IQZAN HOLDING BERHAD ("IQZAN" OR "COMPANY")
- SHARE SALE AGREEMENT IN RELATION TO THE PROPOSED ACQUISITION OF 2,508,690 ORDINARY SHARES, REPRESENTING 51% OF THE TOTAL ISSUED AND PAID-UP SHARE CAPITAL IN HK KITARAN SDN. BHD. BY NEXUS APPLAUSE SDN. BHD., A WHOLLY-OWNED SUBSIDIARY OF THE COMPANY ("PROPOSED ACQUISITION")

We refer to IQZAN’s announcement dated 16 May 2024 in respect of the aforesaid matter.

In this connection, kindly furnish Bursa Securities with the following additional information for public release:

1. Further clarification on the principal business activities of HK Kitaran, including the nature of oil palm biomass materials and the value added products manufactured, and the details of the transportation business.
2. The detailed basis to arrive at the purchase consideration of RM6,121,020 and taking into consideration that the audited Net Assets of HK Kitaran for FYE 2023 is RM5,119,631. 
3. The details of the PE ratio analysis to determine the purchase consideration, and the information on the PE ratio pursuant to the Proposed Acquisition as compared to the comparable companies of HK Kitaran.
4. The cash and bank balances and short-terms deposits of the Group based on the latest audited financial statements and latest quarterly financial results to justify the source of funds for the Proposed Acquisition via internally generated funds. 
5. Taking into consideration that the paid-up capital of NASB of RM1 and pursuant to the terms of the Share Sale Agreements, the purchase consideration will be satisfied via cash and new ordinary shares to be issued by Iqzan (“Consideration Shares”). In this regard, to specify the breakdown of the purchase consideration to be satisfied by cash and Consideration Shares respectively, and the basis to determine the issue price of the Consideration Shares. 
6. The reason for the profit guarantee amount guaranteed by the Vendor is based on 49% of the total profit guarantee amount, instead of the entire net profit amount of RM3,000,000. 
7. Whether the profit guarantee provided is realistic and reasonable, taking into consideration of the historical performance of HK Kitaran which recorded an audited Net Profit of RM2,470,671 for FYE 2023, and the future prospects of HK Kitaran. 
8. Whether the Proposed Acquisition tantamount to a diversification in operations of Iqzan Group pursuant to Paragraph 10.13 of the Main Market Listing Requirements and the justification, taking into  consideration of the principal business activities of HK Kitaran and its latest audited Net Assets and Net Profits.

9. To clarify whether the Proposed Acquisition is part of the Group’s regularisation plan to address the PN17 status. If no, to clarify whether there are any extraneous factors which warrant the interim corporate proposal, and if without such interim corporate proposal, it would adversely affect the Group’s ability to regularize its condition.

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)