BURSA ANNOUNCEMENTS

Date : 01 March 2000

GREAT WALL PLASTIC INDUSTRIES BERHAD ("GWPI") I. PROPOSED ACQUISITION OF THE ENTIRE ISSUED AND PAID-UP SHARE CAPITAL OF ENFARI SDN BHD ("ENFARI") COMPRISING 50,000,000 ORDINARY SHARES OF RM1.00 EACH FOR A TOTAL PURCHASE CONSIDERATION OF RM250,000,000, TO BE SATISFIED BY THE ISSUANCE OF 75,528,701 NEW ORDINARY SHARES OF RM1.00 EACH IN GWPI ("GWPI SHARES") AT AN ISSUE PRICE OF RM3.31 PER SHARE ("PROPOSED ACQUISITION"); II. PROPOSED WAIVER PURSUANT TO THE PROVISIONS OF PRACTICE NOTE 2.9.1 OF THE MALAYSIAN CODE ON TAKE-OVERS AND MERGERS, 1998 FOR ALL THE REMAINING GWPI SHARES NOT ALREADY HELD BY ENFARI LIMITED AND/OR ITS NOMINEES TOGETHER WITH PARTIES DEEMED ACTING IN CONCERT WITH THEM; AND III. PROPOSED TRANSFER OF BUSINESS, hereinafter collectively referred to as "the Proposals"

GREAT WALL PLASTIC INDUSTRIES BERHAD

TypeReply to query
Reply to Query Letter by KLSE reference IDKM-000228-45406
Subject
GREAT WALL PLASTIC INDUSTRIES BERHAD ("GWPI")

I. PROPOSED ACQUISITION OF THE ENTIRE ISSUED AND PAID-UP
SHARE CAPITAL OF ENFARI SDN BHD ("ENFARI") COMPRISING
50,000,000 ORDINARY SHARES OF RM1.00 EACH FOR A TOTAL
PURCHASE CONSIDERATION OF RM250,000,000, TO BE SATISFIED
BY THE ISSUANCE OF 75,528,701 NEW ORDINARY SHARES OF
RM1.00 EACH IN GWPI ("GWPI SHARES") AT AN ISSUE PRICE OF
RM3.31 PER SHARE ("PROPOSED ACQUISITION");

II. PROPOSED WAIVER PURSUANT TO THE PROVISIONS OF
PRACTICE NOTE 2.9.1 OF THE MALAYSIAN CODE ON TAKE-OVERS
AND MERGERS, 1998 FOR ALL THE REMAINING GWPI
SHARES NOT ALREADY HELD BY ENFARI LIMITED AND/OR ITS
NOMINEES TOGETHER WITH PARTIES DEEMED ACTING IN CONCERT
WITH THEM; AND

III. PROPOSED TRANSFER OF BUSINESS,
hereinafter collectively referred to as "the Proposals"

Contents :

QUOTE


Further to your query in respect of the above Proposals, we are pleased to furnish the following additional information for public release:

i) The date of the original investment in Enfari by the Vendor, Enfari Limited, is as follows:

      Date of Investment
      Amount
      RM'000
      27 January 1998
      4,000
      2 February 1998
      1,000
      ----------
      5,000
      ======

ii) Encorp Construct Sdn Bhd is principally involved in general contracting.

iii) Besides the details disclosed in Section 2 of the Announcement dated 17 February 2000, the salient features of the Sale and Purchase Agreement dated 17 February 2000 ("Agreement"), in relation to the Proposed Acquisition are as follows:-

      1. Obligations following execution
        (i) Enfari Limited ("the Vendor"), shall subscribe for 45,000,000 ordinary shares of RM1.00 in Enfari Sdn Bhd ("the Company") within three (3) months from the date of the Agreement dated 17 February 2000, bringing the issued and paid up capital of the Company to RM50,000,000, consisting of 50,000,000 fully paid up ordinary shares of RM1.00 each ("Sale Shares").
          (ii) GWPI ("the Purchaser") shall appoint a reputable accounting firm ("the Independent Valuer") that is acceptable to the Vendor to conduct an independent valuation of the Sale Shares ("the Independent Valuation") within fourteen (14) days from the date of the Agreement and the Independent Valuation is to be completed and issued as a final report within forty five (45) days from the date of the Agreement. The purchase price for the Sale Shares ("Purchase Price") shall be subject to revision only in the event that the Independent Valuation produces a valuation of the Sale Shares that differs from the Purchase Price. In such event, the Purchase Price shall be adjusted to be equal to the Independent Valuation and the number of GWPI Shares to be issued pursuant to the Proposed Acquisition shall then be adjusted correspondingly, subject always to all necessary approvals from the relevant authorities. In the event that the Independent Valuation revises the Purchase Price by ten percent (10%) or less, the parties shall accept such revision in the Purchase Price. In the event that the Independent Valuation revises the Purchase Price by more than ten percent (10%), either party shall be entitled by notice in writing to the other party to terminate the Agreement.
            2. Conditions Precedent

                The Agreement shall become unconditional on the date ("the Unconditional Date") the conditions stipulated in Section 7 of the Announcement dated 17 February 2000 are fulfilled and on condition that the due diligence on the Company to be conducted by the Purchaser being satisfactory to the Purchaser ("Conditions Precedent").
            3. Completion

                The Completion of the Agreement shall be at the registered office of the Purchaser on a date ("the Completion Date") falling within one (1) month of the Unconditional Date to be agreed between the parties to the Proposed Acquisition or failing agreement, on the thirtieth (30th) day following the Unconditional Date.
            4. Vendor's Indemnity

                The Vendor covenants with the Purchaser that it will indemnify and at all time keep the Purchaser indemnified against any tax liability or taxation assessable or recoverable on or from the Company to the extent of its tax liability in relation to profits of the Company prior to the Completion Date, unless the same has been disclosed to the Purchaser in writing.
        iv) As GWPI will be acquiring 100% of Enfari, all the existing liabilities of Enfari will correspondingly be assumed by GWPI. Particulars of liabilities to be assumed by GWPI as at 31 December 1999 are as follows:-
            As at
            31 December 1999
            RM'000
            Trade creditors
            6,080
            Other creditors (including advance payments from the Ministry of Education of RM45.0 million)
            45,750
            Amount due to a director
            Amount due to companies in which directors
            have substantial interest
            14,421

            3
            ------------
            66,254
            Hire purchase creditors
            101
            -----------
            66,355
            ======
        v) Subject to verification and financial due diligence on GWPI and Enfari, the Proposed Acquisition is expected to enhance the consolidated earnings per share of GWPI in the long run.
          vi) In respect of the Proposed Acquisition, the Board of Directors of GWPI is of the opinion that the Proposed Acquisition is in the best interest of GWPI.
            vii) The net tangible assets and net profit as at 31 January 1998 of Enfari, being the latest audited consolidated accounts, are as follows:
            Net Tangible Assets
            RM'000

            4,987
            Net Profit
            Nil
              viii) Based on the weighted average closing market price of GWPI of RM5.41 per share for the past five (5) market days ended 15 February 2000 (being the last trading day prior to suspension as at 16 February 2000), the market capitalisation of GWPI is RM216.4 million.

              UNQUOTE

              Yours faithfully
              For and on behalf of
              BUMIPUTERA MERCHANT BANKERS BERHAD




              YOON SWEE KONG EDWIN YEAP
              Acting Chief Executive Officer Deputy Manager
              Corporate Finance

              c.c.: Securities Commission
              Attn.: Puan Nyonya Yahya

              c.c.: Great Wall Plastic Industries Berhad
              Attn.: Mr Chuah Kooi Lian @ Lim Kooi Lian



              Query Letter Contents :

              We refer to your announcement on 17 February 2000 in respect of the above
              mentioned Proposed Acquisition.
              In this connection, kindly furnish the Exchange with the following additional
              information for public release:-
              Date of original investment in Enfari by the Vendor;
              Description of business carried out by Encorp Construct Sdn Bhd;
              Salient features of the sale and purchase agreement in relation to the Proposed
              Acquisition;
              Particulars of liabilities to be assumed by GWPI arising from the Proposed
              Acquisition;
              Effect of the Proposed Acquisition on the earnings per share of the Group;
              Statement by the entire Board of Directors of GWPI stating whether the Proposed
              Acquisition is in the best interest of the Company, and where a director
              disagrees with such statement, a statement by the director setting out the
              reasons and factors taken into considerations in forming such opinion;
              Net tangible assets and net profit of Enfari based on the latest audited
              accounts and state the financial year end of such accounts; and
              Market capitalisation of GWPI based on the weighted average market price of
              the Company’s shares for the five (5) market days prior to the date on which
              the terms of the agreement were agreed upon.
              Please furnish the Exchange with your reply within two (2) market days from the
              date hereof.

              Yours faithfully
              KUALA LUMPUR STOCK EXCHANGE

              LISA LAM
              Senior Manager, Listing Operations

              LL/CKM

              Copy : Securities Commission



              Announcement Info

              Company NameGREAT WALL PLASTIC INDUSTRIES BERHAD  
              Stock Name GWPI    
              Date Announced1 Mar 2000  
              CategoryGeneral Announcement
              Reference NoMM-000228-58467

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