announcement : 9 October 2009
Type : Announcement
Subject : Purchase of Leasehold Land by San Soon Seng Food Industries Sdn. Bhd. (179092-H), a wholly-owned subsidiary of Three-A Resources Berhad (481559-M) from Excellent Chemicals Industrial Sdn. Bhd. (154612-P)
content :

The Board of Directors of Three-A Resources Berhad ("3-A") wishes to inform the Exchange that its wholly owned subsidiary, San Soon Seng Food Industries Sdn. Bhd.(179092-H) (hereinafter referred to as "Purchaser") had on 9 October 2009 entered into a Sale and Purchase Agreement with Excellent Chemicals Industrial Sdn. Bhd. (154612-P) (hereinafter referred to as "Vendor") to acquire all that piece of land held under Title No. H.S(M) 9107 for PT No. 27686 Batu 14, Jalan Kuala Selangor, in the Mukim of Sungai Buloh, Daerah Petaling, Negeri Selangor Darul Ehsan comprising an area of approximately 5,606 sq metres together with a factory building erected thereon at a total consideration of RM2,400,000.00 free from encumbrances upon the terms and conditions as stipulated in the Sale and Purchase Agreement ("Proposed Purchase")

Details of the Proposed Purchase:-

The Vendor was incorporated in Malaysia on 16 July 1986 with an authorised capital of RM1,000,000.00 and an issued and paid up share captial of RM840,000.00 divided into 840,000 ordinary shares of RM1.00 each. The current directors of the Company are as follows:-

    Name of Directors:
  • Fang Chew Ham
  • Foong Chiew Fatt
  • Fong Chew Hean
  • Fong Chu King @ Tong Chu King
  • Tam Seng Yap
  • Dato' Mohd Nor Bin Abdul Wahid
  • Foong Peng Yew
  • Chooi Wei Mun

The Company owns all that piece of leasehold land with a factory building erected thereon. The said leasehold land is currently chaged to United Overseas Bank (Malaysia) Berhad ("the Existing Chargee") registered on 29 March 2007. There is a private caveat lodged by United Overseas Bank (Malaysia) Berhad on 25 January 2007

Annoucement Details :

Details of the Leasehold Land:

the Leasehold land held by the Vendor are set out as follows:-

Location:Title No. H.S.(M) 9107 for PT No. 27686, Batu 14, Jalan Kuala Selangor in the Mukim of Sungai Buloh, Daerah Petaling, Negeri Selangor Darul Ehsan
Tenure:Leasehold interest for a term of 99 years, expiring on 22 September 2093
Date of Purchase by Vendor:23 September 1994
Original Purchase Cost by Vendor:RM2,000,000.00
Net Book Value as at 31.12.2008:RM2,114,222.20 (based on latest audited statement)
Land Area:5,606 sq metres
Market Valuation:RM2,400,000.00
Purchase Price Payable by Purchaser:RM2,400,000.00

Purchaser
The Purchaser was incorporated in Malaysia on 27 February 1989 with an authorised capital of RM5,000,000.00 and an issued and paid up capital of RM3,200,000 comprising of 3,200,000 ordinary shares of RM1.00 each. The principal activity of the Purchaser is in the manufacturing and selling of food and beverage ingredients.

Basis of Arriving at the Purchase Consideration and Source of Fund
The purchase consideration of RM2,400,000.00 was arrived at on a "willing buyer willing seller" basis after taking into consideration the market value of the said land with reference to the valuation carried out by an independent property valuer, JS Valuers Property Consultants Sdn. Bhd. on 6 August 2009 on the said land.

The purchase consideration shall be financed through internally generated funds and/or bank borrowings.

Rationale of the Purchase
The Purchaser has entered into tenancy agreements with the Vendor for the said leasehold land since 1 July 2007. The purchase of the said leasehold land is necessary for the operations of the Purchaser. Furthermore, the Purchaser would be able to enjoy the gross rental savings of approximately RM150,000.00 per annum.

Salient Features of the Proposed Purchase
The Land shall be purchased free from encumbrances and with vacant possession.

A sum of RM240,000 as deposit and earnest money representing 10% of the purchase consideration shall, upon the execution of the Sale and Purchase Agreement, be deposited to Messrs. Soo Thien Ming & Nashrah, Advocate and Solicitors as stakeholder.

The balance sum of RM2,160,000.00 shall be paid in the manner as described in the Agreement upon the fulfillment of the conditions precedent.

The loan relating to the said Land shall be settled and that the said charge over the Land shall be discharged. The caveat created on the said land shall also be withdrawn.

Conditions Precedent
The Vendor shall cause and pay the Existing Chargee of the said Land such amount as might be owing ("Redemption Sum") in order to obtain the Issue Document of Title, Duplicate Charge, Withdrawal of Caveat and Discharge of Charge in respect of the said Land.

Risk Factors
The Board of Directors is not aware of any specific risk / risk factors arising from the Proposed Purchase other than the normal and market risks

Financial Effects of the Proposed Purchase | Share Capital and Substantial Shareholder
The Proposed Purchase will not have any effect on 3-A's share capital and its substantial shareholdings as the Proposed Purchase will be satisfied entirely by cash.

Net Assets and Gearing
The Proposed Purchase is not expected to have a material impact on the net assets and gearing of the 3-A Group.

Earnings
The Proposed Purchase is not expected to have any material impact on the earnings of 3-A Group for the financial year ending 31 December 2009. However, the Proposed Purchase will contribute positively to the Group's future earnings prospect.

Estimated Time Frame of Completion
Barring unforeseen circumstances, the Proposed Purchase is expected to be completed by within three months from date of the Sale and Purchase Agreement.

Particulars of All Liabilities including Contingent Liabilities to be assumed by the Company arising from the aforesaid Purchase
There is no liability including contingent liabilities to be assumed by the Group, arising from the said Proposed Purchase.

The Nature and Extent of the Interests of the Interested Directors and/or Major Shareholders
Fang Chew Ham, Foong Chiew Fatt, Fong Chiew Hean, Fong Chu King @ Tong Chu King and Dato' Mohd Nor Bin Abdul Wahid are Directors in San Soon Seng Food Industries Sdn. Bhd.and 3-A. They, who are major shareholders of 3-A are also substantial shareholders of Excellent Chemical Industrial Sdn. Bhd.

Fang Siew Yee and Fang Siew Ping, who are Directors of 3-A are deemed interested as they are the daughters of Fang Chew Ham. Liew Kuo Shin who is a Director of 3-A, is deemed interested as he is the son-in-law of Fang Chew Ham.

Pursuant to Part E Paragraph 10.08 of the Main Market Listing Requirements of Bursa Malaysia Securities Berhad and in view of the interest of certain Directors and major Shareholders of 3-A , the Proposed Purchase constitutes a related party transaction under the Listing Requirements. However, the said purchase of land is not subject to the approval of the shareholders as the materiality of the Transaction is less than 5% of the percentage ratio threshold while only immediate announcement is required.

Save as disclosed above, none of the other Directors or major shareholders or persons connected wth them has any interest, direct or indirect, in the Proposed Purchase. In addition, all the abovenamed interested Directors have abstained from the Board's deliberation and voting in relation to the Proposed Purchase in the Board Meeting of San Soon Seng Food Industries Sdn. Bhd.

Approval Required
Pursuant to Chpt. 10 Part E of the Main Market Listing Requirements of Bursa Malaysia Securities Berhad, the Proposed Purchase is not subject to the approval of shareholders as it falls below the 5% of the pecentage ratios. The highest percentage ratio for the Proposed Purchase is 3.01%.

Departure from the Securities Commission's Policies and Guidelines on Issue / Offer of Securities
To the best knowledge of the Board, the Proposed Purchase has not departed from the Securities Commission's Policies and Guidelines on Issue / Offer of Securities.

Statement by Directors
The Directors of 3-A are of the opinion that the Proposed Purchase is in the best and long term interests of 3-A Group and its shareholders.

Statement by Directors
The Directors of 3-A are of the opinion that the Proposed Purchase is in the best and long term interests of 3-A Group and its shareholders.

The Proposed Purchase is fair, reasonable and on normal commercial terms and are not detrimental to the interest of the minority shareholders.

This Proposed Purchase is the only transaction transacted by the Group with the Vendor during the 12 months' period save for the payment of monthly rental to the said Vendor for the renting of the said Land.

Statement by Audit Committee
The Audit Committee of 3-A, having seen and reviewed the procedures implemented in the treatment of the Proposed Purchase, are satisfied that the procedures are sufficient to ensure that the Proposed Purchase is:-

  • conducted at arms' length, fair and reasonable and on normal commercial terms; and are not to the detriment of minority shareholders.

Documents for Inspection
The Sale and Purchase Agreement is available for inspection at the registered office of the Company at AL 308, Lot 590 & Lot 4196 Jalan Industri U19, Kampung Baru Seri Sungai Buloh, 47400 Selngor Darul Ehsan, Malaysia during normal business hours for the period of fourteen days from the date of this announcement

 

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