News

TAN CHONG MOTOR HOLDINGS BERHAD ("TCMH" or the "Company")Proposed Issuance of up to RM600 Million Nominal Value Asset-Backed Medium Term Notes Programme by Premium Commerce Berhad ("PCB" or "Issuer")

Contents :

1.0 INTRODUCTION

On behalf of the Board of Directors of the Company, Commerce International Merchant Bankers Berhad (“CIMB”) is pleased to announce that the Company intends to undertake a securitisation exercise (“Proposed Securitisation Exercise”), involving the sale by its wholly owned subsidiary, Tan Chong & Sons Motor Co Sdn Bhd (“Originator or TCSM”) to PCB of certain auto hire purchase receivables (“Hire Purchase Receivables”) and a programme for the proposed issuance of up to RM600 million nominal value asset-backed medium term notes (“MTN” or “Notes”) by PCB (“Proposed ABS Issue”).

2.0 The Proposed Securitisation Exercise
PCB, a bankruptcy remote special purpose vehicle (“SPV”) set up for the Proposed Securitisation Exercise will issue MTN to investors in the Malaysian debt capital markets, the proceeds of which will be utilised to purchase pools of specifically identified Hire Purchase Receivables from TCSM. The Hire Purchase Receivables are originated in TCSM’s ordinary course of business from time to time. The pools of Hire Purchase Receivables will back the MTNs issued. The indicative principal terms and conditions of the Proposed ABS Issue are set out below.

3.0 Indicative Principal Terms and Conditions of the Proposed ABS Issue

A summary of the principal terms and conditions of the Proposed ABS Issue is as per Table I attached.

4.0 Brief Information on the Issuer

The Issuer was incorporated as a private limited company under the Companies Act 1965 on 12 April 2004. Subsequently it was converted into a public company on 21 April 2004. The authorised and paid-up share capital of the Issuer as at 31 May 2004 were RM100,000 and RM2.00 respectively.

The directors of the Issuer are Lui Kwee Hui and Tan Beng Hong and the share trustee of the Issuer is Malaysian Trustees Berhad, who holds the shares in the Issuer under a discretionary trust for the benefit of certain Malaysian entities including Malaysian charities. The Issuer was incorporated as an SPV to undertake an asset securitisation exercise and its principal activity is operating a business of: (i) acquiring from TCSM, Hire Purchase Receivables originated by TCSM in its ordinary course of business, which will include TCSM’s rights, interests and title in and to the relevant hire-purchase agreements under which the receivables are originated and all collateral security, guarantees and insurance and other rights, title and benefits in connection thereto including any proceeds from recoveries, fees and other charges (collectively, “Property”) on such terms, conditions and consideration and at such times as the Directors of the Issuer may deem fit; and

(ii) implementing an asset securitisation programme to issue asset-backed private debt securities to acquire the Property from TCSM on such terms and conditions (if any) as may be thought fit by the Directors of the Issuer.

5.0 Brief Information on the Originator

TCSM was incorporated on 16 February 1959 as a private company limited by shares. TCSM is a wholly-owned subsidiary of TCMH, a company listed on the Main Board of Bursa Malaysia Securities Berhad. TCSM holds the exclusive distributorship and assembly rights of Nissan-make vehicles in Malaysia. As part of its strategy to diversify its revenue base and to provide comprehensive service to Nissan customers, TCSM also undertakes auto-related activities including hire purchase and insurance businesses. Sales and marketing of Nissan-make vehicles are, primarily, undertaken by its authorised dealer, Edaran Tan Chong Motor Sdn Bhd, a related company of TCSM.

TCSM provides after-sales support for Nissan customers through spare part centers throughout the country and its main service dealer is Tan Chong Ekspres Auto Servis Sdn Bhd, another related company. The assembly of completely knocked-down Nissan-make vehicles is undertaken by Tan Chong Motor Assemblies Sdn Bhd (“TCMA”) in Segambut. TCSM’s subsidiaries include Ragib TC Security Services Sdn Bhd, TC Hartanah Sdn Bhd, TCMA and Nissan TCM Pty Ltd.

6.0 Utilisation of Proceeds

 The proceeds obtained by TCSM from the sale of Hire Purchase Receivables to the Issuer pursuant to the Proposed Securitisation Exercise shall be used for general working capital requirements of TCSM and its affiliates, from time to time as the need arises.

7.0 Directors’ and substantial shareholders’ interests

None of the directors or substantial shareholders of the TCMH nor persons connected with them has any interest, direct or indirect, in the Proposed Securitisation Exercise.

8.0 Approvals for the Proposed Securitisation Exercise

The Proposed Securitisation Exercise is subject to the approval of the Securities Commission (“SC”) and other relevant authorities/parties, if required.

9.0 Directors’ Recommendation

The Board of TCMH, after careful deliberation, is of the opinion that the Proposed Securitisation Exercise is in the best interest of TCMH.

10.0 Submission to Regulatory Authorities

 All necessary applications to the regulatory authorities in relation to the Proposed Securitisation Exercise will be made within three (3) months from the date of this announcement.

11.0 Departure from the SC’s Guidelines

The Proposed Securitisation Exercise is to be implemented in accordance with the relevant SC’s Guidelines.

12.0 Appointment of Principal Adviser/Lead Arranger

CIMB has been appointed as the Principal Adviser and Lead Arranger/Lead Manager for the Proposed Securitisation Exercise.

This announcement is dated 21 June 2004.

Announcement Info

Attachments

1. TCHONG_210604.pdf (Size: 21,248 bytes)