| Query Letter Contents | We refer to the Company's announcement dated 10 September 2013, in respect of
the aforesaid matter.
In this connection, kindly furnish Bursa Malaysia Securities Berhad ("Bursa
Securities") with the following additional information for public release:-
1. The effect of the Proposed Disposal on the business operations of IRMSB and
the Group. To also elaborate on where will the business operation of IRMSB be
undertaken after the Proposed Disposal.
2. To tabulate the effects of the Proposed Disposal on the earnings per share
and net assets per share.
3. The original cost of investment by IRMSB in the Property and the date of
such investment.
4. Whether IRMSB is a major subdsidiary of IRM Group Berhad.
5. Detail breakdown of the proceeds to be utilised for the repayment of bank
loans and creditors, including the tiemframe for full utilisation.
6. To state the name of the relevant authorities and the timeframe for
submission of the application to the relevant authorities.
7. The estimated timeframe to complete the Proposed Disposal.
8. Total size of each of the building erected on the land and the approximate
age for each of the building.
9. The name of the valuer, date and method of valuation adopted by the valuer
and quantification of the market value, and to also make available the
valuation report for inspection.
10. Particulars of all liabilities to be assumed by the Purchaser arising from
the Proposed Disposal.
11. The highest percentage ratio pursuant to Paragraph 10.02(g) of the Main
Market Listing Requirements.
Please furnish Bursa Securities with your reply within one (1) market day from
the date hereof.
Page 2/-
Yours faithfully
HENG TECK HENG
Head, Issuers
Listing Division
Regulation
IJ/TEK
c.c:- General Manager and Head, Market Surveillance, Securities Commission
(via fax) |
Unless otherwise stated, abbreviations and definitions used throughout this announcement shall be the same as those in the announcement in relation to the Proposed Disposal on 10 September 2013.
We refer to the announcement made by the Company on 10 September 2013 in respect of the Proposed Disposal and the letter of query from Bursa Malaysia Securities Berhad ("Bursa Securities") vide its facsimile dated 11 September 2013. The Board of Directors of IRMGB (“Board”) wishes to announce the additional information as required by Bursa Securities pursuant to the query.
Appended herewith the requisite additional information as required by Bursa Securities:-
The effect of the Proposed Disposal on the business operations of IRMSB and the Group. To also elaborate on where will the business operations of IRMSB be undertaken after the Proposed Disposal.
The Proposed Disposal is being undertaken as an interim proposal to raise the cashflow required to repay its bank borrowings and creditors.
Pursuant to the Proposed Disposal, the Company plans to relocate the plant to another location. The Company is addressing and exploring the following matters with regards to the continued operation of this manufacturing business:
(i) A short term rental arrangements with the Purchaser upon completion of the transaction;
(ii) A relocation of the plant to another location in a joint venture arrangement with another partner.
Based on the SPA, the Company has a period of approximately nine (9) months from the date of the SPA to relocate and deliver vacant possession of the Property to the Purchaser.
To tabulate the effects of the Proposed Disposal on the earnings per share and net assets per share.
For illustration purposes only, based on the latest audited consolidated financial statements of IRMGB as at 31 December 2012 and on the assumption that the Proposed Disposal has been affected on that date, IRMGB expects to realise an estimated gain on disposal of approximately RM184,000 after taking into account the carrying amount of the Property and the factory buildings erected thereon for the Financial Year Ended (“FYE”) 31 December 2012 of RM32,766,000 and the estimated expenses relating to the Proposed Disposal of RM1.05 million. This is expected to translate into a very minimal effect in earnings per share of the Group.
The proforma effects on the net assets (“NA”) per share of IRMGB based on the latest audited consolidated financial statements of IRMGB as at 31 December 2012 is as follows:-
 | Audited consolidated as at
31 December 2012 | After the
Proposed Disposal |
| (RM) | (RM) |
| | |
| Share capital | 65,000,000 | 65,000,000 |
| Share premium | 2,062,848 | 2,062,848 |
| Reserves | (34,202,780) | (34,018,780) |
| Total equity / NA | 32,860,068 | 33,044,068 |
| | |
| No. of IRMGB shares | 130,000,000 | 130,000,000 |
| NA per share (RM) | 0.25 | 0.25 |
Note:
The increase in the Reserves is due to the estimated gains on disposal of approximately RM184,000.
The original cost of investment by IRMSB in the Property and the date of such investment.
The Company requires additional time to check its record on the original cost of investment when the property was acquired over 30 years ago. The Property has been subjected to many revaluations since then.
Whether IRMSB is a major subsidiary of IRM Group Berhad.
IRMSB is a major subsidiary of IRMGB despite the suspended operations.
Detail breakdown of the proceeds to be utilised for the repayment of bank loans and creditors, including the timeframe for full utilisation.
The Proposed Disposal is expected to raise gross proceeds of approximately RM34.00 million. The proceeds are envisaged to be utilised in the following manner:-
| Total
RM’000 | Estimated timeframe for utilisation from receipt of the proceeds |
| | |
| Repayment of bank borrowings | 31,500 | Immediate |
| Repayment of creditors | 1,450 | Immediate |
| Defray expenses relating to the Proposed Disposal | 1,050 | Immediate |
| | |
| Total | 34,000 | |
To state the name of the relevant authorities and the timeframe for submission of the application to the relevant authorities.
(i) Two (2) copies of the valuation report will be submitted to Bursa Securities approximately one (1) month from the date of the SPA.
(ii) The application in respect of the Proposed Disposal shall be submitted to Bursa Securities approximately 2 months from the date of the SPA.
(iii) The applications to the State Land Authority and Economic Planning Unit of the Prime Ministers Department for the transfer of the title of the Property will be made as soon as possible.
The estimated timeframe to complete the Proposed Disposal.
Barring any unforeseen circumstances, vacant possession is expected to be completed within nine (9) months from the date of the SPA (or such other extended time to be mutually agreed).
Total size of each of the building erected on the land and the approximate age for each of the building.
The total size of the buildings erected on the land is approximately 94,650 square feet. (excluding the process plant). The approximate age of the buildings are between 15 to 30 years. Newer buildings have been added to the original building throughout the years.
The name of the valuer, date and method of valuation adopted by the valuer and the quantification of the market value, and to also make available the valuation report for inspection.
The Board was guided by the last valuation report on the Property prepared by Irhamy & Co dated 28 September 2012, providing a market value for the Property (comprising the land and buildings), with vacant possession, free from any encumbrances of RM32,970,000. The method of valuation adopted by the valuer was the Comparison and Replacement Cost methods.
The Company has appointed Irhamy & Co to prepare a new valuation report on the Property that complies with the requirements under Paragraph 10.04 of the Main Market Listing Requirements for the purpose of submission to Bursa Securities.
The new valuation report will be made available for inspection at the office of the Company at Block C-3-7, Jalan Dataran SD1, Bandar Sri Damansara, 52200 Kuala Lumpur, Wilayah Persekutuan during normal office hours on any weekday (except public holiday) for a period of three (3) months from the date of the circular to shareholders to be issued.
Particulars of all liabilities to be assumed by the Purchaser arising from the Proposed Disposal.
Save for the obligations and liabilities pursuant to the SPA, there are no other liabilities to be assumed by the Purchaser in relation to the Proposed Disposal.
The highest percentage ratio pursuant to 10.02(g) of the Main Market Listing Requirements.
The highest percentage ratio applicable to the Proposed Disposal as per 10.02(g) of the Main Market Listing Requirements based on the latest audited consolidated financial statements of IRMGB for the FYE 31 December 2012 is the transaction value of the Property compared with NA of IRMGB which amounts to approximately 103.47%.
On a separate matter, the Company wishes to inform that further to the Company’s announcement dated 10 September 2013, the information under the heading “Expected Gains or Losses to the Group” on Page 2 of the attachment should be read as follows:-
EXPECTED GAINS OR LOSSES TO THE GROUP
The expected gain arising from the Proposed Disposal is RM 684,000 after deduction of agent and legal fees and other expenses, tabulated as follows:-
This announcement is dated 13 September 2013. |
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