CHUAN

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TRANSACTIONS (CHAPTER 10 OF LISTING REQUIREMENTS) : NON RELATED PARTY TRANSACTIONS CHUAN HUAT RESOURCES BERHAD (CHRB or the Company) TRANSACTIONS (CHAPTER 10 OF LISTING REQUIREMENTS): NON RELATED PARTY TRANSACTION ON DISPOSAL OF 8,296,800 SHARES OF AMALGAMATED INDUSTRIAL STEEL BERHAD BY CHUAN HUAT HARDWARE HOLDINGS SDN. BHD., A WHOLLY-OWNED SUBSIDIARY OF CHRB TO TELAXIS SDN. BHD

CHUAN HUAT RESOURCES BHD

Type Announcement
Subject TRANSACTIONS (CHAPTER 10 OF LISTING REQUIREMENTS)
NON RELATED PARTY TRANSACTIONS
Description
CHUAN HUAT RESOURCES BERHAD (CHRB or the Company)

TRANSACTIONS (CHAPTER 10 OF LISTING REQUIREMENTS): NON RELATED PARTY TRANSACTION ON DISPOSAL OF 8,296,800 SHARES OF AMALGAMATED INDUSTRIAL STEEL BERHAD BY CHUAN HUAT HARDWARE HOLDINGS SDN. BHD., A WHOLLY-OWNED SUBSIDIARY OF CHRB TO TELAXIS SDN. BHD

1. INTRODUCTION

The Board of Directors of Chuan Huat Resources Berhad is pleased to announce that CHUAN HUAT HARDWARE HOLDINGS SDN. BHD. (Company No. 55068-K) (“CHHH”), a wholly-owned subsidiary of the Company had on 23 September 2019 entered into a Direct Business Transactions (“DBT”) with TELAXIS SDN. BHD. (Company No. 559051-T) (“TSB”). to dispose of 8,296,800 shares of Amalgamated Industrial Steel Berhad (“AISB”) representing 6.03% of the issued share capital of AISB, at RM0.38 per share for a total cash consideration of RM3,152,784 only (“Disposal”).

 

2. INFORMATION ON CHHH AND TSB

2.1 CHHH

CHHH is a company incorporated in Malaysia under the Companies Act 1965 and having its registered office at Wisma Lim Kim Chuan, Lot 50A Jalan 1/89B, 3½ mile off Jalan Sungai Besi, 57100 Kuala Lumpur. The principal activities of CHHH is investment holding.

 

2.2 TSB.

TSB is a company incorporated in Malaysia under the Companies Act 1965 and having its registered office at Unit C-1-7 (Level 3) block C, Menara Uncang Emas (UE3) 85, Jalan Loke Yew, 55200 Kuala Lumpur. The principal activities of TSB is investment holding.

 

3. DETAILS OF THE DISPOSAL

The 8,296,800 shares of Amalgamated Industrial Steel Berhad (“AISB”) is an investment asset of CHHH, A total of 8,409,400 of the shares were acquired in 2011/12 at a total cost RM3,743,542.50. Subsequently 112,600 shares were disposed in 2016/17. The quoted shares were also subjected to impairment losses which resulted a net book value of RM1,909,624 as in the Company’s Quarterly Report on the financial period ended 30 June 2019 announced on 29 August 2019. Hence the net disposal proceed of RM3,146,625 will give rise to a gain on disposal of RM1,237,001.

 

3.1  Basis and Justification for the Consideration

      The Board of Directors of the Company concurs that the agreed price was negotiated and arrived at on a “Willing Buyer Willing Seller” basis and is within a reasonable margin of the

       prevailing market price of the shares

3.2  Arrangement of Satisfaction of the Consideration

      The consideration shall be paid to the Company in the normal trading procedures of Bursa Malaysia Securities via settlement of the completed DBT.

     

4. FINANCIAL EFFECTS OF THE DISPOSAL

    a) The Disposal will not have any effect on the issued and paid-up share capital of the Company and the shareholdings of the substantial shareholders of the Company.  

    b) The gain on the Disposal of RM1,237,001 is expected to have a positive l impact on the earnings per share, net assets per share and gearing of the Group for the financial year

         ending 31 December 2019.

 

5. APPROVALS REQUIRED

    The Disposal is not subject to the approval of the shareholders and any other relevant authorities and is not conditional upon any other corporate exercise undertaken by CHRB.

 

6. INTEREST OF DIRECTORS, MAJOR SHAREHOLDERS OR PERSONS CONNECTED WITH THEM

     None of the Directors, major shareholders and/or persons connected with the Directors or major shareholders of the Company has any interest, direct or indirect, in the Disposal.

 

7. RATIONALE FOR THE DISPOSAL

    The Disposal is a divestment of the investment with the purpose of available fund for other potential future investment.

 

8. STATEMENT BY BOARD OF DIRECTORS

    The Board of Directors of CHRB, after careful deliberation on the Disposal, is of the opinion that the terms of the Disposal are fair and reasonable and that the Disposal is in the best

    interest of the Group.

 

9. RISK FACTORS

    The Board of Directors of CHRB does not foresee any risk factors arising from the Disposal,

 

10. ESTIMATED TIME FRAME FOR COMPLETION

      The Disposal will be completed upon  settlement of the completed DBT.                             

 

11. HIGHEST PERCENTAGE RATIO

The highest percentage ratio applicable to the Disposal pursuant to paragraph 10.06(1) of the Main Market Listing Requirements is 15.71%, based on the audited financial statements as at 31 December 2018.

 

 

This announcement is dated 24 September 2019.

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Announcement Info

Company Name CHUAN HUAT RESOURCES BHD
Stock Name CHUAN
Date Announced 24 Sep 2019
Category General Announcement for PLC
Reference Number GA1-24092019-00045