We wish to announce that pursuant to Chapter 9, Paragraph 9.19(23) and Chapter 10, Paragraph 10.05 of the Main Market Listing Requirements of Bursa Malaysia Securities Berhad (“Bursa Securities”), 

(1) Sunway Holdings Sdn Bhd (“SunHoldings”), a wholly-owned subsidiary of Sunway and the Winstar Vendors have on 9 April 2015, entered into a Share Sale Agreement (“Winstar SSA”) for the acquisition of 6,717,472 ordinary shares of RM1/- each, representing 100% of the total issued and paid-up share capital of Winstar Trading Sdn Bhd (“WTSB”) at an estimated purchase consideration of approximately RM130,953,294/- ("the Proposed Winstar Acquisition"); and

(2) SunHoldings and the PND Vendors have on 9 April 2015, entered into a Share Sale Agreement (“PND SSA”) for the acquisition of 500,000 ordinary shares of S$1/- each, representing 100% of the total issued and paid-up share capital of PND Hardware & Trading Pte Ltd (“PND”) at an estimated purchase consideration of approximately S$2,567,192/- ("the Proposed PND Acquisition").

The Proposed Winstar Acquisition and the Proposed PND Acquisition are unique opportunities for Sunway’s Trading and Manufacturing Division to acquire profitable market leaders with over 30 years of experience in the wholesaling of hardware market. It also provides an additional revenue stream which will further diversify the risks of the Group. The Group anticipates synergies from cross-selling across the customer base of Sunway, WTSB and PND and potential cost savings from warehousing facilities due to economies of scale. There is also potential for WTSB and PND to supply to Sunway’s property and construction projects in the future.

A. PROPOSED WINSTAR ACQUISITION

The estimated purchase consideration for the Proposed Winstar Acquisition was arrived at based on aggregate net asset value (excluding minority interests) (“NAV”) of WTSB and its group of subsidiaries (“WTSB Group”) as at 31 December 2013 together with goodwill (“Pre-Adjustment Purchase Consideration”). The amount of the purchase consideration is subject to adjustments and will be payable by SunHoldings in 3 tranches as follows: 

(1) On the completion date of the first tranche, SunHoldings shall acquire 60% of the total issued and paid-up share capital of WTSB by paying part of the consideration amounting to RM78,571,972.50 (“First Tranche Consideration”) or the adjusted first tranche consideration, as the case may be, which shall be computed in the following manner:

i) In the event the NAV of WTSB Group is less than the Pre-Adjustment Purchase Consideration after deduction of the goodwill, there shall be a corresponding downwards adjustment of the First Tranche Consideration; and

ii) In the event the NAV of WTSB Group is greater than the Pre-Adjustment Purchase Consideration after deduction of the goodwill, there shall be no adjustment in the First Tranche Consideration.   

The completion date of the first tranche shall mean the business day falling 45 days after the Winstar SSA becomes unconditional or such other date as may be agreed by the parties.

(2) On the completion date of the second tranche, SunHoldings shall acquire another 20% of the total issued and paid-up share capital of WTSB by paying an amount equivalent to 20% of 5 times the average EBITDA of WTSB Group as recorded in its audited consolidated financial statements for the 2 financial years ending 31 December immediately preceding the second tranche completion date.

The completion date of the second tranche shall mean the second anniversary of the first tranche completion date or such other date as may be agreed upon by the parties.

(3) On the completion date of the third tranche, SunHoldings shall acquire the remaining 20% of the total issued and paid-up share capital of WTSB by paying an amount equivalent to 20% of 5 times the average EBITDA of WTSB Group as recorded in its audited consolidated financial statements for the 2 financial years ending 31 December immediately preceding the third tranche completion date.

The completion date of the third tranche shall mean the third anniversary of the first tranche completion date or such other date as may be agreed upon by the parties.

Upon the completion of the Proposed Winstar Acquisition, WTSB Group will become subsidiaries of SunHoldings. The details of WTSB Group are set out in the table below. The principal activities of the WTSB Group are trading of hardware, engineering products and industrial safety products in Malaysia.

Under the Winstar SSA, the Winstar Vendors have jointly and severally guaranteed that WTSB Group will achieve profit after tax (“PAT”) of RM15.0 million per annum (“Profit Guarantee”) for the financial years ending 31 December 2015, 2016 and 2017, failing which Winstar Vendors will pay SunHoldings an amount equivalent to, the difference between the Profit Guarantee and actual PAT achieved for the respective financial year, multiplied by the shareholding of SunHoldings in WTSB in the respective financial year.   

The Board of Sunway will make the necessary announcement pursuant to Chapter 10 of the Main Market Listing Requirements of Bursa Securities, in the event any one of the percentage ratios of the Proposed Winstar Acquisition is 5% or above. 

The Proposed Winstar Acquisition is not expected to have any immediate material effect on the earnings per share and net assets per share of Sunway and it has no effect on Sunway's share capital and substantial shareholders' shareholding.

The Proposed Winstar Acquisition does not require approval from the shareholders of Sunway.

None of the directors or substantial shareholders of Sunway or persons connected with them has any interest, whether direct or indirect in the Proposed Winstar Acquisition.

B. PROPOSED PND ACQUISITION

The estimated purchase consideration for the Proposed PND Acquisition was arrived at based on net asset value (excluding minority interests) (“NAV”) of PND as at 31 December 2013 together with goodwill (“Pre-Adjustment Purchase Consideration”). The amount of the purchase consideration is subject to adjustments and will be payable by SunHoldings in 3 tranches as follows: 

(1) On the completion date of the first tranche, SunHoldings shall acquire 60% of the total issued and paid-up share capital of PND by paying part of the consideration amounting to S$1,540,315.20 (“First Tranche Consideration”) or the adjusted first tranche consideration, as the case may be, which shall be computed in the following manner:

i) In the event the NAV of PND is less than the Pre-Adjustment Purchase Consideration after deduction of the goodwill, there shall be a corresponding downwards adjustment of the First Tranche Consideration; and

ii) In the event the NAV of PND is greater than the Pre-Adjustment Purchase Consideration after deduction of the goodwill, there shall be no adjustment in the First Tranche Consideration.   

The completion date of the first tranche shall mean the business day falling 45 days after the PND SSA becomes unconditional or such other date as may be agreed by the parties.

(2) On the completion date of the second tranche, SunHoldings shall acquire another 20% of the total issued and paid-up share capital of PND by paying an amount equivalent to 20% of 5 times the average EBITDA of PND as recorded in its audited financial statements for the 2 financial years ending 31 December immediately preceding the second tranche completion date.

The completion date of the second tranche shall mean the second anniversary of the first tranche completion date or such other date as may be agreed upon by the parties.

(3) On the completion date of the third tranche, SunHoldings shall acquire the remaining 20% of the total issued and paid-up share capital of PND by paying an amount equivalent to 20% of 5 times the average EBITDA of PND as recorded in its audited financial statements for the 2 financial years ending 31 December immediately preceding the third tranche completion date.

The completion date of the third tranche shall mean the third anniversary of the first tranche completion date or such other date as may be agreed upon by the parties.

Upon the completion of the Proposed PND Acquisition, PND will become a subsidiary of SunHoldings. PND was incorporated on 28 July 2003 and its principal activities are general wholesale trading of hardware, engineering products and industrial safety products in Singapore. 

Under the PND SSA, the PND Vendors have jointly and severally guaranteed that PND will achieve profit after tax (“PAT”) of S$250,000/- per annum (“Profit Guarantee”) for the financial years ending 31 December 2015, 2016 and 2017, failing which PND Vendors will pay SunHoldings an amount equivalent to, the difference between the Profit Guarantee and actual PAT achieved for the respective financial year, multiplied by the shareholding of SunHoldings in PND in the respective financial year.   

The Board of Sunway will make the necessary announcement pursuant to Chapter 10 of the Main Market Listing Requirements of Bursa Securities, in the event any one of the percentage ratios of the Proposed PND Acquisition is 5% or above. 

The Proposed PND Acquisition is not expected to have any immediate material effect on the earnings per share and net assets per share of Sunway and it has no effect on Sunway's share capital and substantial shareholders' shareholding.

The Proposed PND Acquisition does not require approval from the shareholders of Sunway.

None of the directors or substantial shareholders of Sunway or persons connected with them has any interest, whether direct or indirect in the Proposed PND Acquisition.

This announcement is dated 9 April 2015.