| General Announcement |
| Reference No JC-080205-60777 |
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| Type |
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Announcement |
| Subject |
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PROPOSED DISPOSAL OF SHARES IN KPJ HEALTHCARE BERHAD |
Contents :
KPJ HEALTHCARE BERHAD ("KPJ" OR "COMPANY")
PROPOSED DISPOSAL BY PHARMACARE SDN BHD ("PHARMACARE"), A WHOLLY-OWNED SUBSIDIARY OF KPJ, OF 95.83% OF THE EQUITY INTEREST IN SEJAHTERA FARMA SDN BHD ("SFSB") COMPRISING 172,500 ORDINARY SHARES OF RM1.00 EACH FOR A CASH CONSIDERATION OF RM130,000
("PROPOSED DISPOSAL")
This announcement is dated 5 February 2008.
1. INTRODUCTION
The Board of Directors of KPJ ("Board")wishes to announce that the Company's wholly-owned subsidiary, Pharmacare ("Vendor"), had on 5 February 2008 entered into a conditional Sale and Purchase Agreement ("SPA")with Fuzianna binti Ibrahim ("Purchaser"), to dispose 172,500 ordinary shares of RM1.00 each in SFSB ("Sale Shares") for a cash consideration of RM130,000.
2. INFORMATION ON SFSB
SFSB was incorporated in Malaysia on 5 November 1994 as a private limited company under the Companies Act, 1965 under the name of Malaysian Retirement Home Sdn Bhd and assumed its present name on 8 May 2003. The principal activity of SFSB is the retailing of pharmaceutical products under the name of Malaysian Retirement Home Sdn Bhd and assumed its present name on 8 May 2003 and its principal place of business is located at Lot C4, Block C, Level 1, Pusat Bandar Damansara, 50490 Kuala Lumpur. As at the date of this announcement, SFSB has an authorised share capital of RM500,000 comprising 500,000 ordinary shares of RM1.00 each ("Shares"), of which 180,000 shares have been issued and are fully paid-up.
SFSB's audited net liabilities as at 31 December 2006 amounted to RM49,277. SFSB recorded an audited net loss after tax of RM25,110 for the financial year ended 31 December 2006.
3. PROPOSED DISPOSAL
3.1 Salient terms of the SPA
The salient terms of the SPA are as follows:- (a) The Vendor agrees to sell and the Purchaser agrees to purchase the Sale Shares for a cash consideration of RM130,000 ("Purchase Price") free from all charges, liens or any other encumbrances with all rights attaching thereto subject to all the terms and conditions contained in the SPA;
(b) The Purchase Price shall be paid to the Vendor in the following manner:-
(i) Deposit of RM78,279.00 immediately upon execution of the SPA which is payable by cash the sum of RM25,000.00 and stock and furniture and fittings the sum of RM53,279.00;
(ii) Balance Purchase Price I of RM20,000.00 within one (1) month of the date of the SPA; and
(iii) Balance Purchase Price II of RM31,721.00 within two (2) months of the date of the SPA.
(c) The original share certificates in respect of the Sale Shares and the duly executed share transfer forms and any related transfer documents in respect of the Sale Shares are to be placed with the Purchaser by the Vendor within seven (7) days of the Completion Date;
(d) This Agreement is conditional upon the following:-
(i) each Party (if it is a body corporate) obtaining the approval from their respective Board of Directors for acquisition of the Sale Shares;
(ii) if necessary, each Party obtaining the approval from their respective shareholders for the disposal and/ or acquisition of the Sale Shares; and
(iii) the Purchaser, at her own cost and expense, obtaining the approval from the Foreign Investment Committee ("FIC")for the acquisition of the Sale Shares.
(e) In the event that either of the parties defaults in the performance of its obligations and covenants, the non-defaulting party shall be entitled to the remedy of specific performance against the defaulting party and unless otherwise decided by the non-defaulting party, an alternative remedy or monetary compensation shall not be sufficient compensation for the non-defaulting party;
(f) The SPA will be terminated if any one party -
(i) commits any material breach of its obligations under the SPA and shall fail to take all necessary action to remedy such breach within fourteen (14) days from the service of any written notice by any other party complaining of such breach;
(ii) shall go into voluntary liquidation otherwise than for the purpose of reconstruction or amalgamation or an order of court is made for its compulsory liquidation or being an individual shall become bankrupt or have a receiving order made against any of its assets;
(iii) shall have the receiver appointed over the whole or any part of its undertaking or assets;
(iv) shall be subject to a change in the beneficial ownership of its shares such that those currently owning the majority of its shares cease to own the majority;
then in any such event the other party without prejudice to such other rights and remedies as they may have, shall be entitled to terminate the SPA in its entirety by notice in writing to the other party.
3.2 Basis of Arriving at Purchase Price
The Purchase Price of RM130,000 was arrived at on a willing buyer willing seller basis taking into consideration the financial position and performance of SFSB.
4. PROPOSED UTILISATION OF PROCEEDS
The net proceeds from the Proposed Disposal of RM76,721 will be utilised for working capital of KPJ.
5. ORIGINAL COST OF INVESTMENT
The Vendor's original cost of investment in SFSB is RM172,500, which was incurred on 10 February 2003.
6. RATIONALE FOR THE PROPOSED DISPOSAL
SFSB is principally involved in the retailing of pharmaceutical products.
KPJ is mainly involved in the provision of healthcare services through its network of specialist hospitals and with the disposal of SFSB will allow KPJ to concentrate on this core business.
7. EFFECTS OF THE PROPOSED DISPOSAL
7.1 Share Capital and Substantial Shareholders
The Proposed Disposal will not have any effect on the issued and paid-up share capital of KPJ and the shareholdings of the substantial shareholders in KPJ.
7.2 Earnings per Share ("EPS")
The Proposed Disposal is not expected to have a material effect on the EPS of the KPJ Group for the financial year ending 31 December 2008.
7.3 Net Assets ("NA")
The Proposed Disposal will not have any material effect on the net assets of the KPJ Group.
7.4 Gearing
The Proposed Disposal is not expected to have any material effect on the gearing position of the KPJ Group.
7.5 Dividend
The Proposed Disposal is not expected to have any material effect on the policy of the Company in recommending dividends to its shareholders
8. APPROVALS REQUIRED
The Proposed Disposal is conditional upon the approvals mentioned in Section 3.1(d) being obtained.
9. ESTIMATED TIME FRAME FOR COMPLETION
Barring any unforeseen circumstances, the parties expect to complete the Proposed Disposal by end of April 2008.
10. DIRECTORS' AND SUBSTANTIAL SHAREHOLDERS' INTERESTS
None of the directors or substantial shareholders of KPJ or persons connected with them has any interest, direct or indirect, in the Proposed Disposal.
11. DIRECTORS' STATEMENT
Having considered all aspects of the Proposed Disposal, the Board is of the opinion that the Proposed Disposal is in the best interests of the KPJ Group in the long term.
12. DEPARTURE FROM THE SC'S POLICIES AND GUIDELINES ON ISSUE/OFFER OF SECURITIES ("SC GUIDELINES")
To the best knowledge of the Board, the Proposed Disposal does not depart from the SC Guidelines.
13. DOCUMENTS FOR INSPECTION
The SPA dated 5 February 2008 is available for inspection at the registered office of KPJ at 13th Floor, Menara Johor Corporation, Kotaraya, 80000 Johor Bahru, Johor Darul Takzim, during normal office hours from Mondays to Fridays (except public holidays) for a period of three (3) months commencing from the date of this announcement.
