PROPOSED ACQUISITION OF ENTIRE ISSUED AND PAID-UP SHARE CAPITAL OF SIME FINANCE BERHAD (COMPANY NO:4736-U) BY MAYBAN FINANCE BERHAD (COMPANY NO: 3905-T)

Oct 29, 1999 Back
Type Announcement
Subject MALAYAN BANKING BERHAD (COMPANY NO:3813-K)
PROPOSED ACQUISITION OF ENTIRE ISSUED AND PAID-UP SHARE CAPITAL OF SIME FINANCE BERHAD (COMPANY NO:4736-U) BY MAYBAN FINANCE BERHAD (COMPANY NO: 3905-T)

Contents :


1. INTRODUCTION

Aseambankers Malaysia Berhad (“Aseambankers”) (Company No: 15938-H), on behalf of the Board of Directors of Malayan Banking Berhad (“Maybank” or “the Bank”), is pleased to announce that Mayban Finance Berhad (“Mayban Finance”), a wholly owned subsidiary company of Maybank, has entered into a Sale and Purchase Agreement with Sime Bank Berhad ("SBB”) (Company No: 3404-T) on 29 October 1999 for the acquisition of the entire issued and paid-up share capital of Sime Finance Berhad ("SFB”).

The necessary approvals under the Banking and Financial Institutions Act, 1989 (“BAFIA”) were obtained from the Ministry of Finance (“MOF”) and Bank Negara Malaysia (“BNM”) on 23 September 1999 for Mayban Finance to enter into the Sale and Purchase Agreement with SBB and for the proposed acquisition of SFB.

The acquisition was proposed with the view of eventually merging the operations of SFB with Mayban Finance.

2. DETAILS OF THE PROPOSED ACQUISITION
The Sale and Purchase Agreement sets out the proposed acquisition of the entire issued and paid-up share capital of SFB of RM200,000,000 comprising 2,000,000 ordinary shares of RM100 each for a cash consideration to be determined based on the adjusted Net Tangible Assets ("NTA") as at 30 June 1999 as determined by the appointed auditor ("Proposed Acquisition").

Within seven (7) days of the execution of the Sale and Purchase Agreement, Mayban Finance shall deposit with its Solicitors Messrs. Nik Saghir & Ismail ("Stakeholder") a sum of RM10 million ("Initial Deposit") to be held as Stakeholder and to be released in accordance with the terms stipulated in the Sale and Purchase Agreement.

The shares in SFB will be acquired free from all claims, charges, liens, equity encumbrances and adverse interests and with all rights attached thereto together with all dividends rights, bonus issues and distributions declared in respect thereof as from the completion date of the Proposed Acquisition.

The Proposed Acquisition is conditional upon the following conditions precedents being fulfilled within a period of three (3) months from the date thereof or such other period as the parties may mutually agree in writing:-

a) approval of the Foreign Investment Committee; and

b) completion of the due diligence on SFB within sixty (60) days from the execution of Sale and Purchase Agreement.


3. INFORMATION ON SFB

SFB (formerly known as UMBC Finance Berhad) was incorporated in Malaysia on 6 July 1962. The company currently has an authorized share capital of RM200,000,000 comprising 2,000,000 ordinary shares of RM100 each of which 1,000,000 ordinary shares of RM100 each have been issued and fully paid-up.

SFB is a wholly owned subsidiary company of SBB and is licensed under the BAFIA, to carry on the business of a finance company. SFB presently has 22 branches throughout Malaysia.

4. PURCHASE CONSIDERATION

Upon the completion of the due diligence by Mayban Finance on SFB, Mayban Finance shall within seven (7) days thereof inform in writing to SBB, the value of the Adjusted NTA as determined by the appointed auditor.

In the event that the Adjusted NTA equals to RM10 million, the Stakeholder shall on completion release the Initial Deposit free from interest to SBB as payment of the Consideration.

In the event that the Adjusted NTA is less than RM10 million, the Stakeholder shall on completion release such portion of the Initial Deposit as is equivalent to Adjusted NTA to SBB. The balance of the Initial Deposit together with the interest earned shall be refunded to Mayban Finance.

In the event that the Adjusted NTA exceeds RM10 million, Mayban Finance shall on completion pay to SBB the excess amount and the Stakeholders shall on completion release the Initial Deposit free from interest to SBB.

5. EFFECTS OF THE PROPOSED ACQUISITION

5.1 Share Capital of Maybank

The Proposed Acquisition will not have any effect on the issued and paid-up share capital of Maybank, as it does not involve any allotment or issue of new Maybank shares.

5.2 Net Tangible Assets of Maybank

The Proposed Acquisition is not expected to have any material effect on the net tangible assets of Maybank for the current financial year ending 30 June 2000.

5.3 Earnings of Maybank

The Proposed Acquisition of SFB is not expected to have a material effect on Maybank’s earnings for the current financial year ending 30 June 2000. 

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      Yours faithfully
      For and on behalf of
      Aseambankers Malaysia Berhad
      Heah Kok Boon
      Senior Manager
      Corporate Finance
      Yong Lee Mei
      Head
      Corporate Finance


KUALA LUMPUR
29 October 1999

 

Announcement Info

Company Name MALAYAN BANKING BERHAD  
Stock Name MAYBANK    
Date Announced 29 Oct 1999  
Category General Announcement
Reference No MM-991015-65120