Bursa Announcement

1. INTRODUCTION

The Board of Directors of AEON (“Board”) is pleased to announce that the Company has on 26 December 2014 entered into a Sale and Purchase Agreement (“SPA”) with Ireka Engineering & Construction Sdn. Bhd. (Company No. 381566-U) having its registered office at Level 18, Wisma Mont’ Kiara, No 1, Jalan Kiara, Mont’ Kiara, 50480 Kuala Lumpur, Wilayah Persekutuan (“Vendor”) in respect of the acquisition of a part of freehold land held under H.S.(D) 64701, Lot PT 10334, Pekan Senawang, Daerah Seremban, Negeri Sembilan measuring approximately 84,498.36 square meters or 20.88 acres (“Sale Property”) at a purchase price of Ringgit Malaysia Fifty Three Million Six Hundred and Sixty Two Thousand Four Hundred Thirty Five and Sen Twenty (RM53,662,435.20) Only (“Purchase Price”) for the purpose of contructing and operating a shopping centre with car parks and departmental stores cum supermarket (“Complex”) in accordance with all the terms and conditions as stipulated in the SPA (“Acquisition”).

2. THE ACQUISITION

2.1  Information on the Sale Property

(a)  Ong Poh Lan (NRIC No. 350702-04-5028) (“Land Owner”) is the registered land owner of the freehold land held under H.S.(D) 64701, Lot PT 10334, Pekan Senawang, Daerah Seremban, Negeri Sembilan measuring approximately 215,500 square meters or 2,319,642 square feet or 53.25 acres (“Development Land”).

(b)  The Vendor has entered into an agreement to acquire part of the Development Land from the Land Owner measuring approximately 84,498.36 square meters or 909,532.8 square feet or 20.88 acres (“Shopping Centre Land”) via a Sale and Purchase Agreement entered into between the Land Owner and the Vendor dated 26th December 2014.

(c)  The Vendor shall, at its own cost and expense, apply for and obtain the necessary approval from the relevant authorities for the surrender, subdivision and re-alienation of the Development Land (“Surrender and Re-alienation”) in accordance with the master layout including amendments thereto as may be approved by the relevant authorities from time to time (“Master Layout Plan”) and procure the issuance of a separate document of title measuring approximately 84,498.36 square meters or 909,532.8 square feet or 20.88 acres with the land use of “building” or its equivalent with an express condition of “Commercial Building – Shopping Centre” or other appropriate description as approved by the relevant authorities to allow the construction and operation of the Complex on the Shopping Centre Land.

(d)  The Vendor is desirous of selling the Shopping Centre Land, subject to the final survey measurement of the size of the Shopping Centre Land which shall exclude the external perimeter drains outside the new boundary of the Shopping Centre Land and to be stated in the new separate document of freehold title after the Surrender and Re-alienation to the Company, and the Company is desirous of purchasing the Shopping Centre Land.

(e)  The Vendor and the Company have mutually agreed to enter into a SPA for the purpose of the sale of the Shopping Centre Land to the Company free from all encumbrances, caveats, liens and other restraints with vacant possession but otherwise subject to all the conditions whether express or implied and restrictions-in-interest endorsed on the separate document of title upon issuance of the same and upon the terms and conditions stipulated in the SPA.

(f)  The Vendor and the Company have also agreed concurrent with the execution of the SPA enter into a Construction Agreement (“Construction Agreement”), for the purpose of appointing the Vendor, at the Company’s costs and expenses, to construct a Complex on the Shopping Centre Land. The construction of the Complex shall be in accordance with the terms and conditions of the Construction Agreement.

 2.2  Basis of arriving at the purchase consideration

The purchase consideration for the Acquisition amounting to Ringgit Malaysia Fifty Three Million Six Hundred and Sixty Two Thousand Four Hundred And Thirty Five and Sen Twenty (RM53,662,435.20 ) Only (“Purchase Price”) is arrived at a rate of Ringgit Malaysia Fifty Nine (RM59.00) Only per square foot based on an estimated total area of 84,498.36 square meters or 909,532.8 square feet or 20.88 acres of the Sale Property which was arrived on a “willing-buyer willing-seller basis in an arm’s-length transaction after taking into consideration the potential development of the Sale Property, the costs of infrastructure works, roadworks and earthworks, the range of market values for similar lands in the vicinity and the valuation carried out by the Company’s valuer, Henry& Butcher Malaysia (NS) Sdn Bhd on 4^th March 2013 which adopted the Comparison Method. The company is not able to disclose the net book value of the Sale Property as the said net book value is not made to known to the Company. The Acquisition will be fully satisfied by cash and finances through the Company’s internal generated funds.

2.3  Assumption of liabilities including contingent liabilities and guarantees

The Company will not be assuming any liabilities including contingent liabilities and guarantees pursuant to the Acquisition.

2.4 Salient terms and conditions of SPA

The salient terms and conditions of the SPA among others are as follows:-

2.4.1  The Sale and Purchase of the Shopping Centre Land shall be subject to and conditional upon the fulfillment of the following conditions precedent (“Conditions Precedent”) within fifteen (15) months from the date of SPA (“Conditional Period”) and shall be automatically renewed for another three (3) months upon expiry of the Conditional Period (“Renewed Period”) or such other extended date as may be mutually agreed by the parties:-

(a) The Vendor shall, at its own cost and expense, procure the execution of the Memorandum of Transfer (“MOT”) from the Landowner for the transfer of the Shopping Centre Land to the Company;

(b) The Vendor shall, at its own cost and expense, obtain the approval from the relevant authorities for the surrender and re-alienation of the Development Land for the purposes of the issuance of a separate document of freehold title of the Shopping Centre Land with the land use of “building” or its equivalent with an express condition of “Commercial Building – Shopping Centre” or other appropriate description as approved by the relevant authorities to allow the construction and operation of the Complex;

(c) The Vendor shall, at its own cost and expense, obtain the Master Planning Approval from the relevant authorities for the development of the Complex on the Shopping Centre Land and Infrastructure to be erected on the Shopping Centre Land (“Master Planning Approval”);

(d) The Vendor shall, at its own cost and expense, obtain the Planning Approval/ Development Order Approval (“Kebenaran Merancang”) for the development of the Complex and all the external Infrastructure to be erected outside of the boundary of the Shopping Centre Land including the ingress and egress points to and from the Shopping Centre Land, road upgrading, installation and commissioning of the traffic light junctions and traffic circulation (“Planning Approval/Development Order”);

(e) The Vendor shall, at its own cost and expense, obtain the necessary approvals from the relevant authorities for the construction of the roadworks, ingress and egress points and traffic light junctions ("Roadworks");

(f) The Vendor shall, at its own cost and expense, obtain the approvals from the relevant authorities of the earthwork and Infrastructure and Roadworks of the Shopping Centre Land (“Earthwork Approval and Infrastructure Approval”);

(g) The Vendor shall, at its own cost and expense, obtain the approval from the relevant authorities for the transfer of the Shopping Centre Land to the Company, if applicable (“State Authority’s Approval”);

(h) The Company shall, at its own cost and expense, obtain the approval for the Building Plan Approval from the relevant authorities for the construction of the Complex based on the Company’s building specifications and design (“Building Plan Approval”);

(i) The Company shall, at its own cost and expense, apply for and obtain the approval of the Economic Planning Unit, Prime Minister Department for the acquisition of the Shopping Centre Land in accordance with the terms of the SPA (“EPU Approval”);

(j) The Company shall, at its own cost and expense, obtain the approval of the Distributive Trade Committee of the Ministry of Domestic Trade, Cooperative and Consumerism for the operation of the Complex as a departmental store cum supermarket on the Shopping Centre Land (“DTC Approval”);

(k) The Company shall, at its own costs and expenses, apply for and obtain the approval of the State Authority for the acquisition of the Shopping Centre Land in accordance with the terms of the SPA under Section 433(B) of the National Land Code 1965 (“State Authority 433B Transfer Approval”);

(l) The Vendor is an effective 100% owned company of Ireka Corporation Berhad (Company No.25882-A) (“Parent Company”). The Vendor’s Parent Company shall obtain the approval of its shareholders at an extraordinary general meeting within four (4) months upon execution of this Agreement to enable the Vendor to enter into and complete the SPA pursuant to the terms hereto.

2.4.2   The Company shall pay the Purchase Price in the following manners, which the events  referred to hereunder are not set out in chronological order and may be fulfilled in any order or manner:-