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Bursa Announcement

Bursa Announcement

Date : 03 March 2011

TRANSACTIONS (CHAPTER 10 OF LISTING REQUIREMENTS): RELATED PARTY TRANSACTIONS

AEON CO. (M) BHD

TypeAnnouncement
SubjectTRANSACTIONS (CHAPTER 10 OF LISTING REQUIREMENTS)
RELATED PARTY TRANSACTIONS
DescriptionAEON CO. (M) BHD. (“AEON CO.” or "the Company")- Related party transaction pursuant to Paragraph 10.08 of the Main Market Listing Requirements of Bursa Malaysia Securities Berhad

i) SALE OF THE COMPANY’S EXISTING AMUSEMENT BUSINESS NAMED SMART WONDER WORLD TO AEON FANTASY (MALAYSIA) SDN. BHD. (“SALE”)

ii) SUBSCRIPTION OF AEON FANTASY (MALAYSIA) SDN. BHD.’S SHARES (“SUBSCRIPTION”)
Reference is made to the announcement on 25 February 2011 on the subject matter, please refer to the following additional information:
    1. The proposed sale consideration for the sale of amusement business named Smart Wonder World (“SWW”) by the Company of Ringgit Malaysia Twenty Two Million Four Hundred Thousand (RM22,400,000.00) only is arrived at on willing buyer willing seller basis and will be satisfied by cash, after taking into consideration of the following:
        (a) valuation of SWW conducted by Covenant Equity Consulting Sdn Bhd, a Capital Market Services License holder on 14 January 2011 of RM21.03 million based on earnings multiple methodology, i.e. the recent price earnings multiple of AEON CO. of 12.3 times over the net earnings of SWW of approximately RM1.7 million, based on the management accounts of SWW for the financial period ended 31 December 2010; and

        (b) the future prospects and earnings potential of SWW.

    2. The proposed sale consideration of RM22.4 million will be paid by AEON Fantasy (Malaysia) Sdn Bhd (“AFMSB”) to AEON CO. in full by way of one lump sum on 25th August 2011 when not less than nine (9) of the existing SWW stores have been transferred to AFMSB. In the event there are less than nine (9) SWW stores have been transferred to AFMSB on 25th August 2011, AFMSB shall be entitled to extend the payment date to 25th February 2012 (“Proposed Completion”).

    3. Breakdown of the utilization of the proceeds from the Sale are as follows:

    RM’ million
    Investment in AFMSB 7.4
    Working Capital for AEON CO. 15.0
    Total 22.4
        The proceeds will be utilised within 12 months from the date of the Proposed Completion.

    4. The Directors of AFMSB are Mr Nao Kataoka, Ms Chong Swee Ying, Mr Nobuyuki Fujiwara, Mr Masaaki Miyamoto, Ms Mitsuko Tsuchiya, Datin Yasmin Ahmad Merican, Ms Tai Yit Chan and Ms Liew Irene.
        The present shareholders of AFMSB are Ms Tai Yit Chan (shareholding of 8 ordinary shares of RM1.00 each (80%)) and Ms Liew Irene (shareholding of 2 ordinary shares of RM1.00 each (20%)). The total paid-up share capital is 10 ordinary shares of RM1.00 each.

        Following the Subscription, the shareholders and their respective shareholdings in AFMSB will be as follows:

        AEON CO.: 20% (7,400,000 ordinary shares of RM1.00 each)
        AEON Fantasy Co., LTD (“AFCL”): 80% (29,600,000 ordinary shares of RM1.00 each)
        Total enlarged share capital: 100% (37,000,000 ordinary shares of RM1.00 each)

        Upon completion of the Subscription, AFMSB will become on associate company of AEON CO. and become 80% owned subsidiary of AFCL of which AFCL is a fellow subsidiary of AEON CO..

        AEON Co., Ltd is the holding company of AEON CO. and AFCL.
    5. Pursuant to the Subscription entered between AFCL, AFMSB and AEON CO., the Company shall be entitled to issue the subscription notice to subscribe twenty percent (20%) of the total issued subscription shares of AFMSB amounting to 7,400,000 ordinary shares of RM1.00 each in the share capital of AFMSB at par for a total cash consideration of Ringgit Malaysia Seven Million and Four Hundred Thousand (RM7,400,000.00) only and the said Subscription will be made upon payment in three (3) tranches i.e. first tranche (3rd March 2011), second tranche (2nd May 2011) and third tranche (10th August 2011) respectively.
      6. Mr Jerome Thomas Black, Mr Nagahisa Oyama, Mr Naoki Hayashi and Mr Kenichi Hirao are the key employees of AEON Co., Ltd. and persons connected to AEON Co., Ltd.. Dato’ Abdullah bin Mohd Yusof is deemed interested in the Sale and Subscription by virtue of his wife being a director in AFMSB. Therefore, Mr Jerome Thomas Black, Mr Nagahisa Oyama, Mr Naoki Hayashi, Mr Kenichi Hirao and Dato’ Abdullah bin Mohd Yusof are deemed interested in the Sale and Subscription (collectively referred to as “Interested Directors”).
          Accordingly, the Interested Directors have and will continue to abstain from all deliberations and voting on the resolution(s) for the Sale and Subscription at Board Meetings.

          Save as disclosed above, and to the best of the Company’s knowledge, none of the other Directors, and/or major shareholder of the Company and/or persons connected with them, have any interest, directly and/or indirectly, in the Sale and Subscription.
      7. Save for Mr Jerome Thomas Black, Mr Nagahisa Oyama, Mr Naoki Hayashi, Mr Kenichi Hirao and Dato’ Abdullah bin Mohd Yusof, the Board of Directors of the Company, having considered all aspects of the Sale and Subscription, is of the opinion that the Sale and Subscription are fair and reasonable and in the best interest of the Company.
      8. The necessary approvals for the Sale Agreement are as follows:
          (a) the approval of the shareholders of AFMSB at the annual general meeting or the extraordinary general meeting to be convened, if required;

          (b) the approval of the shareholders of the Company at the annual general meeting or the extraordinary general meeting to be convened, if required;

          (c) the approval of the Ministry of Domestic Trade Cooperatives and Consumerism, if required;

          (d) the approval of all parties, including without limitation to lenders of AEON CO. and landlords of the stores for the sale and purchase of the SWW , if required;

          (e) the approval of the relevant licensing authorities for the issuance of the entertainment or other operating licence for each of the stores;

          (f) the execution of the tenancy agreements for each store with the Store Unconditional Date as the commencement date (the Store Unconditional Date shall be defined as the date when all the Conditions Precedent stated in the Sale Agreement has been fulfilled for that particular store); and

          (g) such other relevant approval required for this Sale Agreement.
      9. The Sale and Subscription does not require the Company’s shareholders’ approval.
      10. A copy each of the Sale Agreement, Subscription Agreement and Valuation Report are available for inspection during normal office hours of the Company from Monday to Friday (except public holidays) at the registered address of the Company at Level 3, JUSCO Taman Maluri Shopping Centre, Jalan Jejaka, Taman Maluri, Cheras, 55100 Kuala Lumpur for a period of 3 months from the date of announcement on 25 February 2011.

    Announcement Info

    Company NameAEON CO. (M) BHD  
    Stock Name AEON    
    Date Announced3 Mar 2011  
    CategoryGeneral Announcement
    Reference NoCC-110303-59983

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