HWGB

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TRANSACTIONS (CHAPTER 10 OF LISTING REQUIREMENTS) : NON RELATED PARTY TRANSACTIONS HO WAH GENTING BERHAD ("HWGB" OR THE "COMPANY") (I) PROPOSED ACQUISITION BY HWG FINTECH PROPERTY SDN. BHD., AN INDIRECT WHOLLY-OWNED SUBSIDIARY OF HWGB, OF PROPERTIES, COMPRISING OF: (A) 8 UNITS OF SERVICE APARTMENT LOCATED WITHIN VORTEX SUITES & RESIDENCES @ KLCC FOR A PURCHASE CONSIDERATION OF RM7,410,000; AND (B) 11 UNITS OF CONDOMINIUM LOCATED WITHIN RESIDENSI ISKANDAR FOR A PURCHASE CONSIDERATION OF RM7,842,000 (II) PROPOSED AMENDMENTS TO THE CONSTITUTION OF HWGB

HO WAH GENTING BERHAD

Type Announcement
Subject TRANSACTIONS (CHAPTER 10 OF LISTING REQUIREMENTS)
NON RELATED PARTY TRANSACTIONS
Description
HO WAH GENTING BERHAD ("HWGB" OR THE "COMPANY")

(I)	PROPOSED ACQUISITION BY HWG FINTECH PROPERTY SDN. BHD., AN INDIRECT WHOLLY-OWNED SUBSIDIARY OF HWGB, OF PROPERTIES, COMPRISING OF:

(A)	8 UNITS OF SERVICE APARTMENT LOCATED WITHIN VORTEX SUITES & RESIDENCES @ KLCC FOR A PURCHASE CONSIDERATION OF RM7,410,000; AND 

(B)	11 UNITS OF CONDOMINIUM LOCATED WITHIN RESIDENSI ISKANDAR FOR A PURCHASE CONSIDERATION OF RM7,842,000

(II)	PROPOSED AMENDMENTS TO THE CONSTITUTION OF HWGB

We refer to the previous announcements in relation to the Proposals and the announcement dated 23 September 2022 in relation to the Termination Agreements ("Announcements"). Unless otherwise defined, the definitions set out in the Announcements shall apply herein. 

 

On behalf of the Board, Kenanga IB wishes to announce additional information in relation to the Termination Agreements:

 

1. The salient terms of the Termination Agreements, including the status of the deposit paid

 

The salient term in the Termination Agreements are as follows:

 

"In consideration of the mutual premises and releases contained in the termination agreement, the parties mutually agree to terminate the CSPA with effect upon the execution of the termination agreement by the parties.” 

 

The Company is awaiting for the refund of deposit paid under the CSPA. 

 

2. The financial impact of the Termination Agreements to the Company

 

As a result of the Termination Agreements, HWGB is expected to incur additional losses of approximately RM450,000 for the financial year ending 30 April 2023, being the professional and advisory fees paid and / or to be incurred which should be debited to the RCPS upon issuance had the Proposals carried on.

 

3. The rationale for terminating the SPA with Vendor A and Vendor B

 

At the point of execution of the CSPA, it was envisaged that with the easing of COVID-19 restrictions and many countries fully resuming business activities and re-open their borders, the global economy would once again recover strongly. However, recently the global economy has been highly volatile, amidst continuous hike in interest rate together with the weakening of the Ringgit and global currencies against US Dollar.

 

The rising interest rate environment is faster than what has been anticipated earlier and the continuous hike in interest rate resulted in the increase cost of living, which the Company is concerned that it will dampen demand for the rental market in coming years. In addition, the continuous weakening of the Ringgit leading to inflationary pressure may also negatively impact the property market's recovery in the coming years.

 

With the recent uncertainty in the global economies as well as the rising interest rate environment, the proposed property investment may result in lower-than-expected yield, which would be detrimental to shareholders' value in future. 

 

This announcement is dated 27 September 2022.

 






Announcement Info

Company Name HO WAH GENTING BERHAD
Stock Name HWGB
Date Announced 27 Sep 2022
Category General Announcement for PLC
Reference Number GA1-27092022-00011