Contents :

1.0 INTRODUCTION

The Board of Directors of Asiatic is pleased to announce the following:
 

1.1 Proposed Share Acquisition

ALDSB, a subsidiary of Asiatic, had on 11 October 2002 entered into a Conditional Share Sale Agreement ("Conditional SSA") with ABSB for the acquisition of 75,000 ordinary shares of RM1.00 each ("Sale Shares") representing 30% equity interest in AIDSB from ABSB for a purchase consideration of RM77,319,000; and
 

1.2 Proposed Land Disposal

AIDSB, a subsidiary of Asiatic, had on 11 October 2002 entered into a Conditional Land Sale Agreement ("Conditional LSA") with ABSB for the disposal of approximately 953 acres of land located at Mukim Senai-Kulai, Daerah Johor Bahru, Johor Darul Takzim ("Land") to ABSB for a sale consideration of RM82,707,000.

2.0 INFORMATION ON AIDSB, ALDSB AND ABSB

2.1 AIDSB

AIDSB is a private limited company incorporated in Malaysia under the Companies Act, 1965 on 15 April 1994 with an authorised share capital of 250,000 ordinary shares of RM1.00 each and an issued and paid-up share capital of 250,000 ordinary shares of RM1.00 each.

The existing shareholders of AIDSB are:

AIDSB is a subsidiary of ALDSB which in turn is a wholly owned subsidiary of Asiatic. It is principally involved in property development. Its principal assets comprise parcels of freehold land measuring approximately 1,592 acres in Mukim Senai-Kulai, Daerah Johor Bahru, Johor Darul Takzim, which forms part of the property development project known as Indahpura. It also holds options to purchase additional 5,103 acres of development land in the same vicinity.


2.2 ALDSB

ALDSB, a wholly owned subsidiary of Asiatic, was incorporated in Malaysia under the Companies Act, 1965 on 3 December 1991 with a present authorised and issued and paid-up share capital of RM500,000 and RM250,000 respectively. It is principally involved in property development and currently owns a total land bank of approximately 7,100 acres mainly targeted for mixed development at various locations in Peninsular Malaysia.


2.3 ABSB

ABSB is a private limited company incorporated in Malaysia under the Companies Act, 1965 on 24 January 1994 and its principal activity is investment holding. It has an authorised share capital of 100,000 ordinary shares of RM1.00 each and an issued and paid-up share capital of 2 ordinary shares of RM1.00 each.


 

3.0 DETAILS OF THE PROPOSAL
 

3.1 Proposed Share Acquisition


3.1.1 Purchase Consideration
 

The purchase consideration of RM77,319,000 was arrived at on a
"willing-buyer willing-seller" basis after taking into consideration the fair value of the assets in AIDSB and the unexercised options held by AIDSB to purchase additional 5,103 acres of development land in Indahpura.

3.1.2 Net Book Value / Original Cost of Investment

Based on the information provided by the ABSB, the net book value of the Sale Shares as at 30 June 2002 is RM75,000 and the original cost of investment of the Sale Shares is RM75,000. The investment on the Sale Shares were made over a period between 1994 and 1996.

3.1.3 Salient Features of the Conditional SSA

(a) The Proposed Share Acquisition is interdependent upon the completion of the Proposed Land Disposal and it is subject to the following conditions being satisfied within 6 months from the date of the Conditional SSA:
 

i) the approval of Foreign Investment Committee being obtained; and

ii) any other approvals from the relevant authorities as may be required.

(b) The purchase consideration for the Sale Shares will be paid in the following manner:

i) RM100,000 was paid upon execution of the Conditional SSA; and

ii) the remaining balance of RM77,219,000 will be paid within 6 months from the date of obtaining the last of the approvals from the relevant authorities.

3.2 Proposed Land Disposal

3.2.1 Details of the Land

	Description of Land	Acres
(i)	Part of land held under Master Title Geran No. G8100, Lot No. 1789, Mukim Senai-Kulai, District of Johor Bahru	751.44
(ii)	Part of land held under Master Title Geran No. G8296, Lot No. 2422, Mukim Senai-Kulai, District of Johor Bahru	66.47
(iii)	Part of land held under Master Title Geran No. G6781, Lot No. 2192, Mukim Senai-Kulai, District of Johor Bahru	23.72
(iv)	Part of land held under Master Title Geran No. G6887, Lot No. 2313, Mukim Senai-Kulai, District of Johor Bahru	102.30
(v)	Part of land held under Master Title Geran No. G8154, Lot No. 2423, Mukim Senai-Kulai, District of Johor Bahru	0.52
(vi)	Part of land held under Master Title Geran No. G6451, Lot No. 2230, Mukim Senai-Kulai, District of Johor Bahru	8.55
	Total	953.00

3.2.2 Sale Consideration

The sale consideration for the Proposed Land Disposal of RM82,707,000 was arrived at based on a "willing-buyer willing-seller" basis after taking into consideration of the valuation report prepared by Appraisal Property Consultant (M) Sdn Bhd dated 4 April 2002, which valued the Land at similar amount.

3.2.3 Net Book Value / Original Cost of Investment

As at 30 June 2002, the net book value of the Land including other related costs to Asiatic is RM13.55 million whilst the original cost of the Land to Asiatic is approximately RM7.11 million. The Land was purchased in 1983 by Asiatic.

3.2.4 Salient Features of Conditional LSA
 

(a) The Proposed Land Disposal is interdependent upon the completion of the Proposed Share Acquisition and it is subject to the following conditions being satisfied within 6 months from the date of the Conditional LSA:

i) the approval of Foreign Investment Committee being obtained; and

ii) any other approvals from the relevant authorities as may be required.

(b) The sale consideration for the Proposed Land Disposal will be received as follow:

i) RM100,000 was received upon the signing of the Conditional LSA; and

ii) the remaining balance of RM82,607,000 will be received upon the completion date which shall be on or before the expiry of 6 months from the date of the receipt of the approvals from the relevant authorities or the receipt of the titles to the Land, whichever is the later.


3.3 Deeds of Settlement
 

In conjunction with the Proposed Share Acquisition and the Proposed Land Disposal, the following deeds of settlement were entered into on the same day:

(i) A deed of settlement between ALDSB, AIDSB and ABSB whereby ALDSB will pay to AIDSB for the Land on behalf of ABSB up to RM77,319,000 and in doing so, ALDSB will be deemed to have settled the cash consideration owing to ABSB for the Sale Shares. ALDSB in turn will settle the amount owing to AIDSB of RM77,319,000 through netting of partially from its advances to AIDSB which stands at RM103,997,583 as at 30 June 2002; and

(ii) A deed of settlement between AIDSB and ABSB for the settlement of ABSB's advance of RM5,388,000 to AIDSB through netting of partially from the cash consideration due from ABSB of RM82,707,000 for the Proposed Land Disposal.

4.0 RATIONALE OF THE PROPOSALS
 

The proposals will enable Asiatic to increase its equity stake in AIDSB from 70% to 100% at a reasonable cost in view of AIDSB owning some 1,592 acres of development land in Indahpura and holding options to purchase additional 5,103 acres of development land in the same vicinity. Indahpura, a mixed township development project to be developed over a period of 30 years, was launched in 1996. The profit contribution from the additional equity stake acquired is expected to enhance and improve the overall earnings and returns of Asiatic Group in the coming years.

5.0 FINANCIAL EFFECTS OF THE PROPOSALS
 

5.1 Proposed Share Acquisition

5.1.1 Share Capital and Substantial Shareholders' Shareholding


The Proposed Share Acquisition will not have any effect on the issued and paid-up share capital or the substantial shareholders' shareholding in the Company.


5.1.2 Earnings

The Proposed Share Acquisition is not expected to have a material impact on the earnings of the Asiatic Group for the current financial year ending 31 December 2002 as the Proposals are expected to be completed in the next financial year. However, the write-off of goodwill arising from the Proposed Share Acquisition of RM49.22 million would result in reduction in earnings per share by 6.64 sen upon completion.

5.1.3 Net tangible assets ("NTA")

As a result of the write-off of goodwill arising from the Proposed Share Acquisition of RM49.22 million, the NTA of the Asiatic Group will be reduced by 6.64 sen based on the audited consolidated balance sheet as at 31 December 2001.
 

5.2 Proposed Land Disposal

5.2.1 Share Capital and Substantial Shareholders' Shareholding


The Proposed Land Disposal will not have any effect on the issued and paid-up share capital or the substantial shareholders' shareholding in the Company.


5.2.2 Earnings

The Proposed Land Disposal is not expected to have a material impact on the earnings of the Asiatic Group for the current financial year ending 31 December 2002 as the Proposals are expected to be completed in the next financial year. However, the net profit arising from the Proposed Land Disposal after minority interest is approximately RM40.38 million and the earnings per share would increase by 5.45 sen upon completion.


5.2.3 NTA

Based on the audited consolidated balance sheet as at 31 December 2001, the NTA per share of the Asiatic Group would increase by 5.45 sen.
 

5.3 Net Financial Effects of the Proposals


The Proposals will result in net loss after minority interest of approximately RM8.84 million and reduction in earnings per share of 1.19 sen. Based on the audited consolidated balance sheet as at 31 December 2001, the NTA per share of the Asiatic Group would reduce by 1.19 sen upon completion of the Proposals.

 

6.0 DIRECTORS' AND MAJOR SHAREHOLDERS' INTERESTS

ABSB is a related party of Asiatic since it is a major shareholder of AIDSB, a subsidiary of Asiatic. However, there are no conflict of interest arising from the Directors and major shareholders for both the Proposed Share Acquisition and Proposed Land Disposal. Accordingly, the Proposals are not subject to shareholders' approval.

Save as disclosed above, none of the Directors and Substantial Shareholders of Asiatic nor persons connected with them has any interest, direct or indirect, in the Proposals.

7.0 DIRECTORS' OPINION ON THE PROPOSALS
 

The Board of Directors of Asiatic, after due consideration of all aspects of the Proposals, is of the opinion that the Proposals are in the best interests of Asiatic.
 

8.0 ESTIMATED TIME FRAME FOR COMPLETION
 

The Proposals are expected to be completed within 6 months upon execution of the Conditional SSA and Conditional LSA.

9.0 DEPARTURE FROM THE SECURITIES COMMISSION'S ("SC")
GUIDELINES
 

The Board of Directors of Asiatic is not aware of any departure from the SC's Policies and Guidelines on Issue/Offer of Securities in respect of the Proposals.

10.0 DOCUMENTS FOR INSPECTION
 

The Conditional SSA, the Conditional LSA and the Deeds of Settlement will be made available for inspection at the Company's registered office at 24th Floor, Wisma Genting, Jalan Sultan Ismail, 50250 Kuala Lumpur during normal office hours (except for public holidays) for a period of one (1) month from the date of this announcement.

By Order of the Board
TAN WOOI MENG
Secretary
Asiatic Development Berhad