| Contents | 1. INTRODUCTION
The Board of Directors of the Company is pleased to announce that its wholly owned subsidiary, DIH has on 24 March 2010 entered into two Share Sale Agreements ("SSA") with Mr. Ho Wee Peng of 42A, Komplek Hijau Kuning, Lebuhraya Sultan Abdul Halim, 05400 Alor Setar, Kedah, Malaysia and Ms. Anong PhuangThong of 119/13 On-Nuch 61 Soi, Junction 2-1, On-Nuch Road, Pravate, Bangkok 10250, Thailand (hereinafter collectively called “the Vendors”) to acquire 22,060 ordinary shares and 2,440 ordinary shares of Thai Bath 100 each respectively (hereinafter collectively called “Sale Shares”), representing in total 12.25% equity interest in DXN Thailand for a total cash consideration of Thai Baht 6,247,500 (equivalent to approximately RM640,591).
Existingly, DIH holds 36.75% equity interest in DXN Thailand and upon the completion of this acquisition, DIH’s equity interest will increase from 36.75% to 49% and making DIH being the single largest shareholder in DXN Thailand. Accordingly, DXN Thailand will be treated as a subsidiary of DIH by virtue of board control in DXN Thailand.
2. INFORMATION ON DXN THAILAND
DXN Thailand is a limited company incorporated in Thailand on 25th June 1998 under the Thai Civil and Commercial Code and has an authorised capital of Thai Baht 20,000,000 divided into 200,000 ordinary shares of Thai Baht 100 each. DXN Thailand is principally involved in the business of import and distribution of the consumable health and nutrition products.
Currently, DXN Thailand has four directors as per Appendix 1.
Dato’ Dr Lim Siow Jin, Datin Leong Bee Ling and Mr Tan Young Tat are the nominated directors from DIH.
3. SALIENT DETAILS OF THE SHARE SALE AGREEMENT
(i) The sale and purchase of the Sale Share herein shall be deemed to be one whole transaction and shall not be segregated in any way.
(ii) Except as otherwise provided in the SSA, in the event that either of the parties shall default in the performance of its obligations and covenants in the SSA, the other party shall be entitled to the remedy of specific performance against the defaulting party and all rights and remedies flowing therefrom.
(iii) The vendor covenant and give the personal guarantee to indemnify DIH that there are no liabilities nor of any corporate guarantee given to any party except for those disclosed in the financial statement.
4. THE PURCHASE CONSIDERATION
Total Purchase Consideration of Thai Baht 6,247,500 (equivalent to approximately RM640,591) is calculated based on management account net tangible assets value of Thai Baht 255 per ordinary share of DXN Thailand as at 28 February 2010 and shall be satisfied by cash upon the execution of a valid and registrable share transfer documents.
5. ORIGINAL COST OF INVESTMENT
(i) Mr. Ho Wee Peng is a substantial shareholder holding 22,060 ordinary shares representing 11.03% direct interest in DXN Thailand, he will dispose all his shareholdings to DIH. The details of original cost of his investment are listed out as in Appendix 2.
(ii) Ms. Anong PhuangThong is a substantial shareholder holding 25,490 ordinary shares representing 12.75% direct interest in DXN Thailand, she will dispose 2,440 shares to DIH. The details of original cost of her investment are listed out as in Appendix 3.
6. RATIONALE FOR THE ACQUISITION
The acquisition is expected to contribute positively to the Group’s consolidation profits in long run as DXN Thailand is a profitable business entity.
7. FINANCIAL EFFECTS OF THE ACQUISITION
7.1 Share Capital
The acquisition will not have any direct effect on the share capital of DXN.
7.2 Earnings
The acquisition is not expected to have any material effect on the consolidated earnings of DXN and its group of companies for the financial year ending 28 February 2011.
7.3 Substantial Shareholders’ Shareholding
The acquisition will not have any effect on the substantial shareholders’ shareholdings of DXN.
7.4 Net Assets (“NA”)
The acquisition will not have any material effect on the consolidated NA value of DXN and its group of companies for the year ending 28 February 2011.
7.5 Effect On The Gearing
The acquisition will not have any effect on the gearing of DXN.
8. DIRECTORS’ AND SUBSTANTIAL SHAREHOLDERS’ INTEREST
Saved as per the above disclosure, none of the DXN's Directors, substantial shareholders and persons connected to the Directors and substantial shareholders of DXN has any interest in the acquisition.
9. STATEMENT BY THE BOARD OF DIRECTORS
Having considered all aspects of the acquisition, the Board of Directors is of the opinion that the acquisition is in the best interest of the DXN Group.
10. COMPLETION OF ACQUISITION
The acquisition is expected to be completed by end of May 2010.
11. APPROVALS REQUIRED
The acquisition is not subjected to approvals of any governmental authority or/and the shareholders of DXN.
12. THE PERCENTAGE RATIO APPLICABLE TO THE TRANSACTION PURSUANT TO PARAGRAPH 10.02(g)
The highest percentage ratio for the above Acquisition is 0.44%.
13. DOCUMENTS AVAILABLE FOR INSPECTION
The SSA is available for inspection at the registered office of DXN at Suite 2-1, 2nd Floor, Menara Penang Garden, 42A Jalan Sultan Ahmad Shah, 10050 Penang for a period of fourteen (14) days from date of this Announcement during normal business hours from Mondays to Fridays (except public holidays).
Yours faithfully
DXN HOLDINGS BERHAD
-signed-
_______________________
Lim Boon Yee
Managing Director |
APPENDIX 1 | Name of Director | Date of appointment | | Dato’ Dr Lim Siow Jin | 17 November 1998 | | Datin Leong Bee Ling | 22 November 1999 | | Tan Young Tat | 11 March 2010 | | Pattamaporn Sae-Eung | 11 March 2010 |
APPENDIX 2 Date of Allotment | No. of shares Allotted | Par Value Thai Baht | Cumulative Cost Thai Baht | 12 February 2003 | 1 | 100 | 100 | 3 June 2003 | 9 | 100 | 1,000 | 7 March 2005 | 22,050 | 100 | 2,206,000 |
APPENDIX 3 Date of Allotment | No. of shares Allotted | Par Value Thai Baht | Cumulative Cost Thai Baht | 19 January 1999 | 2,549 | 100 | 254,900 | 3 June 2003 | 22,941 | 100 | 2,549,000 |
|