Proposed acquisition of 510,000 ordinary shares in RZAC Immunesafe Sdn Bhd (RZAC) (Sale Shares), representing 51% of the equity interest in RZAC, from Dato Seri Shahril Bin Mokhtar, Datuk Wan Khalik Bin Wan Muhammad and RZAC Business Sdn Bhd (Vendors) for a total purchase consideration of RM20 million to be satisfied via a combination of cash payment of RM2 million and issuance of 37,800 new ordinary shares in HS Bio Sdn Bhd (HS Bio) at an issue price of approximately RM476 each
| HONG SENG CONSOLIDATED BERHAD |
| Type | Reply to Query | ||||||||||||||||||||||||||||||||
| Reply to Bursa Malaysia's Query Letter - Reference ID | IQL-04102021-00001 | ||||||||||||||||||||||||||||||||
| Subject | Proposed acquisition of 510,000 ordinary shares in RZAC Immunesafe Sdn Bhd (RZAC) (Sale Shares), representing 51% of the equity interest in RZAC, from Dato Seri Shahril Bin Mokhtar, Datuk Wan Khalik Bin Wan Muhammad and RZAC Business Sdn Bhd (Vendors) for a total purchase consideration of RM20 million to be satisfied via a combination of cash payment of RM2 million and issuance of 37,800 new ordinary shares in HS Bio Sdn Bhd (HS Bio) at an issue price of approximately RM476 each | ||||||||||||||||||||||||||||||||
| Description | REPLY TO THE QUERY FROM BURSA MALAYSIA SECURITIES BERHAD ("BURSA SECURITIES")
HONG SENG CONSOLIDATED BERHAD (FORMERLY KNOWN AS MSCM HOLDINGS BERHAD) ("HONG SENG" OR THE "COMPANY") AND ITS SUBSIDIARIES ("HONG SENG GROUP" OR THE "GROUP") - SHARES SALE AGREEMENT FOR THE PROPOSED ACQUISITION OF 51% EQUITY INTEREST IN RZAC IMMUNESAFE SDN BHD |
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| Query Letter Contents | We refer to your Company’s announcement dated 1 October 2021, in respect of the aforesaid matter.
In this connection, kindly furnish Bursa Securities with the following additional information for public release:-
Please furnish Bursa Securities with your reply within one (1) market day from the date hereof.
Yours faithfully LISTING REGULATION
Cc : Market Surveillance Dept., Securities Commission (via fax) |
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We refer to the Company's announcement made on 1 October 2021 (“Announcement”) and the query from Bursa Securities dated 4 October 2021 ("Query") in relation to the Proposed Acquisition of RZAC.
Unless otherwise stated, defined terms used in this reply shall carry the same meanings as defined in the Announcement.
The Company wishes to provide the following additional information pursuant to the Query.
1. Details of the Profit Guarantee provided by the Vendors and HS Bio’s right of recourse in the event the Profit Guarantee is not met.
Reply
As disclosed in Section 2.3.3 (ii) of the Announcement, the Vendors guaranteeing that RZAC shall attain and achieve the sales of 1 million units of Immusafe COVID+ Biochip and a guaranteed profit after taxation of RM40 million within 12 months from 1 October 2021 (“Profit Guarantee”).
In the event the Vendors fail to achieve the Profit Guarantee, HS Bio shall be entitled to reduce the Consideration and consequently the number and value of the Consideration Shares to be allotted and issued and the reduction of the same shall be based on and in proportionate to, amongst others, the actual profit after tax achieved by RZAC calculated up to 30 September 2022. For the avoidance of doubt, in the event the Consideration has been reduced in accordance with this clause, the Cash Consideration must be deducted first from the reduced Consideration and thereafter, the balance Consideration Shares shall be allotted and issued accordingly.
For information purpose, HS Bio’s 51% entitlement from the Profit Guarantee is approximately RM20.40 million.
2. Basis and assumptions of RZAC’s expected profit after taxation of not less than RM40 million within a period of 12 months from 1 October 2021.
Reply
As disclosed in Section 2.5 (i) (b) of the Announcement, RZAC has secured orders and commitments from its customers and it expects to supply 1 million units of the Immusafe COVID+ Biochip test kits to its customers which could generating an estimated revenue of up to RM250 million within a period of 12 months from 1 October 2021. In view of this, RZAC is expected to generate a profit after taxation of not less than RM40 million within a period of 12 months from 1 October 2021 from the said sales.
3. The date of valuation by Crowe Advisory Sdn Bhd (“Crowe”) on the Sale Shares.
Reply
The date of valuation on the Sale Shares by Crowe was as at 30 June 2021 based on the report issued by Crowe on 27 September 2021.
4. Names of RZAC Business Sdn Bhd’s directors and substantial shareholders together with their respective direct and indirect shareholdings.
Reply
As disclosed in Section 2.2 of the Announcement, the directors and shareholders of RZAC Business Sdn Bhd are Dato’ Sri Rayyan Joseph King (with 26% stake in the company) and Tengku Zawyah Binti Tengu Izham (with 74% stake in the company) as set out below:
Their respective direct and indirect shareholdings in RZAC are as follows:
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Announcement Info
| Company Name | HONG SENG CONSOLIDATED BERHAD |
| Stock Name | HONGSENG |
| Date Announced | 05 Oct 2021 |
| Category | General Announcement for PLC |
| Reference Number | GA1-05102021-00022 |