HLA - Sale of Business and Assets of Rex Plastics (Malaysia) Sdn. Bhd.
6 September 2017, 12:01:00 am
The Board of Directors of Hong Leong Asia Ltd. (the "Company", and together with its subsidiaries, the "Group") wishes to announce that Rex Plastics (Malaysia) Sdn. Bhd. ("Rex Plastics Malaysia"), a wholly-owned subsidiary of the Company, has entered into a sale and purchase agreement (the "Agreement") with Viscount Plastics (Malaysia) Sdn Bhd (the "Purchaser") for the sale of its business and assets, for a cash consideration of Ringgit Malaysia (RM) 10,800,000 (the "Consideration") (which is equivalent to approximately S$3.5 million, based on the exchange rate of RM1.00: S$0.3202) upon the terms and conditions of the Agreement (the "Disposal").
The principal business of Rex Plastics Malaysia, incorporated in Malaysia, are those relating to the manufacturing and sale of plastic containers and related products. The Consideration for the Disposal, which is subject to adjustments, as provided in the Agreement, is comprised of the following:
(i) RM6,500,000 for the business and assets; and
(ii) RM4,300,000 for the inventory stock.
The Consideration was arrived at on a "willing-buyer, willing-seller" basis and at a premium of approximately 16% of the net value of the assets to be disposed. The Disposal is not expected to have any material impact on the net tangible assets of the Group or earnings per share of the Company.
In accordance with the Agreement, the Purchaser shall pay 10% of the Consideration as a deposit to Rex Plastics Malaysia upon execution of the Agreement. The remaining 90% of the Consideration shall be paid on the date of completion of the Disposal which is on 2 December 2017, subject to the fulfilment of conditions precedent as set out in the Agreement.
By Order of the Board
Hong Leong Asia Ltd.
Ng Siew Ping, Jaslin
6 September 2017