OTHERS SUNWAY BERHAD (“SUNWAY”) - JOINT VENTURE AGREEMENT BETWEEN SUNWAY ISKANDAR SDN BHD (A SUBSIDIARY OF SUNWAY) AND TAJUL GREEN SDN BHD
|Description||SUNWAY BERHAD (“SUNWAY”) |
- JOINT VENTURE AGREEMENT BETWEEN SUNWAY ISKANDAR SDN BHD (A SUBSIDIARY OF SUNWAY) AND TAJUL GREEN SDN BHD
The Board of Directors of Sunway wishes to announce that Sunway Iskandar Sdn Bhd (“SISB”), a subsidiary of Sunway, has on 24 July 2014, entered into a Joint Venture Agreement (“JVA") with Tajul Green Sdn Bhd (“TGSB”) for the purpose of formalising and setting out the basic terms of the parties’ relationship via their respective investment participation in the joint venture through Sunway Nursery and Landscape Sdn Bhd (formerly known as Trillion Desire Sdn Bhd) (“SNLSB”) to share resources and expertise in tree planting, nurturing and ensuring consistent supply of grown trees to the property development projects in Sunway Iskandar (“Proposed Joint Venture”).
2. INFORMATION ON SISB, TGSB AND SNLSB
SISB is a company incorporated in Malaysia and having its registered office at Level 16, Menara Sunway, Jalan Lagoon Timur, Bandar Sunway, 47500 Subang Jaya, Selangor Darul Ehsan. The authorised and paid-up capital of SISB are RM12,000,000/- and RM9,134,100/- respectively. The principal activity of SISB is property development.
3. SALIENT TERMS OF THE JVA
SISB and TGSB have entered into the JVA to regulate the parties' relationship as shareholders of SNLSB to undertake the Proposed Joint Venture.
Under the JVA, the shareholding of SNLSB shall be structured as follows:-
Shareholder Number of Ordinary Number of Redeemable Preference Agreed Proportion (%) SISB 50,000 2,700,000 50% TGSB 50,000 2,700,000 50% TOTAL: 100,000 5,400,000 100%
Number of Ordinary
Number of Redeemable Preference
Agreed Proportion (%)
4. LIABILITIES TO BE ASSUMED
There are no liabilities (including contingent liabilities and guarantees) to be assumed by Sunway arising from the Proposed Joint Venture.
In view of the booming property development activities in Johor, it is foreseen that there will be shortages of supply of grown trees in the region. SISB, via the Proposed Joint Venture will be able to ensure healthy and well grown trees are planted in the projects within Sunway Iskandar.
7. FEASIBILITY STUDY
A market study and feasibility study were conducted prior to entering into the Proposed Joint Venture. Based on the results of the studies and the rationale mentioned above, Sunway is of the view that it is financially viable and attractive to proceed with the Proposed Joint Venture.
8. RISK FACTORS
The trees planted are subject to the demand from projects within Sunway Iskandar and the said demand in the property industry is cyclical in nature. The achievability of future earnings is highly dependent on inter alia, the location and type of development, ability to obtain relevant approvals, performance of building contractors as well as general market conditions. However, the risk will be mitigated as the development is located at a strategic location and Sunway with its track records, will take necessary actions to mitigate the identified risks.
9. SOURCE OF FUND
SISB will fund its share of equity participation in SNLSB through internally generated funds.
10. EFFECTS OF THE PROPOSED JOINT VENTURE
10.1 On Share Capital and Substantial Shareholders’ Shareholding
The Proposed Joint Venture will not have any effect on the share capital and substantial shareholders' shareholding of Sunway as they do not involve any allotment or issuance of new shares by Sunway.
10.2 On Earnings Per Share, Net Assets Per Share and Gearing
The Proposed Joint Venture is not expected to have any immediate material effect on the earnings per share, net assets per share and gearing of Sunway for the financial year ending 31 December 2014. However, the Proposed Joint Venture is expected to contribute positively to the future earnings of Sunway Group.
11. APPROVAL REQUIRED
The Proposed Joint Venture does not require approval from the shareholders of Sunway or any relevant authorities.
12. DIRECTORS' AND MAJOR SHAREHOLDERS' INTERESTS
Insofar as the Directors are aware, none of the directors or major shareholders of Sunway or persons connected with them has any interest, whether direct or indirect, in the Proposed Joint Venture.
13. STATEMENT BY THE BOARD OF DIRECTORS
The Board of Directors of Sunway is of the opinion that the Proposed Joint Venture is in the best interests of Sunway.
14. DOCUMENTS AVAILABLE FOR INSPECTION
The JVA is available for inspection at the registered office of Sunway at Level 16, Menara Sunway, Jalan Lagoon Timur, Bandar Sunway, 47500 Subang Jaya, Selangor Darul Ehsan during normal business hours (9.00 a.m. to 6.00 p.m.) from Monday to Friday (except public holidays) for a period of 3 months from the date of this announcement.
This announcement is dated 24 July 2014.
|Company Name||SUNWAY BERHAD|
|Date Announced||24 Jul 2014|