1. INTRODUCTION
The Board of Directors of TRIVE is pleased to announce that on 21 March 2018, ETI Tech (M) Sdn Bhd (“ETI-M” or “Vendor”), a wholly-owned subsidiary of the Company has entered into a Sale & Purchase Agreement (“SPA”) with Frisian Biosciences Sdn Bhd (“FBSB” or “Purchaser”) for the disposal of all that piece of leasehold land known as Lot No. 12, Industrial Zone Phase II, Kulim Hi-Tech Park, Kedah Darul Aman, Malaysia together with a 3 storey detached factory building erected thereon for a total cash consideration of RM4,000,000.00 exclusive of GST (“the Disposal Consideration”) [“Transaction”].
2. INFORMATION ON ETI TECH (M) SDN BHD
ETI-M was incorporated as a private limited company in Malaysia on 30 July 2002 with issued and paid-up share capital of RM1,376,627 as at 21 March 2018 (“LPD”). ETI-M is principally involved in trading, design and marketing of battery management system for rechargeable energy storage solutions.
3. INFORMATION OF THE PURCHASER
FBSB, was incorporated as a private limited company in Malaysia on 30 January 2018 with its registered office at No. 63 1st Floor, Jalan Selat, Taman Selat, 12000 Butterworth, Penang. The issued and paid-up share capital as at LPD is RM100,000. FBSB is principally involved in research and development on other natural science and engineering n.e.c, other business support service activities n.e.c and research and development on biotechnology.
4. INFORMATION OF THE PROPERTY
Perbadanan Kemajuan Negeri Kedah (“PKNK”) is the registered proprietor of the Property. By a Declaration of Trust dated 20 November 1994 made between PKNK and Kulim Technological Park Corporation Berhad (Company No. 44351-D) (“KTPCB”), PKNK holds the Land (as hereinafter defined) on trust for KTPCB as the beneficial owner.
By a Lease Agreement dated 26 December 2004 entered between KTPCB and the Vendor, KTPCB had granted and the Vendor had accepted a 60 years lease of the land measuring approximately 2.5 acres known as Lot No. 12, Industrial Zone Phase II, Kulim Hi-Tech Park, Kulim, Kedah Darul Aman and held under H.S.(D) 50652 PT No. 1950, Bandar Kulim, Daerah Kulim, Kedah Darul Aman (formerly held under H.S.(D) 1708 P.T. No. 1950, Mukim Padang China, Daerah Kulim, Kedah Darul Aman) together with a three (3) storey detached factory erected thereon bearing postal address Plot 12, Jalan Hi-Tech 7, KHTP Phase 2, Kulim Hi-Tech Park, 09000 Kulim, Kedah Darul Aman (“Property”) upon the terms and subject to the conditions contained therein.
The issue document of title records that the lease of the Property is for a period of 30 years commencing on 26 December 2004 and ending on 25 December 2034. The remaining lease for a term of 30 years has not been registered at the relevant land office. The Property is presently charged to Malayan Banking Berhad.
5. BASIS OF ARRIVING AT THE DISPOSAL CONSIDERATION
The Disposal Consideration was arrived on the price offered by the Purchaser according to prevailing market value to which ETI-M has agreed to accept on a “willing buyer and willing seller” basis after taking into consideration the current economic situation and that the Property has been up for sale for more than 2 years.
6. UTILISATION OF PROCEEDS
The proceeds from the Transaction will be utilized for future working capital within 24 months.
7. ASSUMPTION OF LIABILITIES
There are no liabilities, including contingent liabilities and guarantees to be assumed by the Purchaser arising from the Transaction.
8. DATE OF INVESTMENT AND ORIGINAL COST OF THE PROPERTY
Date of Investment | Original Cost of Investment |
| |
9. SALIENT TERMS OF THE SPA
9.1 Agreement to sell and purchase
It is hereby agreed that the Property is sold:
(a) subject to all conditions of title, categories of land use and restrictions in interest whether express or implied now or hereafter imposed upon, relating to or affecting the Property or to which the Property is subject;
(b) subject to all restrictive and other covenants, easements, common rights, rights of way, right of support, drainage, light and other rights relating to or affecting the Property or to which the Property is subject;
(c) subject to all schemes or proposed schemes now or hereafter affecting the Property by any governmental authorities;
(d) on an “as is where is” basis, with the Vendor making no representation or warranty of any kind whatsoever, whether express or implied including without limitation as to its completeness, description, measurement, area, state, condition, quality, fitness for use or purpose or vacant possession thereof or the availability, correctness, completeness or the state and condition of any approval(s), building plan(s), certificate of fitness for occupation or compliance with any laws, regulations, building by-laws, licenses or permit requirements or authority approvals (if applicable). Neither the Vendor nor its agents or representatives shall be held liable to the Purchaser in any way whatsoever in respect thereof.
9.2 Consideration and Payment
9.2.1 The Purchaser:
(a) has prior to the date of this Agreement paid to the Vendor’s Solicitors as stakeholders a sum of RM80,000.00 only (“Earnest Deposit”) as earnest deposit and part payment towards the account of the Deposit and the Disposal Consideration; and
(b) shall, simultaneously with its execution of this Agreement pay a further aggregate sum of RM320,000.00 only (“Balance Deposit”) in the following manner as payment of the Balance Deposit and part payment towards the account of the Disposal Consideration:
(i) a sum of RM200,000.00 to the Vendor’s Solicitors as stakeholder for the Vendor; and
(ii) a sum of RM120,000.00 to the Purchaser’s Solicitors as stakeholders to be paid to the Director General of Inland Revenue.
The Earnest Deposit together with the Balance Deposit (collectively, the “Deposit”) shall constitute the forfeitable deposit payable to the Vendor under the SPA.
9.2.2 The Purchaser shall pay the balance Disposal Consideration of RM3,600,000.00 (“Balance Consideration”) to the Vendor’s on or before the Completion Date – 3 months from the unconditional date (“Completion Date”). The unconditional date means the day on which all the conditions precedent are fulfilled or deemed fulfilled or waived.
9.2.3 In the event that the Purchaser is unable to pay the Balance Consideration on or before the Completion Date, then subject to the Vendor’s receipt of a written request from the Purchaser prior to the Completion Date, the Vendor shall grant to the Purchaser an extension of a period of 1 month from the Completion Date (“Extended Completion Date”) to pay the Balance Consideration with interest being payable at the rate of 6% per annum on the Balance Consideration remaining outstanding calculated on a daily basis from the Completion Date until the date of receipt of the Balance Consideration in full and in cleared funds by the Vendor. The interest shall be calculated on the basis of the actual number of days elapsed based on a 365 days year and shall accrue from day to day and shall be paid to the Vendor simultaneously with the payment of the Balance Consideration.
9.3 Conditions Precedent
It is hereby expressly agreed that this SPA is conditional upon the following conditions precedent being fulfilled by the Vendor, at its own cost and expense within 6 months from the date of this SPA or such extended period as may be agreed by the Purchaser, which shall not be unreasonably withheld:
(a) a valid and registrable Form 15A duly executed by PKNK for a further period of 30 years commencing on 26 December 2034 and ending on 25 December 2064 together with the requisite registration fees and relevant supporting documents;
(b) if necessary, consent of PKNK to the proposed sale and transfer under this Agreement; and
(c) the novation agreement to novate all such rights, interest and liabilities of the Vendor under the Lease Agreement to the Purchaser entered into between the Vendor, the Purchaser and KTPCB becoming unconditional.
10. ESTIMATED TIME FRAME FOR COMPLETION
Barring unforeseen circumstances, the Transaction is expected to be completed within 9 months.
11. RATIONALE OF THE TRANSACTION
The Transaction provides an opportunity for ETI-M to realize the Property which has not been utilized and thereby the Transaction allows the Company to utilize the proceeds for its future working capital.
12. FINANCIAL EFFECTS
12.1 Share capital and substantial shareholders’ shareholdings
The Transaction will not have any effect on the share capital and substantial shareholders’ shareholdings as the Transaction will be satisfied entirely in cash and does not involve any issuance of new ordinary shares in TRIVE.
12.2 Earnings
The Transaction is expected to have a negative effect on the Group’s earnings for the financial year ending 31 January 2019 as a result of the loss on disposal. The calculation of the net loss from the Transaction is as follows:
| | RM |
| Disposal Consideration | 4,000,000.00 |
| Less: | |
| Net Book Value of the Property | 4,841,820.45 |
| Estimated Expenses for the Transaction | 50,000.00 |
| Loss on Disposal | 891,820.45 |
12.3 Gearings
The Transaction is expected to have no impact on the Group’s gearing ratio.
12.4 Net Assets
The Transaction is expected to have a minor impact on the Group’s net assets for the financial year ending 31 January 2019 as a result of the disposal. The net assets would remain at RM0.04 after taken into consideration of this disposal.
13. DIRECTORS' AND/OR MAJOR SHAREHOLDERS' INTEREST
None of the directors and/or major shareholders of TRIVE and/or persons connected with them has any interest, either direct or indirect in the Transaction.
14. APPROVALS REQUIRED
The Transaction is not subject to the approval of shareholders of TRIVE and the relevant government authorities.
15. STATEMENT BY THE BOARD OF DIRECTORS
The Board of Directors of TRIVE, after taking into consideration of the rationale of the Transaction, is of the opinion that the Transaction is in the best interest of the Company.
16. HIGHEST PERCENTAGE RATIO APPLICABLE
The highest percentage ratio applicable to the Transaction pursuant to paragraph 10.02(g) of the Main Market Listing Requirements of Bursa Securities is 7.12%.
17. DOCUMENTS FOR INSPECTION
The SPA and the valuation report are available for inspection by the shareholders of TRIVE at the registered office situated at 51-21-A Menara BHL Bank, Jalan Sultan Ahmad Shah, 10050 Penang during office hours from Mondays to Fridays (except public holidays) for a period of 3 months from the date of this announcement.
This announcement is dated 21 March 2018.
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