1. Introduction

The Board of Directors (“Board”) of Minetech is pleased to announce that the Company has on 15 June 2023 entered into a Shares Sale Agreement (“SSA”) with Ms Shia Fui Kin (“Vendor”) for the purpose of acquisition of 720,000 ordinary shares in Minetech Asphalt Man International Sdn Bhd (“MAMI”) representing 15% of the issued and paid-up share capital of MAMI (“Sale Shares”) for a total purchase consideration of RM3,550,000.00 only (“Purchase Consideration”) (“Acquisition”). Upon completion, MAMI shall become a wholly-owned subsidiary of the Company.

2. Details of the Acquisition/MAMI

MAMI is a private limited company incorporated in Malaysia and having its business address at D-G-5, Block D, Parklane Commercial Hub, No. 21, Jalan SS7/26, Kelana Jaya, 47301 Petaling Jaya, Selangor Darul Ehsan. MAMI is a 85%-owned subsidiary of Minetech and the remaining 15% equity interest in MAMI is currently held by Ms Shia Fui Kin. The Directors of MAMI are Mr Chin Leong Choy, Encik Azlan Shah Bin Zainal Arif and Mr Lee Inn Chean. MAMI is engaged in the business of manufacturing and trading of bituminous products.

The summary of unaudited financial information of MAMI for the financial period ended (“FPE”) 31 March 2023 is set out as below:-

3. Salient Terms of the SSA

(a) Acquisition

Vendor agrees to sell and the Company agrees to purchase the Sale Shares:-

(i) free from all liens, charges and encumbrances and with full legal and beneficial title;

(ii) with all rights attaching thereto (including all dividends and distributions (if any) declared in respect thereof) with effect from the date of completion of the sale and purchase of Sale Shares by the performance by the Vendor and the Company ("parties”) of their respective obligations as set out in the SSA (“Completion”);

(iii) on the basis of the warranties (“Warranties”); and

(iv) shall include all of the rights, privileges and obligations attached to the shares of MAMI.

(b) Warranties and Exclusion of Liability

Vendor warrants to the Company that up to Completion:-

(i) that the Vendor has not been adjudicated as a bankrupt and there are no bankruptcy proceedings being commenced and/or instituted by any person against the Vendor.

(ii) the facts in relation to the Vendor as set out in the SSA are true and correct.

(iii) the SSA constitutes the valid and binding obligation of the Vendor enforceable in accordance with the terms.

(iv) the Sale Shares are fully paid-up ordinary shares of MAMI and represent fifteen per centum (15%) of the issued and paid-up capital of MAMI and there is only one class of shares issued by MAMI.

(v) the Vendor has the full power to enter into and carry out the provisions of the SSA and any other agreements contemplated by the Vendor in accordance with the terms.

(vi) there is, and at Completion, will be no pledge, lien or other encumbrance on, over or affecting Sale Shares and no agreement or arrangement to give or create any such encumbrance and no claim has been or will be made by any person to be entitled to any interest in or over Sale Shares; and

(vii) the Warranties, are as at the date of the SSA and will immediately before Completion in respect of the facts then existing be true and accurate in all respects.

Basis of Warranties are set out as follows:-

(i) Each of the Warranties is without prejudice to any other warranty or undertaking and, except where expressly stated, no warranty contained in the SSA governs or limits the extent or application of any other warranty.

(ii) Each of the Warranties is deemed to be given as at the date of the SSA and to be repeated immediately before Completion in relation to the facts then existing.

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4. Basis and Justification of Arriving at the Purchase Consideration

The Purchase Consideration was arrived based on negotiations and mutual agreement between both parties after taking into consideration of MAMI’s unaudited net tangible assets of RM8,167,959 as of 31 March 2023 and future earnings projection.

The Purchase Consideration shall be paid by the Company in the following manner:-

(a) Within 14 days upon the execution of the SSA, the sum of RM355,000.00 shall be paid to the solicitors; and

(b) The balance of RM3,195,000.00 (“Balance Consideration”) shall be made payable to the solicitors by the Completion Date which is three (3) calendar months from the date of the SSA, or such other date as may be agreed upon between the parties upon which Completion is to take place.

In the event that the Purchase Consideration is not paid as stipulated above, such outstanding sum shall carry a late payment interest of 8% per annum calculated on daily basis, from the expiry of the respective payment due date until the date the full payment is made.

The Purchase Consideration will be funded through internally generated funds.

5. Rationale/ Purpose of the Acquisition

The Acquisition represents a strategic opportunity for the Company to recognise the entire profit from MAMI in the Group’s financial statements, given the high demand of the products sold by MAMI. The Acquisition is expected to contribute positively to the future financial position of Minetech Group.

6. Liabilities to be assumed

There are no liabilities, including contingent liabilities and guarantees to be assumed by the Company arising from the Acquisition.

7. Financial Effects of the Acquisition

i. Share Capital and Substantial Shareholders’ shareholdings

The Acquisition will not have any effect on the issued and paid-up share capital and the substantial shareholders’ shareholdings of Minetech Group as it does not involve any issuance of new shares by Minetech Group.

ii. Earnings Per Share

The Acquisition is not expected to have any material effect on the earnings per share of Minetech Group for the financial year ending 31 March 2024.

iii. Net Assets Per Share and Gearing

The Acquisition will not have any material effect on the net assets per share and gearing of Minetech Group.

8. Risk Factors

The Company does not expect any material risk arising from the SSA other than the normal operational risk associated with the SSA, which Minetech would take appropriate measures to minimise it.

9. Highest Percentage Ratio Applicable to the Acquisition

The highest percentage ratio applicable to the Acquisition is 6.29% based on the total assets of MAMI compared against the total assets of Minetech for the FPE 31 March 2022 of RM183,978,810.

10. Approvals Required

The Acquisition is not subject to the approval of the shareholders of Minetech and any other regulatory authorities.

11. Directors and/or Major Shareholders’ Interest and/or persons connected with them

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

12. Directors’ Statement

The Board of Minetech, after having considered all aspects of the SSA, is of the view that the Acquisition is in the best interest of the Company.

13. Estimated Time Frame for Completion

The completion of Acquisition will take place upon satisfaction of the conditions as set out in the SSA.

14. Documents for Inspection

The SSA is available for shareholders’ inspection at the registered office of the Company at 12th Floor, Menara Symphony, No. 5, Jalan Professor Khoo Kay Kim, Seksyen 13, 46200 Petaling Jaya, Selangor Darul Ehsan during normal business hours from Monday to Friday (except for public holidays) for a period of three (3) months from the date of this announcement.

This announcement is dated 15 June 2023.