SGD15,000,000 comprising of 15,000,000 ordinary shares; and SGD801,687,663 comprising of 651,687,663 Redeemable Convertible Preference Shares.

Transcription

1 KENANGA INVESTMENT BANK BERHAD ACQUISITION OF THE REMAINING 1,350,000 ORDINARY SHARES, REPRESENTING 27% OF THE TOTAL NUMBER OF ISSUED SHARES OF KENANGA DEUTSCHE FUTURES SDN BHD 1. INTRODUCTION The Board of Directors ( Board ) of Kenanga Investment Bank Berhad ( KIBB ) wishes to announce that KIBB has on 16 May 2017 entered into a Share Purchase Agreement ( SPA ) with Deutsche Asia Pacific Holdings Pte Ltd ( DAPH ) to acquire the remaining 1,350,000 ordinary shares representing 27% of the total number of issued shares ( Sale Shares ) of Kenanga Deutsche Futures Sdn Bhd ( KDF ), a 73%-owned subsidiary of KIBB, at the purchase consideration as detailed in paragraph 4(a) and subject to the terms and conditions as stipulated in the SPA ( Proposed Acquisition ). Upon completion of the Proposed Acquisition, KDF will become a wholly-owned subsidiary of KIBB. 2. INFORMATION ON DAPH a. DAPH was incorporated in Singapore under the Singapore Companies Act, Cap.50 on 12 December The principal activity of DAPH is that of an investment holding company. Its issued and paid-up share capital as at 15 May 2017, being the latest practicable date prior to this announcement ( LPD ), stood at: SGD15,000,000 comprising of 15,000,000 ordinary shares; and SGD801,687,663 comprising of 651,687,663 Redeemable Convertible Preference Shares. b. DAPH is a substantial shareholder of KIBB with an equity interest of 8.20% and is a wholly-owned subsidiary of DB Valoren S.A.R.L. c. As at LPD, the following are the directors of DAPH: i. Chandra Mallika (Chairman); ii. Lee Sooi Chuen Philip; iii. Andrew Denzil Martin; iv. Aarti Gulati; and v. Chong Ser Siew Philip. Page 1 of 6

2 3. INFORMATION ON KDF a. KDF was incorporated in Malaysia under the Companies Act, 1965 on 2 August It is principally involved in the futures broking business. Its issued share capital as at LPD stood at RM5,000,000 comprising 5,000,000 ordinary shares. b. As at LPD, the shareholders and directors of KDF are as follows: Shareholders Name Number of Shares Held in KDF Percentage KIBB 3,650,000 ordinary shares 73% DAPH 1,350,000 ordinary shares 27% Total 5,000,000 ordinary shares 100% Directors i. Mr. Luigi Fortunato Ghirardello (Chairman)^ ii. Encik Izlan Bin Izhab^ iii. Mr. Michael James Connolly* iv. Cik Azila Binti Abdul Aziz v. Mr. Lee Kok Khee vi. Mr. Lum Chee Wah ^ Encik Izlan Bin Izhab is the Chairman/ Independent Non-Executive Director of KIBB, while Mr. Luigi Fortunato Ghirardello is an Independent Non-Executive Director of KIBB with an equity interest of 0.02%. * Mr. Michael James Connolly is the nominee of DAPH on the Board of KDF. 4. SALIENT TERMS OF THE SPA The salient terms of the Proposed Acquisition are as set out below. a. Purchase Consideration Purchase consideration is at the net tangible assets ( NTA ) per share of KDF as at 31 December 2016, based on the audited financial statements of KDF (and adjusted after taking into consideration any change in the NTA per share between 31 December 2016 and the last day of the calendar month immediately preceding the Completion Date based on the management accounts of KDF), multiplied by the number of Sale Shares ( Consideration Price ). Page 2 of 6

3 For illustrative purposes, based on 31 December 2016 audited financial statements of KDF, the Consideration Price will be RM10 million. Note: Completion Date shall mean (5) Business Days from the date of fulfilment of the last Conditions Precedent or such other date agreed to between DAPH and KIBB in accordance with the SPA. b. Conditions Precedent i. Notwithstanding anything to the contrary as set out in the SPA, completion of the Proposed Acquisition shall be subject to the satisfaction of the following conditions precedent on or before the expiry of the three (3) months from the date of the SPA (or such other date as agreed in writing by DAPH and KIBB): aa. Approval The approval from the Securities Commission Malaysia ( SC ) to be obtained by KDF, for the change of the shareholder in KDF arising from the sale and purchase of the Sale Shares. bb. Resolution DAPH shall submit to KIBB certified extracts of circular resolution/ minutes of meeting of the Board of DAPH approving the execution and the performance of the transactions contemplated by the SPA, including in particular approval for the transfer of the Sale Shares from DAPH to KIBB. cc. Director s Resignation The nominee director of DAPH sitting on the Board of KDF to provide a resignation letter to take effect from the completion of the sale and purchase of the Sale Shares, including a statement that such director confirms that he has no claims whatsoever against KDF (or any of its offices, employees, and directors), and to the maximum extent permissible under law, irrevocably waives any such claims. ii. If any of the conditions precedent has not been satisfied or waived in accordance with the SPA within three (3) months from the date of entering into the SPA (or such other date as agreed in writing by DAPH and KIBB), either party may terminate the SPA. Page 3 of 6

4 c. Completion i. On the Completion Date, upon delivering the completion documents to KIBB, the Consideration Price shall be paid to DAPH. ii. All stamp and/or transfer duty and taxes payable on the transfer of the Sale Shares shall be paid by KIBB. KIBB shall procure the updating of the Register of Members and the Register of Transfers of KDF reflecting KIBB as the owner of the Sale Shares. iii. Upon completion of the sale and purchase of the Sale Shares, the Shareholders Agreement between KIBB and DAPH governing the relationship between both parties in relation to KDF shall be terminated immediately. iv. The word DB, Deutsche and Deutsche Bank shall be removed from KDF s name, branding and marketing materials, including any reference to the name Deutsche Bank AG and its subsidiaries and affiliates, and such effort shall be completed within four (4) months from the Completion Date. 5. SOURCE OF FUNDING The Proposed Acquisition will be funded by internal generated funds of KIBB. 6. ASSUMPTIONS OF LIABILITIES As the Proposed Acquisition is in the form of share purchase, no liabilities of KDF shall be transferred to KIBB, including contingent liabilities and guarantees upon completion of the Proposed Acquisition. 7. RATIONALE The Proposed Acquisition will allow KIBB to have full control over KDF enabling efficient decision making process and allowing KIBB to take a long-term strategy. Page 4 of 6

5 8. EFFECTS OF THE TRANSACTION a. Issued Share Capital and Substantial Shareholders Shareholdings The Proposed Acquisition will not have any effect on the issued share capital and the substantial shareholders shareholdings of KIBB as the Consideration Price will be satisfied in cash and does not involve any issuance of shares by KIBB. b. Net Assets ( NA ) Per Share and Gearing The Proposed Acquisition will have an immediate positive effect on the NA per share of KIBB as the Consideration Price is at NTA. Furthermore, the Proposed Acquisition is expected to contribute positively to the NA per share of KIBB in the longer term. The Proposed Acquisition will not have any effect on the gearing of KIBB as the investment will be funded by internally generated funds of KIBB. c. Earnings and Earnings Per Share The Proposed Acquisition will have an immediate positive effect on the earnings and earnings per share of KIBB as KDF is expected to generate profit for the Financial Year Ending 31 December PROSPECT OF KDF As the holding company of KDF, KIBB is supportive of KDF s commitment to grow its core business segment of foreign institutions to trade in Bursa Malaysia Derivatives Berhad listed products and to continuously entice and build interests among domestic corporations, institutions and retail clients. In addition, KIBB supports KDF s expansion plan to diversify its revenue mix and to grow its domestic clientele base by providing access to trade on global derivatives exchange. The Proposed Acquisition will provide KIBB with complete autonomy over KDF and allow KIBB to fully support their business growth plans moving forward. 10. APPROVAL REQUIRED The Proposed Acquisition is not subject to the approval of the shareholders of KIBB. However, it is subject to the approval from the SC at KDF level as any change in controller (holding not less than 15% of voting shares) requires the SC s approval. Page 5 of 6

6 The application for the approval is targeted to be submitted within two (2) weeks from the date of this announcement. 11. INTERESTS OF DIRECTORS, MAJOR SHAREHOLDERS AND PERSONS CONNECTED TO THEM None of the Directors and other major shareholders and/or persons connected to them have any interest, direct or indirect, in the Proposed Acquisition. 12. DIRECTORS STATEMENT Having considered all aspects of the Proposed Acquisition, the Board of KIBB 1 is of the opinion that the Proposed Acquisition is in the best interest of KIBB Group. 13. HIGHEST PERCENTAGE RATIO The highest percentage ratio applicable to the Proposed Acquisition pursuant to Paragraph 10.02(g) of the Listing Requirements is 2.47%. 14. ESTIMATED TIME FRAME FOR COMPLETION Barring any unforeseen circumstances, subject to the fulfilment of all conditions as set out in the SPA and the required approvals being obtained, the Proposed Acquisition is expected to be completed within three (3) months after entering into the SPA (or such other date as agreed in writing by KIBB and DAPH). 15. DOCUMENTS AVAILABLE FOR INSPECTION The SPA will be made available for inspection at the registered office of KIBB at Level 17, Kenanga Tower, 237, Jalan Tun Razak, Kuala Lumpur, Wilayah Persekutuan, during normal business hours from Mondays to Fridays (except public holidays) for a period of three (3) months from the date of this announcement. This announcement is dated 16 May By virtue of Encik Izlan Bin Izhab, being the Chairman of KIBB and the Director of KDF, and Mr. Luigi Fortunato Ghirardello, being the Director and shareholder of KIBB with shareholding of 0.02% and the Chairman of KDF, they have abstained from the deliberation and decision making in respect of the Proposed Acquisition at the Board of KIBB. Page 6 of 6