News

1.       INTRODUCTION

The Board of Directors of PMCB wishes to announce that PAC (the “Purchaser”), a 35%-owned investee of PTSB, has on 7 February 2017 entered into a Sale and Purchase Agreement (the “SPA”) with THE PENANG DEVELOPMENT CORPORATION (the “Vendor”) for the acquisition of a piece of land as detailed in Section 4.1 of the SPA (the “Property”) at a total consideration of Ringgit Malaysia Three Million Five Hundred and Twenty Thousand Seven Hundred and Sixty Three and Sen Twenty (RM3,520,763.20) only (the “Purchase Price”) [the “Acquisition”].

2.       BACKGROUND INFORMATION

2.1     Information on PAC      

PAC was incorporated in Malaysia as a private limited company under the Companies Act, 1965 on June 24, 2016. PTSB has on January 16, 2017 entered into a Joint Venture Shareholders’ Agreement (the “Agreement”) with Vitrox Corporation Berhad (Company No 649966-K) ("VCB") and Walta Engineering Sdn Bhd (Company No 270199-T) (“WESB”) to establish a Joint Venture Company through PAC wherein PTSB, VCB and WESB will subscribe 35%, 35% and 30% of the issued and paid up capital of PAC respectively (the “JV”).

PAC’s principal activities are providing Technological Design, Research, Value Added Engineering Development, Metrology Shared Services, 3-D prototyping, Smart Manufacturing System and Technical Training to the Automation Cluster Companies specialized in the area of Design, Development and manufacture of high precision metal fabrication components, modules and systems for semiconductor, electronics, automotive, aerospace and other high growth industries in the region.

As at the date of the announcement, PAC has a share capital of RM3,000,000.00. The existing directors and shareholders of PAC are as follows:-

Directors

1. Chu Jenn Weng

2. Chuah Choon Bin; and

3. Goh Kheng Sneah.

Shareholders and shareholdings

a. PTSB (35%);

b. VCB (35%); and

c. WESB (30%)

2.2     Information on VCB

VCB was incorporated in Malaysia on 22 April 2004 under the Companies Act, 1965 as a private limited company under the name of ViTrox Corporation Sdn Bhd. On 24 June 2004, it was converted into a public limited company and adopted its present name. VCB is a company listed on the Main Market of Bursa Malaysia Securities Berhad. As at the date of the announcement, VCB has a share capital of RM23,475,795.

VCB is principally involved in investment holding and development of 3D and line scan vision inspection system.

The Directors of VCB are Dato’ Seri Dr. Kiew Kwong Sen, Chu Jenn Weng, Siaw Kok Tong, Yeoh Shih Hoong, Chuah Poay Ngee, Prof. Ir. Dr. Ahmad Fadzil Bin Mohamad Hani and Chang Mun Kee.

Website: www.vitrox.com

2.3     Information on the WESB

WESB was incorporated in Malaysia on July 16, 1993 under the Companies Act, 1965 as a private limited company under its present name. As at the date of the announcement, WESB has a share capital of RM4,900,000.

WESB is principally engaged in the manufacturing of machinery, equipment and tester and fabrication of machinery parts, tools and dies.

The Directors and Shareholders of WESB are Goh Kheng Sneah and Liong Swee Yen.

Website: www.walta.com.my

2.4     Information on the Vendor

THE PENANG DEVELOPMENT CORPORATION, is a body corporate incorporated under the Penang Development Corporation Enactment, 1971 and having its office at Bangunan Tun Dr Lim Chong Eu, No 1 Pesiaran Mahsuri, Bandar Bayan Baru, 11909 Bayan Lepas, Penang.

The Vendor was establised with the following objectives:-

1. To spearhead Penang’s socio-economic development
2. To assist in eradicating poverty and creating employment opportunities
3. To improve the quality of life for the people of Penang

The core activities of the Vendor, a self-funding statutory, are:-

1. Land Development
2. Investment
3. Entrepreneur Development

Please refer the official website of the Vendor for details http://www.pdc.gov.my/index.php/English/corporate-profile

3.       INFORMATION ON THE JV

3.1     Rationale for the JV

The purposes of JV are:-

1. To build the local supply chain ecosystem

2. To fund the development

3. To manage the supply chain ecosystem

In view of the above and pursuant to the Agreement, PAC is to acquire the Property solely for the purpose of developing and managing a small medium industry cluster which include the activity of precision engineering and sheet metal fabrication, tooling, machining, finishing and coating services to be carried out by the Purchaser and/or its tenants (as the case may be) [“Automation Cluster”] and as approved by the Department of Environment, Ministry of Natural Resources and Environment Malaysia.

The JV will enable PMCB to build a robust and reliable supply chain ecosystem in the country that supports PMCB’s long-term strategy to grow its business in providing a wider range of high-end automated equipment supporting various industries globally.

The Automation Cluster is expected to commence construction in 2nd half of 2017 and span over a development period of within two years. As at the date of the announcement, no development approvals have been obtained for the Automation Cluster and PAC estimated an investment value of RM23 million for the Automation Cluster. The Automation Cluster is still in its initial planning stage and therefore, the above information is preliminary at this juncture and may be subject to further refinement.

3.2.    Salient Terms of the Agreement

3.2.1  Equity structure

Unless agreed by PTSB, VCB and WESB (“JV Parties”) in writing, the total issued and paid up share capital of PAC shall as the Completion Date and at all times herein be held by the JV Parties in the following proportions:

3.2.2  Termination and winding-up

Except for the provisions in the Agreement which shall continue in full force after termination, the Agreement shall terminate:

(a)      when, as a result of transfers of shares made in accordance with the Agreement or the Articles of Association of PAC, only one JV Party remains as legal and beneficial holder of the shares in PAC; or

(b)      when a resolution is passed by shareholders or creditors, or an order made by a court or other competent body or person instituting a process that shall lead to PAC being wound up and its assets being distributed among the PAC's creditors, shareholders or other contributors; or

(c)      the termination of the SPA for whatsoever reason.

4.       DETAILS OF THE ACQUISITION

4.1     Information on the Property

The Property is known as all that piece of land situated in Daerah Seberang Perai Selatan and forming part of Mukim 13, Seberang Perai Selatan the site whereof is marked Plot SV61 Batu Kawan Industrial Park and delineated and edged in red and marked “A” on the plan annexed in the SPA and containing an area of 5.0516 acres. The said Property is at present vested in the State Authority of Penang (“the State Authority”). The Property is to be alienated by the State Authority to the Vendor in accordance with the National Land Code, 1965 (‘the NLC’) for a term of thirty (30) years under Qualified Title and ultimately to be held under a State Lease subject to the category of land use, the express conditions and the restrictions in interest as shall be imposed by the relevant authorities and the Property and any building erected thereon shall be used only for ‘developing and managing the Automation Cluster and to carry out all its obligations under the SPA which include the activity of precision engineering and sheet metal fabrication, tooling, machining, finishing and coating services to be carried out by the Purchaser and/or its tenants (as the case may be) and as approved by the Department of Environment, Ministry of Natural Resources and Environment Malaysia.’ (the “Land Use”).

Pursuant to the SPA, the Property is to be acquired upon such alienation free from all encumbrances on an ‘as is where is basis’ save and except for the earthworks as described in Clause 10.2 of the SPA as backfilling of the Property up to 2.23 metres (“the Earthworks”) and provisions of infrastructure i.e. provision of roads, drainage and sewerage servicing the Property and water, electricity and telecommunication mains for connection to the Property for the benefit of the Property (“the Infrastructure”), and with legal possession but subject to the category of land use, the express conditions and the restrictions in interest as shall be imposed by the relevant authorities, all conditions and restrictions implied by the NLC and upon the terms and conditions of the SPA.

PAC is unable to provide the information on Net Book Value of the Property as PAC is not privy to this information.

5.       APPROVALS REQUIRED

The JV was not subject to approval from the shareholders of PMCB and/or any regulatory authority(ies). The JV also was not conditional upon any other corporate proposals undertaken or to be undertaken by PMCB.

Save for the State Authority for the alienation of the Property to the Vendor, the Acquisition is not subject to approval being obtained from the shareholders of PMCB and/or any regulatory authority(ies).

6.       MAJOR SHAREHOLDERS’ AND DIRECTORS’ INTERESTS

To the best of the knowledge of the Board of Directors of PMCB, none of the Directors and/or major shareholders of PMCB, or persons connected to them, has any interest, direct or indirect:-

a) in the JV; and

b) in the Acquisition.

7.       DIRECTORS’ STATEMENT

The Board of Directors of PMCB is of the opinion that the JV is in the best interest of the PMCB Group.

8.       ESTIMATED TIMEFRAME FOR COMPLETION

The JV is expected to be completed within 12 months period from the date of Agreement. The Acquisition is expected to be completed within 12 months period from the date of SPA.

This announcement is dated 7 February 2017.