Bursa Announcements

Date : 17 July 2013

TRANSACTIONS (CHAPTER 10 OF LISTING REQUIREMENTS): NON RELATED PARTY TRANSACTIONS AEON CO. (M) BHD. ("AEON" OR "COMPANY") - Acquisition of Land

AEON CO. (M) BHD

TypeAnnouncement
SubjectTRANSACTIONS (CHAPTER 10 OF LISTING REQUIREMENTS)
NON RELATED PARTY TRANSACTIONS
DescriptionAEON CO. (M) BHD. ("AEON" OR "COMPANY")
- Acquisition of Land
1. INTRODUCTION
      The Board of Directors of AEON (“Board”) is pleased to announce that the Company has on 17 July 2013 entered into a Sale and Purchase Agreement (“Agreement”) with JOHOR LAND BERHAD (Company No. 12379-K) having its registered address at Suite 12B, Level 12, Menara Ansar, No. 65, Jalan Trus, 80000 Johor Bahru, Johor (“Vendor”) in respect of the acquisition of a freehold land with land use stated as “Building-Commercial Shopping Centre” measuring approximately 20.93 acres or 911,710.80 square feet (“Shopping Centre Land”) upon the issuance of a new separate documents of freehold title for the Shopping Centre Land which shall be procured by the Vendor at its own cost and expense after the application for the surrender and re-alienation of three (3) pieces of freehold land held under H.S.(D) 484892, Lot. PTD 156358, H.S.(D) 484890, Lot PTD 156356 and H.S.(D) 511835 Lot PTD 168451, all of which situated in Mukim Tebrau, Daerah Johor Bahru, Negeri Johor and a green area reserve (Kawasan Lapang) (“the Development Land”) which form part of the mixed development known as Bandar Dato’ Onn at a purchase price of Ringgit Malaysia Seventy Million Two Hundred One Thousand Seven Hundred Thirty One and Cent Sixty (RM70,201,731.60) only for the purpose of constructing and operating of a mall with car parks and a departmental store cum supermarket in accordance with all the terms and conditions as stipulated in the Agreement (“Acquisition”).


2. THE ACQUISITION

2.1 Information on the Sale Property
      (i) Johor Land Berhad (Company No. 12379-K) (“Vendor”) is the registered owner of the Development Land.
      (ii) The Vendor shall, at its own cost and expense, apply for and obtain the necessary approval from the Relevant Authorities for the Surrender and Re-Alienation of the Development Land (“Surrender and Re-Alienation”) including amendments thereto as may be approved by the Relevant Authorities from time to time (“Amended Master Lay-Out Plan”) and procure the issuance of a separate document of freehold title measuring approximately 20.93 acres or 911,710.80 square feet with the land use of Shopping Centre Land for the construction and operation of a mall with car parks and departmental stores cum supermarket with such express condition as contained in the Agreement.
      (iii) Subject to the terms and conditions, the Vendor is desirous of selling the Shopping Centre Land measuring in total area of approximately 20.93 acres or 911,710.80 square feet which is to be stated in the separate document of freehold title of the Shopping Centre Land after the Surrender and Re-Alienation process to the Company, and the Company is desirous of purchasing the Shopping Centre Land free from all encumbrances, in which both the Vendor and the Company have mutually agreed to enter into an Agreement for the purpose of constructing a mall with a car park (“Complex”) thereon by the Company at its own costs and expenses.
      (iv) The Vendor intends to sell and the Company intends to purchase the Shopping Centre Land 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 hereinafter contained in the Agreement.
2.2 Basis of arriving at the purchase consideration
      The purchase consideration for the Acquisition amounting to Ringgit Malaysia Seventy Million Two Hundred One Thousand Seven Hundred Thirty One and Cent Sixty (RM70,201,731.60) only (“Purchase Price”) is arrived at the rate of Ringgit Malaysia Seventy Seven (RM77.00) only per square feet on an estimated total area of approximately 20.93 acres or 911,710.80 square feet of the Shopping Centre Land. The purchase consideration was arrived at a “willing-buyer willing-seller” basis in an arm’s-length transaction after taking into consideration the potential development of the Shopping Centre Land, the range of market values for similar lands in the vicinity and the valuation carried out by the Company’s valuer, C H Williams Talhar & Wong on 9 August 2012 which adopted the Comparison Method. The Comparison Method entails analyzing recent transactions and asking prices of similar properties in and around the locality for comparison purposes with adjustments made for differences in location, accessibility, visibility/exposure, terrain, size and shape of land, tenure, planning status, title restrictions if any and other relevant characteristics to arrive at the market value. The Company is not able to disclose the net book value of the Shopping Centre Land as the said net book value is not made known to the Company. The Acquisition will be fully satisfied by cash and funded by 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 Agreement
      The salient terms and conditions of the Agreement, among others, are as follows:-

      2.4.1 The completion of the Agreement of the Shopping Centre Land is subjected to and conditional upon the fulfillment of the following conditions precedent (“Conditions Precedent”) within sixteen (16) months from the date of the Agreement or such other extended date as may be mutually agreed by the parties:-

      (a) The Vendor shall at its own costs and expenses obtain the Amended Master Lay-Out Plan approval for the development of the Complex on the Shopping Centre Land including obtaining the followings approvals:-
          (i) the agreed traffic light junctions;
          (ii) road circulation as indicated in orange and yellow colours;
          (iii) road widening and upgrading if required by Relevant Authorities; and
          (iv) the necessary infrastructures as may be required by the Relevant Authorities.

      (b) The Vendor shall, at its own costs and expenses, 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 new separate document of freehold title for the Shopping Centre Land with the land use of “BUILDING-COMMERCIAL SHOPPING CENTRE” or its equivalent for construction and operation of a mall with car parks and departmental stores cum supermarket and with such express conditions on the Shopping Centre Land applicable for its use;

      (c) The Vendor shall at its own costs and expenses obtain the Planning Approval/ Development Order Approval for the development of the Complex on the Shopping Centre Land

      (d) The Vendor shall, at its own costs and expenses, obtain the approval from the Relevant State Authorities for the transfer of the Shopping Centre Land to the Company, ,if applicable;

      (e) The Company shall, at its own costs and expenses, obtain the approval for the Building Plan from the Relevant Authorities of which the Vendor has agreed to assist the Company in the submission of the Building Plan.

      (f) The Company shall, at its own costs and expenses, 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 this Agreement;

      (g) 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 this Agreement under Section 433(B) of the National Land Code 1965;

      (h) The Company shall, at its own costs and expenses, obtain the approval of the Distributive Trade Committee of the Ministry of Domestic Trade, Cooperative and Consumerism for the operation of the Complex and the departmental store cum supermarket on the Shopping Centre Land.

      (i) The Company shall, at its own costs and expenses, be allowed to enter into the Shopping Centre Land from time to time after the execution of this Agreement with notice to be given to the Vendor, solely for the purpose of survey, soil inspection or preparing for the earthworks.
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:-
      (a) The Company has paid to the Stakeholders, the Earnest Deposit in the sum of Ringgit Malaysia Seven Hundred Two Thousand Seventeen and Cent Thirty Two (RM702,017.32) Only being a sum equivalent to one percent (1%) of the Purchase Price upon obtaining approval from the Board for the purchase of the Shopping Centre Land SUBJECT TO the refund of the same to the Company within seven (7) days from the date of the written notice of the Company upon the non-agreement of the terms and conditions or the non-execution of this Agreement or if the transaction is aborted for whatsoever reasons, as the case may be;

      (b) The Company shall pay to the Stakeholders the Balance Deposit in the sum of Ringgit Malaysia Six Million Three Hundred Eighteen Thousand One Hundred Fifty Five and Cent Eighty Four (RM6,318,155.84) Only being a sum equivalent to nine percent (9%) of the Purchase Price upon the execution of this Agreement. The Earnest Deposit and Balance Deposit shall hereinafter collectively be referred to as the “Deposit” for this Agreement and shall form part of the Purchase Price upon execution of this Agreement;
      (c) The Company shall pay to the Stakeholders the sum of Ringgit Malaysia Seven Million Twenty Thousand One Hundred Seventy Three and Cent Sixteen (RM7,020,173.16) Only being a sum equivalent to ten percent (10%) of the Purchase Price (“First Payment”) within twenty one (21) days from the date of the Purchaser’s receipt of the Distributive Trade Committee (“DTC”) Approval and Economic Planning Unit (“EPU”) Approval, issued by the Relevant Authorities, whichever is later;

      (d) The Company shall pay to the Stakeholders the sum of Ringgit Malaysia Fourteen Million Forty Thousand Three Hundred Forty Six and Cent Thirty Two (RM14,040,346.32) Only being a sum equivalent to twenty percent (20%) of the Purchase Price (“Second Payment”) within twenty one (21) days from the date of the Company’s receipt of the Building Plan Approval issued by the Relevant Authorities;
      (e) The Company shall pay to the Stakeholders the sum of Ringgit Malaysia Fourteen Million Forty Thousand Three Hundred Forty Six and Cent Thirty Two (RM14,040,346.32) Only being a sum equivalent to twenty percent (20%) of the Purchase Price (“Third Payment”) within twenty one (21) days from the date of the Company’s receipt of the written notice from the Vendor pertaining to the completion of the external infrastructure and road works, at the Vendor’s own costs and expenses, with approvals from the Relevant Authorities, which shall include but not limited to completion of the infrastructures outside the boundary of the Shopping Centre Land, road widening and upgrading the existing road conditions and traffic lights including synchronizing of the traffic light;

      (f) The Company shall pay to the Stakeholders the sum of Ringgit Malaysia Fourteen Million Forty Thousand Three Hundred Forty Six and Cent Thirty Two (RM14,040,346.32) Only being a sum equivalent to twenty percent (20%) of the Purchase Price (“Fourth Payment”) within twenty one (21) days from the date of the Company’s receipt of the State Authority 433B Transfer Approval issued by the Relevant Authorities and the receipt of the State Authority’s Approval from the Vendor issued by the Relevant Authorities (if applicable), whichever is later;

      (g) The Company shall pay to the Stakeholders the sum Ringgit Malaysia Fourteen Million Forty Thousand Three Hundred Forty Six and Cent Thirty Two (RM14,040,346.32) Only being a sum equivalent to twenty percent (20%) of the Purchase Price (“Final Payment”) within two (2) months after the Unconditional Date.
2.5 Background Information on the Vendor
      The Vendor is a public limited company incorporated in Malaysia with its place of business at Kompleks Mutiara Johor Land, Jalan Bukit Mutiara, Bandar Dato’ Onn, 80000 Johor Bahru, Johor. The present authorized share capital of the Vendor is RM500,000,000.00 divided into 500,000,000 ordinary shares of RM1.00 each, of 452,000,000 ordinary shares have been issued and fully paid-up. The principal activity of the Vendor is property development, construction and investment holding company.
2.6 Completion Date

(a) The completion of the sale and purchase of the Shopping Centre Land hereunder shall take place on the day the Transfer Documents as defined in the Agreement are presented or caused to be presented for registration at the relevant land office/registry (“Completion Date”) and in the event the Company has not presented or caused to be presented the Transfer Documents for registration at the relevant land office/registry by the expiry of the Presentation Period for any reason whatsoever, the last day of the Presentation Period as stated in the Agreement shall be deemed the Completion Date.

(b) The Company shall notify the Vendor and the Stakeholders of the presentation of the Transfer Documents for registration at the relevant land office/registry as soon as practicable but no later than three (3) working days from the date of the presentation of the Transfer Documents for registration at the relevant land office/registry.


3. RATIONALE FOR THE ACQUISITION INCLUDING ANY BENEFIT WHICH IS EXPECTED TO ACCRUE

The Acquisition is in line with the Company’s corporate strategy of accelerating the expansion of its retail business through opening of new malls and outlets. The Acquisition provides such an opportunity for the Company to acquire land and expands its presence in the growing area of Kempas, Johor.


4. FINANCIAL EFFECTS OF THE ACQUISITION

The Acquisition is not expected to have any material impact on the earnings per share, net assets per share and gearing of the Company for the financial year ending 31 December 2013, but is expected to contribute positively to the future earnings of the Company. There will be no change in the share capital and substantial shareholders’ shareholdings of the Company.


5. PROSPECTS
      The Acquisition is part of the Company’s expansion plan for opening new stores and malls in strategic locations for the convenience of the customers. The Acquisition is expected to contribute positively to the future earnings and net assets of the Company.

6. APPROVALS REQUIRED AND ESTIMATED TIMEFRAME

The Acquisition is not subject to approval of the shareholders of the Company. Barring any unforeseen circumstances, the approvals required from the relevant authorities disclosed in Item 2.4 above are expected to be obtained within sixteen (16) months from the date of the Agreement or such other extended date as may be mutually agreed by the parties.

The Board expects the Acquisition to be completed within twenty (20) months from the date of the Agreement.


7. DIRECTORS’ AND MAJOR SHAREHOLDERS’ INTERESTS

None of the Directors and/or major shareholders of the Company and/or persons connected to them has any interest, direct or indirect, in relation to the Acquisition.


8. DIRECTORS’ RECOMMENDATIONS

The Board having considered all aspects of the Acquisition, is of the opinion that the Acquisition is in the best interests of the Company.


9. RISK FACTORS
      The economic value of the Acquisition is subject to the risks inherent in the property market. These include inter-alia changes in general economic, business and credit conditions and other external factors such as, obtaining approval for satisfactory performance from the relevant authorities.

      Apart from the above, the Board does not foresee any other significant risks arising from the Acquisition.

10. DOCUMENTS AVAILABLE FOR INSPECTION

A copy of the Agreement executed on 17 July 2013 and the Valuation Report by C H Williams Talhar & Wong dated 9 August 2012 are available for inspection at the registered office of the Company at 3rd Floor, AEON Taman Maluri Shopping Centre, Jalan Jejaka, Taman Maluri, Cheras, 55100 Kuala Lumpur during normal office hours from Monday to Friday (except public holidays) for a period of three (3) months from the date of this announcement.


This is a voluntary announcement under Paragraph 10.05(2) of the Main Market Listing Requirements of Bursa Malaysia Securities Berhad.

This announcement is dated 17 July 2013.


Announcement Info

Company NameAEON CO. (M) BHD  
Stock Name AEON    
Date Announced17 Jul 2013  
CategoryGeneral Announcement
Reference NoCC-130717-40785

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