We refer to the Company's announcement made on 22 February 2021 and would like to furnish the following additional information for further clarification:-
1. As disclosed in Paragraph 2.4 of the announcement, the purchase consideration was arrived at on a “willing buyer willing seller basis” after taking into consideration, inter alia:-
(a) the net assets of the Subject Companies; and
(b) the future earnings potential of the Subject Companies through the management of LOTUS’ assessment of discounted cash flows valuation on the free cash flow to equity of the Subject Companies (“DCF Method”).
The management of LOTUS believes that DCF Method is commonly used for valuation in the plantation industry given the relatively well-documented life cycle.
The purchase consideration is within the range of acceptable costs given the potential income to be generated, therefore the Board of the opinion that the purchase consideration is fair and reasonable.
2. The 1,744.50 acres land is located at Hutan Simpanan Kekal Sokor Taku Kompartment 145, 146, 147, 148, 149, 177 (sebahagian), 199, 200, 201 (sebahagian), Mukim Sokor, Daerah Sokor, Jajahan Tanah Merah, Kelantan Barat. Through the Proposed Acquisition, LPSB would be able to carry out forest plantation activities on the said land.
3. Regarding the Salient Terms of the Agreements:-
Term of payment
Upon execution of the agreement, LPSB shall paid 10% deposit or amounting RM 374,356.50 and balance 90% or amounting RM3,369,208.50 on completion date. Refundable Jabatan Perhutanan Negeri Kelantan (“JPNK’) deposit amounting RM1,418,625 shall be paid to vendor upon receive original receipts.
Completion cost
Completion cost was balance of 90% amounting RM3,369,208.50 and some miscellaneous cost (i.e. professional fee and stamp duty).
Termination clause
In the event that the Conditions Precedent are not fulfilled within the conditional period or such extended period as may be granted by LPSB, LPSB shall be entitled to terminate this Agreement by giving notice and thereupon the Vendor shall refund the deposit to LPSB.
This announcement is dated 24 February 2021.