Announcement

Date: 05 September 2008

Type
:
Announcement
Subject
:
ACQUISITION OF THE ENTIRE EQUITY INTEREST IN MEZZANINE ENTERPRISE SDN. BHD.

Contents
:
1. INTRODUCTION

The Board of Directors of RCE Capital Berhad ("RCE" or "the Company") wishes to announce that RCE Equity Sdn. Bhd. ("RCEE"), an indirect wholly-owned subsidiary company of RCE had on 5 September 2008 entered into a Sale and Purchase Agreement ("SPA") with AmcorpGroup Berhad ("AMCORP"), a major shareholder of RCE to acquire the entire equity interest in Mezzanine Enterprise Sdn. Bhd. ("MESB") comprising 1,000 ordinary shares of RM1.00 each ("Sale Shares") for a cash consideration of RM1.00 ("Purchase Consideration") (hereinafter referred to as "the Acquisition").

Following the Acquisition, MESB will be an indirect wholly-owned subsidiary of RCE.

2. BACKGROUND INFORMATION

2.1 Information on MESB

MESB was incorporated in Malaysia on 16 July 1991 and has an authorised share capital of RM25,000 comprising 25,000 shares of RM1.00 each of which 1,000 ordinary shares have been issued and fully paid-up. The original cost of investment of AMCORP in MESB is RM1,000.

The principal activities of MESB are trading of properties, options, bonds and investments.

MESB is the legal and beneficial owner of a 4-storey shop lot situated at Unit 24, Jalan 4/146, Bandar Tasik Selatan, 57000 Kuala Lumpur ("Property").

2.2 Information on AMCORP

AMCORP was incorporated in Malaysia on 26 April 1910 and has an authorised share capital of RM2,000,000,000 comprising 2,000,000,000 ordinary shares of RM1.00 each of which 1,071,689,034 ordinary shares have been issued and fully paid-up.

The principal activity of AMCORP is investment holding.

2.3 Salient terms of the SPA

The Sale Shares will be acquired free from all liens, charges and encumbrances and together with all rights and benefits attached thereto including any distribution, rights or bonus issue which may be declared on the ordinary share capital of MESB as from the completion of the Acquisition.

The Purchase Consideration of RM1.00 for the Sale Shares payable in cash upon the execution of the SPA was arrived at on a willing-buyer willing-seller basis after taking into consideration MESB's net liabilities of RM40,267,211 as at 31 July 2008.

As at 31 July 2008, AMCORP has advanced to MESB the sum of RM38,346,836 ("Debt"). RCEE has undertaken that MESB will settle part of the Debt to AMCORP by cash settlement of RM1,198,200 upon execution of the SPA ("Cash Settlement"). AMCORP agrees to assign unto RCEE absolutely the balance Debt after Cash Settlement for a consideration of RM1.00 upon the terms and conditions as contained in the SPA.

3. RATIONALE FOR THE ACQUISITION

The Acquisition is for its operations and investment purposes. As RCE Group is currently renting a unit of the Property for its office cum store, the Acquisition will enable the Group to save on rental charges.

MESB also has a strategic alliance with a co-operative which the Group believes it can tap on to expand its business.

4. EFFECTS OF THE ACQUISITION

The Acquisition will not have any effect on the issued and paid-up share capital and substantial shareholders' shareholdings of RCE.

The Acquisition is not expected to have any material effect on the earnings and net assets of RCE for the financial year ending 31 March 2009.

5. APPROVAL REQUIRED

The Acquisition is not subject to the approval of the shareholders of RCE or any other government authorities.

6. DIRECTORS' AND MAJOR SHAREHOLDERS' INTERESTS

The Acquisition is a related party transaction pursuant to Paragraph 10.08 of the Listing Requirements of Bursa Malaysia Securities Berhad by virtue of the persons being deemed interested as per the table in the Tables Section below.

Accordingly, TSDAH, SKW, SBA and SAH, being the interested Directors, have abstained from all deliberations and voting in respect of the Acquisition.

Save as disclosed above, none of the directors of RCE, or major shareholders or persons connected to them has any interest, direct or indirect, in the Acquisition.

7. STATEMENT BY DIRECTORS

The Board of Directors of RCE (save for TSDAH, SKW, SBA and SAH who are deemed interested in the Acquisition) having considered all aspects of the Acquisition, is of the opinion that the Acquisition is in the best interest of the Company.

This announcement is dated 5 September 2008.


Announcement Details :





Name of Related Party

Interested Directors / Major Shareholders / Persons Connected to the Interested Directors / Major Shareholders

Tan Sri Dato' Azman Hashim ("TSDAH")

- Executive Chairman of RCE and AMCORP

- Major Shareholder of RCE, AMCORP and CGSB

Soo Kim Wai ("SKW")

- Director of RCE and AMCORP

Shalina Azman ("SBA")

- Director of RCE, AMCORP and CGSB

- Person Connected to TSDAH

Shahman Azman ("SAH")

- Director of RCE

- Person Connected to TSDAH 

Cempaka Empayar Sdn. Bhd. ("CESB")

- Major Shareholder of RCE

- Person Connected to TSDAH

- Wholly-owned subsidiary of AMCORP

AMCORP

- Major Shareholder of RCE and CESB

- Person Connected to TSDAH 

Clear Goal Sdn. Bhd.

("CGSB")

- Major Shareholder of RCE, AMCORP and CESB

- Person Connected to TSDAH


]


Back