Date: 04 December 2018

OTHERS NOTICE OF TRANSFER OF SHARES UNDER THE FRAMEWORK AGREEMENT BETWEEN SONATRACH SPA ("SONATRACH") AND L' ALGERIENNE DES EAUX ("ADE") (COLLECTIVELY REFERRED TO AS "THE OFFTAKERS"), ALGERIAN ENERGY COMPANY SPA ("AEC") OF THE ONE PART AND THE COMPANY'S SUBSIDIARY, TLEMCEN DESALINATION INVESTMENT COMPANY SAS ("TDIC") OF THE OTHER PART ("FRAMEWORK AGREEMENT") IN RELATION TO THE SEA WATER DESALINATION PLANT IN THE DISTRICT OF TLEMCEN, ALGERIA ("PLANT")


Type Announcement
Subject OTHERS
Description NOTICE OF TRANSFER OF SHARES UNDER THE FRAMEWORK AGREEMENT BETWEEN SONATRACH SPA ("SONATRACH") AND L' ALGERIENNE DES EAUX ("ADE") (COLLECTIVELY REFERRED TO AS "THE OFFTAKERS"), ALGERIAN ENERGY COMPANY SPA ("AEC") OF THE ONE PART AND THE COMPANY'S SUBSIDIARY, TLEMCEN DESALINATION INVESTMENT COMPANY SAS ("TDIC") OF THE OTHER PART ("FRAMEWORK AGREEMENT") IN RELATION TO THE SEA WATER DESALINATION PLANT IN THE DISTRICT OF TLEMCEN, ALGERIA ("PLANT")

Introduction

 

Further to the announcement dated 19 November 2018, Malakoff Corporation Berhad ("MCB" or "Company") wishes to announce that its subsidiary, TDIC, had on 30 November 2018 received a Notice of Transfer of Shares dated 29 November 2018 ("Notice") issued by AEC, to the Offtakers and TDIC, notifying its decision to transfer TDIC's shares in Almiyah Attilemcania SPA ("AAS") to AEC and its intention to carry out a Technical Appraisal of the Plant.

 

AEC is the 49% shareholder of AAS, a joint stock company incorporated in Algeria for the design, installation and operation of the Plant whilst TDIC holds the remaining 51% of AAS.

 

Pursuant to the Framework Agreement, the Offtakers and TDIC may dispute the validity of the Notice within seven (7) days from the date of receipt of the Notice. The Notice was issued following the issuance of the Notice of Termination dated 12 November 2018 by the Offtakers to AAS and TDIC, under the Water Purchase Agreement dated 9 December 2007.

 

TDIC will be seeking legal advice and taking the necessary steps to challenge the purported Notice issued by AEC.

 

Financial Impact

 

MCB Group's carrying amount of investment in AAS had been fully provided for in the financial year 2016. The purported issuance of the Notice is not expected to have any material effect on the earnings, net assets and gearing of MCB Group for the financial year ending 31 December 2018. 

 

MCB will make further announcement(s) as and when there are any material developments in relation to the above matter.

 

This announcement is dated 4 December 2018.