Bursa Announcements

Contents :

Introduction

Tan Chong Motor Holdings Berhad (“TCMH”) wishes to announce that on 17 January 2005, Tan Chong Trading (Malaysia) Sdn. Bhd. (“TCT”), a wholly-owned subsidiary of TCMH, has entered into an Agreement for Sale and Purchase of Shares (“SPA”) for the acquisition of 10,200,000 fully paid ordinary shares (“Sale Shares”) of RM1.00 each representing the entire issued and paid-up share capital in Constant Knight (M) Sdn. Bhd. (“CK”) at a total cash consideration of RM7,600,000 (“Purchase Consideration”).

Information on TCT

TCT was incorporated as a private limited company under the Companies Act, 1965, on 7 August 1987. The authorised share capital of TCT is RM50,000,000 comprising 25,000,000 ordinary shares of RM1.00 each and 25,000,000 redeemable preference shares of RM1.00 each. The issued and paid up capital of TCT is RM26,170,000 comprising 1,170,000 ordinary shares of RM1.00 each and 25,000,000 redeemable preference shares. The principal activity of TCT is distribution of automotive parts and property/investment holding.

Information on CK

CK was incorporated as a private limited company under the Companies Act, 1965, on 21 February 1991. The authorised share capital of CK is RM25,000,000 comprising 25,000,000 ordinary shares of RM1.00 each. The issued and paid up capital of CK is RM10,200,000 comprising 10,200,000 ordinary shares of RM1.00 each. CK is the registered owner of a piece of industrial land situated in Mukim of Serendah, District of Ulu Selangor, State of Selangor and measuring in area of approximately 60 acres with a leasehold period of 99 years expiring on 22 March 2094 (the “Land”).

Basis of arriving at the Purchase Consideration

The Purchase Consideration of RM7,600,000 for the Acquisition was arrived at on a willing buyer-willing seller basis after taking into consideration the valuation of the Land conducted on 20 May 2004 by C H Williams Talhar & Wong, an independent firm of registered valuers of RM7.35 million and therefore has no bearing to the value of CK’s issued and paid-up capital..

Salient Terms of the SPA

1. The vendors agreed to sell and TCT agreed to purchase the Sale Shares free from encumbrances and with all rights attached thereto upon and subject to the terms and conditions contained in the SPA.


2. The Purchase Consideration is to be satisfied in the following manner:-

a. RM760,000 shall be paid upon execution of the SPA as deposit and part payment of the Purchase Consideration; and
b. RM6,840,000, being balance of the Purchase Consideration, shall be paid within 3 months from the date the SPA becoming unconditional or such later date as the vendors and TCT may mutually agree in writing.

3. The SPA is conditional upon the following being obtained or satisfied within 3 months from the date of the SPA or such other period as the vendors and TCT may mutually agreed in writing:-

a. the Foreign Investment Committee (“FIC”)’s approval being obtained and if conditions are imposed, such conditions are acceptable to TCT; and
b. TCT being satisfied with the results of the due diligence on the financial condition of CK.

Rationale for the Acquisition

The Acquisition is for the purpose of TCMH Group’s future business expansion.

Source of Funding

The Acquisition will be financed from internally generated fund of TCT.

Financial Effects of the Proposed Acquisition

The Acquisition will not have any material effect on the earnings and net tangible assets of TCMH Group for the current financial year ending 31 December 2005.

Approvals

The Acquisition is not subject to the approval of TCMH shareholders but is conditional upon the FIC’s approval as mentioned above.

Directors’ and Substantial Shareholders’ Interest

None of the Directors or substantial shareholders of TCMH, or persons connected with the Directors or substantial shareholders, has any interest, direct or indirect, in the Acquisition.

Directors’ Opinion

The Directors of TCMH are of the opinion that the Acquisition is in the best interest of TCMH.