to the agent. Subsequent to this, Bursa received the offer by HESB which is the highest offer received for the Property.
2.4 Terms of PaymentBy way of background, Bursa had in 2004 appointed an independent real estate agent ("agent") to seek prospective buyer(s) for the Property. Based on the agent's best efforts, the only offer received for the Property was RM4.3 million with a 2% commission payable to the agent. Subsequent to this, Bursa received the offer by HESB which is the highest offer received for the Property.
The sale consideration for the Proposed Disposal is payable as follows:
(a) Ten per centum (10%) upon the execution of the SPA; and (b) Ninety per centum (90%) within 6 months from the date of the SPA.3. Rationale for the Proposed Disposal
The Property is currently untenanted.
The Proposed Disposal is more cost effective as compared to further investment on the Property to make it more tenantable for renting.
4. Effects of the Proposed Disposal
4.1 Share capital and substantial shareholders' shareholdings
The Proposed Disposal will not have any effect on the share capital and substantial shareholding structure of Bursa.
4.2 Net Tangible Assets ("NTA") and Net Assets
The Proposed Disposal is not expected to have any material effect on the consolidated net assets and NTA of Bursa.
4.3 Earnings
The Proposed Disposal is not expected to have any material effect on the earnings of Bursa Group.
The Proposed Disposal is expected to result in a gain of RM200,000 for Bursa Group for the financial year ending 31 December 2006 as elaborated in Table 1 herein.
5. Original Cost of Investment
The Property is an 8 storey office building which includes 2 car park levels on the 1st and 2nd Floors. Ground to 4th Floors were purchased in September 1994 and 5th to 7th Floors were purchased in October 1997 at a total cost of RM9,451,593.
Details of the Property are set out in Table 2 herein.
Details of the Property are set out in Table 2 herein.
6. Approvals required
The Proposed Disposal does not require approval of any relevant government authorities and shareholders of Bursa.
7. Major Shareholders' and Directors' Interest
Dato' Seri Hwang Sing Lue is a director and shareholder of Bursa who holds 100,000 ordinary shares of RM0.50 each representing 0.02% of the total issued shares in Bursa. He is also a director and substantial shareholder of HESB, which holds 2,550,000 ordinary shares of RM1.00 each representing 51% of the total issued shares in HESB. He has abstained from the deliberation and approval by the Board of Bursa in respect of the Proposed Disposal.
Save as disclosed above, none of Bursa's Directors and/or major shareholders and/or persons connected with Bursa's Directors and/or major shareholders have any interest, direct or indirect, in the Proposed Disposal.
Save as disclosed above, none of Bursa's Directors and/or major shareholders and/or persons connected with Bursa's Directors and/or major shareholders have any interest, direct or indirect, in the Proposed Disposal.
8. Statement by the Directors
After considering all aspects of the Proposed Disposal including the recommendation of the Audit Committee, Bursa's Board of Directors (excluding Dato' Seri Hwang Sing Lue who abstained from the board deliberation and voting) is of the opinion that the Proposed Disposal is in the best interest of Bursa.
9. Expected Date of Completion
Barring any unforeseen circumstances, the Proposed Disposal is expected to be completed by the third quarter of 2006.
10. Compliance with the Securities Commission's Policies and Guidelines on Issue/Offer of SecuritiesTo the best of the knowledge of the Board of Directors of Bursa, the Proposed Disposal has not departed from the Securities Commission's Policies and Guidelines on Issue/Offer of Securities.
This announcement is dated 3 March 2006.
Table 1
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|
RM
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Purchase Cost |
9,451,593
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|
Less
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Accumulated Depreciation and Impairment Loss |
5,251,593
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Net Book Value as at 31 December 2005 |
4,200,000
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Less
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Disposal Price |
4,400,000
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|
Net Profit on Disposal |
200,000
|
Table 2
| No. | |
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Description of Property |
| 1. | Postal Address | : | 43, Green Hall, Georgetown, 10200 Pulau Pinang |
| 2. | Title | : | Grant First Grade No. 17375/M1/1/1, M1/1/2, M1/2/1*, M1/4/1, M1/5/1, M1/6/1, M1/7/1 and M1/8/1, Building No. M1, Parent Lot No. 000782, Section 19, Town of Georgetown, District of Timur Laut, Pulau Pinang *together with Accessory Parcel No. AM1 |
| 3. | Land Area/ Net Floor Area |
: | 1,085 / 3,561 square meters |
| 4. | Existing Use | : | Vacant office building |
| 5. | Age of Building | : | 21 years |
| 6. | Tenure | : | Freehold |
| 7. | Valuation | : | A valuation was conducted by Messrs. Raine & Horne International Zaki + Partners Sdn Bhd on 22 February 2006. Based on the Comparison Method of Valuation, the Property was appraised to have an open market value of RM4,350,000 |
| 8. | Net book value | : | RM 4,200,000 |
| 9. | Encumbrances | : | Nil |