1.          INTRODUCTION

Reference is made to the Joint Venture Cum Shareholders Agreement dated 12 October 2021 (“JVSA”) entered into between MCE VENTURES SDN. BHD. (“MVSB”), its wholly owned subsidiary and CHONGQING BEIDOU JIEAN NEO-ENERGY TECHNOLOGY LTD.  (“BDJA”).

The Board of Directors of MCE HOLDINGS BERHAD (“MCE” or “the Company”) wishes to announce that MVSB has taken action and terminated the JVSA with immediate effect (the “Termination”).

2.          RATIONALE FOR THE TERMINATION

The termination of the JVSA was effected arising from non-fulfillment of the obligations under the JVSA. Under clause 7.1 of the JVSA, BDJA has an obligation to invest in the JVC by way of subscribing for 1,400,000 shares in the JVC at an issue price of MYR 1.00 each per share. Pursuant to clause 3.1 of the JVSA, the subscription of the shares by the parties to the JVSA is to be undertaken within 90 days from the date of the JVSA or extended days as may be agreed mutually by the parties. 

Pursuant to Clause 3.1, BDJA had requested for numerous extensions of time in order for them to fulfil their obligations, with the latest extended deadline being 30th August 2022.

MVSB has fulfilled its obligations under the JVSA by subscribing for 599,999 shares at an issue price of MYR 1.00 per share in the JVSA on 18 May 2022.

Despite the numerous extensions granted and also the numerous reminders, BDJA has, to date, failed to fulfil its obligations to subscribe and pay in full for its 70% equity interest in the JVC.  BDJA has also not given any commitment on a timeframe to meet its obligations. Both parties were also unabled to reach a consensus to move forward.

As such, MVSB has decided to take pro-active actions and terminate the JVSA. The termination of the JVSA will enable MVSB and MCE to pursue other opportunities that may arise going forward.  

3.          FINANCIAL EFFECTS OF THE TERMINATION

The cost incurred by the Group is minimal comprised of the cost to incorporate and maintain the JVC. The share capital of the JVC upon incorporation contributed by MVSB was RM1.00 and MVSB had further made a capital injection of RM599,999.00 into the JVC to meet its obligations under the JVSA.

The Termination will not have any material effect on the issued and paid up capital, net assets and earnings of the Company for the financial year ended 31 July 2022 and financial year ending 31 July 2023.

4.          INTEREST OF DIRECTORS, MAJOR SHAREHOLDERS AND PERSONS CONNECTED TO THEM

None of the directors, substantial shareholders and/or persons connected to such directors and substantial shareholders of the Company have any interest, direct or indirect, in the Termination.

5.          APPROVALS REQUIRED

The Termination is not subject to the approval of shareholders of the Company or any relevant authorities.

6.          STATEMENT BY THE BOARD OF DIRECTORS

Taking into consideration all aspects of the Termination all members of the Board of Directors are of the opinion that the Termination is in the best interest of the Group.

This announcement is dated 22 November 2022.