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DOLPHIN

0.105

+0.005 (+5%)

DISPOSAL OF PROPERTY BY DOLPHIN ENGINEERING (M) SDN. BHD., A WHOLLY-OWNED SUBSIDIARY OF DOLPHIN INTERNATIONAL BERHAD TO LYL ENGINEERING SDN. BHD. ("PROPOSED DISPOSAL")

DOLPHIN INTERNATIONAL BERHAD

Type Reply to Query
Reply to Bursa Malaysia's Query Letter - Reference ID IQL-28092018-00001
Subject DISPOSAL OF PROPERTY BY DOLPHIN ENGINEERING (M) SDN. BHD., A WHOLLY-OWNED SUBSIDIARY OF DOLPHIN INTERNATIONAL BERHAD TO LYL ENGINEERING SDN. BHD. ("PROPOSED DISPOSAL")
Description
DOLPHIN INTERNATIONAL BERHAD ("DIB" OR "THE COMPANY")

REPLY TO QUERIES FROM BURSA MALAYSIA SECURITIES BERHAD DATED 28 SEPTEMBER 2018 IN RELATION TO THE PROPOSED DISPOSAL OF PROPERTY BY DOLPHIN ENGINEERING (M) SDN BHD ("DESB"), A WHOLY OWNED SUBSIDIARY OF DIB (REFERRED TO AS "PROPOSED DISPOSAL")
Query Letter Contents

We refer to your Company’s announcement dated 26 September 2018, in respect of the aforesaid matter.
In this connection, kindly furnish Bursa Securities with the following additional information for public release:-

1)      Reasons for the delay of approximately 22 days to make an immediate announcement upon the signing of agreement on 4 September 2018.

2)      Further information on the Property, including but not limited to the tenure, age of building, built up area, existing use and whether there is any impact to the Company on the operational work arising from the Proposed Disposal.

3)      Whether any valuation carried out on the Property, if so, the name of the valuer, date and method of valuation, the market value, if any.

4)      Further justification as to how the Sales Consideration of RM5,000,000 was arrived at after taking into consideration the property market and the valuation in Item 3 above.

5)      The other salient terms of the SPA, including the conditions precedents and termination clauses.

6)      To confirm on whether the proceeds from the Proposed Disposal are for working capital and bank borrowings and to state the timeline for full utilisation together with the detailed breakdown of the proposed utilisation for the working capital.

Please furnish Bursa Securities with your reply within one (1) market day from the date hereof.

 

Yours faithfully,
IRWAN JOHARI
Assistant Vice President, Issuers,
Listing, Regulation
/TEK

Cc : Market Surveillance Dept. , Securities Commission (via fax)

1. DESB received the executed copy stamped on 19 September 2018 via email on 21 September 2018. 

2. Append below the additional information on the Property.

Tenure

Freehold

Age of building

25 years

Built up area

805.84 square metres

Existing used

Workshop assembly of our products and storage place.

Impact on operational work

The disposal will not affect the day-to-day operational work.

3. There was no formal valuation being conducted in connection with the Proposed Disposal.

4. The Purchase Price for the Proposed Disposal was arrived at on a "willing-buyer willing-seller" basis after the negotiation process and taking into consideration the following:-

a. current conditions and location of the Property;

b. the original cost of investment of the Property; and

c. the latest selling price of similar property that had been sold for RM5.080 million (based on brickz research data).

5. The salient terms of SPA include, amongst others, the following:

​5.1.1​​​​​​​ LYL Engineering Sdn Bhd (“LYLE”) has prior to the execution of the SPA paid or caused to be paid the Earnest Deposit to Real Estate Agency as stakeholders. The Real Estate Agency are irrevocably and unconditionally authorised to release the Earnest Deposit to DESB upon execution of the SPA.

5.1.2 LYLE shall simultaneously with the execution of the SPA pay to Purchaser’s Solicitors the Retained Sum equivalent to 3% of the Purchase Price as required under the Real Property Gains Tax Act, 1976 (“RPGTA”) and DESB the Balance Deposit which together with the Earnest Deposit shall be jointly referred to as the Deposit and shall form part payment towards the Purchase Price.

5.1.3 LYLE shall pay or cause to be paid to DESB's Solicitors as stakeholders the Balance Purchase Price within ninety (90) days from the date of the SPA (“the Completion Deadline”).

5..1.4 In the event that LYLE is unable for any reason whatsoever to pay or cause to be paid to DESB's Solicitors as stakeholders the Balance Purchase Price or any part thereof on or before the Completion Deadline, DESB shall grant to LYLE an automatic extension of time till the Extended Completion Deadline in which to pay the Balance Purchase Price or any part thereof provided always that LYLE shall pay to DESB interest on the Balance Purchase Price or any part thereof outstanding at the rate of eight per centum (8%) per annum calculated daily commencing on the date following immediately after the Completion Deadline till the date the Balance Purchase Price is fully paid.

5.1.5 Simultaneously with the execution of the SPA, DESB shall execute and deposit with LYLE’s Solicitors as stakeholders a valid and registrable Transfer in favour of LYLE.

5.1.6 LYLE’s Solicitors are irrevocably and unconditionally authorised to and shall:-

a) submit the Transfer for adjudication of the stamp duty payable on the Transfer and present the same for stamping but shall not present the Transfer to the land registry or office for registration until LYLE has paid or cause to be paid to DESB’s Solicitors as stakeholders the Balance Purchase Price and the interest if any payable on the Balance Purchase Price, in accordance with the terms herein; and

5.1.7 Vacant possession of the Property shall be delivered by DESB to LYLE within five (5) Business Days from the date of full payment of the Balance Purchase Price and interest, if any payable on the Balance Purchase Price and the apportioned Outgoings, failing which DESB shall pay to LYLE interest at the rate of eight per centum (8%) per annum on the Purchase Price calculated on a day to day basis from the date of such receipt of the Purchase Price together with interest (if any) by DESB’s Solicitors until the actual date of delivery of vacant possession of the Property by DESB to LYLE.

5.1.8 In the event of default of DESB to complete the sale and LYLE has observed and complied with all the terms and conditions on its part herein contained, LYLE shall be entitled either to the remedy at law for specific performance against DESB or to terminate the SPA by notice in writing to DESB.

5.1.9 In the event that LYLE fails to pay the Balance Purchase Price or any part thereof or the interest if any payable on the Balance Purchase Price on or before the Completion Deadline or Extended Completion Deadline DESB shall be entitled to terminate the SPA by written notice to LYLE.

5.1.10 On the termination of the SPA:-

a. the Deposit shall be forfeited to the absolute benefit of DESB;

b. LYLE shall deliver or caused to be delivered to DESB, the Transfer and the Title if already delivered to LYLE’s Solicitors or the solicitors for LYLE’s Financier with DESB’s interest intact and all other documents that may have been delivered to LYLE under the terms herein except if the Transfer has been adjudicated and stamped then LYLE’s Solicitors shall retain the Transfer and surrender the Transfer to the relevant Stamp Office for cancellation and refund of the stamp duty paid by LYLE; and

c. DESB shall simultaneously with the performance by LYLE of Clause 5.1.10 (b) above refund to LYLE all monies paid to DESB by LYLE under the terms of the SPA save and except for the Deposit free of interest;

thereafter, the SPA shall be null and void and of no further effect and neither parties hereto shall have any further claim against the other in respect hereof save for any antecedent breach of the SPA

6. A total of RM5.0 million from the proceeds of the Proposed Disposal will be allocated for working capital to finance our day-to-day operation and bank borrowing as detailed below:-

 

Proposed Utilisation

RM’000

Timeline

Overdraft facility

4,500

1 month

Estimated expenses in relation to the disposal (Agent fee, RPGT, legal fee, miscellaneous)

0,327

3 months

Operating expenses (administrative overheads)

0,173

 3 months

TOTAL

5,000

 





Announcement Info

Company Name DOLPHIN INTERNATIONAL BERHAD
Stock Name DOLPHIN
Date Announced 01 Oct 2018
Category General Announcement for PLC
Reference Number GA1-01102018-00062