1.         INTRODUCTION

The Board of Directors (“Board”) of Boilermech wishes to announce that the Company has on 23 December 2022 entered into a Share Acquisition Agreement (“SAA”) with Mr Leong Jit Min (“Vendor”) to acquire the remaining 245,000 ordinary shares in TERA representing 35% of the issued and paid-up share capital of TERA (“Sale Shares”) for a total cash consideration of RM8,200,000 (“Purchase Price”) (“Acquisition”). TERA will become a wholly-owned subsidiary of BHB upon completion of the acquisition of 35% shares from Vendor. The Vendor is the main executive director managing the business of TERA and undertakes to continue his executive service with TERA

TERA was incorporated on 11 January 2011, engaged principally in the business of installation of solar green power energy products and electrical machineries products. The issued share capital of TERA is RM700,000 comprising 700,000 ordinary shares.

This is a voluntary announcement under Paragraph 10.05(2) of the Main Market Listing Requirements of Bursa Malaysia Securities Berhad.

2.         PARTICULARS OF THE TRANSACTION

Salient Terms and Conditions of the SAA for 35% Ordinary Shares 

BHB acquires 245,000 ordinary shares (35%) in TERA from the Vendor for a Purchase Price of RM8,200,000, consists of the following: -  

i. On the Completion Date, a sum of Ringgit Malaysia Four Million (RM4,000,000.00) shall be payable by BHB to the Vendor; and

ii. The balance Purchase Price of Ringgit Malaysia Four Million Two Hundred Thousand (RM4,200,000.00) shall be retained as security for the profit guarantee provided by the Vendor, and shall be dealt with in accordance to the terms and conditions stipulated in the SAA. The Vendor shall be permitted to replace or substitute the Security Retention Sum with marketable securities of equivalent value; subject to terms and conditions which are acceptable to BHB.

Source of Fund

The Acquisition will be financed through internally generated funds.

3.         DETAILS OF THE CONSIDERATION

Basis and justification of arriving at the Purchase Price 

The Purchase Price of RM8,200,000 is derived at on a willing buyer-willing seller basis, and taking into consideration the profit guarantee by the Vendor as stated in item No. 2(ii). 

The Vendor shall be liable to compensate BHB in proportion of the profit shortfall in the event that the aggregate profit of TERA for the entire guaranteed period is less than the guaranteed amount.

4.         RATIONALE OF THE ACQUISITION

Solar energy is one of the long-term growth areas in renewable energy and climate change related technologies. It is also a major energy source to enable Malaysia and other Asean countries in their transition towards Net Zero targets.

The Acquisition is part of BHB’s growth strategy in developing sustainable environmental solutions. It is also in line with BHB Group’s effort in streamlining its shareholding structure in TERA.

5.         INTEREST OF DIRECTORS, MAJOR SHAREHOLDERS AND PERSON CONNECTED

None of the Directors and/or major shareholders of the Company and/or any persons connected to them have any interest, direct or indirect, in the transaction.

This announcement is dated 23 December 2022.