TIDMRCG
RNS Number : 8855E
RCG Holdings Limited
15 April 2014
15 April 2014
RCG Holdings Limited
("RCG" or the "Company" and together with its subsidiaries, the
"Group")
Proposed Disposal of Property
The Board of the Company is pleased to announce that, the
Vendor, an indirect wholly-owned subsidiary of the Company, entered
into the Agreement with the Purchaser, an Independent Third Party
on 15 April 2014 after trading hours, pursuant to which, the Vendor
has conditionally agreed to sell and the Purchaser has
conditionally agreed to purchase the Property at a total
Consideration of RM59.80 million (approximately HK$142.72 million
and approximately GBP11.03 million) subject, inter alia, to the
approval of shareholders of both the Company and the Purchaser.
As certain applicable percentage ratios (as defined in the Hong
Kong Listing Rules) for the Disposal exceeds 25% but is less than
75%, the Disposal constitutes a major transaction for the Company
under Chapter 14 of the Hong Kong Listing Rules and is subject to
the reporting, announcement and Shareholders' approval requirements
under the Hong Kong Listing Rules.
A circular containing, further details of the Disposal and a
notice convening a special general meeting of the Company for the
purpose of seeking Shareholders' approval of the Disposal, is
expected to be dispatched to the Shareholders on or before 12 May
2014.
THE SALE AND PURCHASE AGREEMENT
Date of the Agreement
15 April 2014
Parties
(1) Vendor: RCG Land Sdn. Bhd.
(2) Purchaser: Pertubuhan Peladang Kebangsaan (National Farmers Organisation)
The Property
Type : An industrial premises comprising a three storey
detached factory building with an annexed three
storey office building and a guard house
Land size : 1.3581 hectares (13,581 square meters); equivalent
to 3.350 acres (146,185 square feet ("sq. ft."))
Built-up : Three Storey Detached Factory 59,470 sq. ft.
area Annexed Three Storey Office Building 144,450 sq.
ft.
Guardhouse 147 sq. ft.
Total Built-up Area 204,067 sq. ft.
Location : Lot 1, Jalan Teknologi 3/5, Taman Sains Selangor
/ Address 1, Kota Damansara, 47810 Petaling Jaya, Selangor
Darul Ehsan, Malaysia
Consideration
The Consideration for the Disposal in the total amount of
RM59.80million (approximately HK$142.72 million and approximately
GBP11.03 million) shall be paid by the Purchaser in the following
manner:-
(a) a sum of RM5.98 million (approximately HK$14.27 million and
approximately GBP1.10 million) shall be paid upon execution of the
Agreement.
(b) the balance sum of RM53.82 million (approximately HK$128.45
million and approximately GBP9.93 million) being the balance of the
total Consideration shall be paid within three months from the
completion of the Disposal.
The Consideration has been arrived at after arm's length
negotiations between the Vendor and the Purchaser and was
determined with reference to the market price of other similar
lands and premises in the vicinity of the Property. Based on the
valuation report dated 10 March 2014 (for accounting reference
purpose) prepared by JS Valuers Property Consultants Sdn. Bhd., the
market value of the Property as at 31 December 2013 was
RM59.80million (approximately HK$142.72 million and approximately
GBP11.03 million).
Completion
Completion of the Disposal is subject to:-
(i) the written consent of the state authority for the transfer
of all the Vendor's rights and entitlements to the Purchaser;
(ii) obtaining the approval for the Disposal from the Shareholders in general meeting; and
(iii) obtaining the approval for the acquisition from the
shareholders of the Purchaser in general meeting.
INFORMATION ON THE COMPANY AND THE GROUP
The Company is an investment holding company and the Group is
principally engaged in the developing, sourcing and selling
biometric and radio frequency identification (RFID) products and
solutions services in the Asia Pacific region. The Group's business
is divided generally into four categories; "Trading of Security of
Biometrics Products", "Solutions, Projects and Services", "Internet
and Mobile Applications & Related Accessories" and "Commodities
Trading".
INFORMATION ON THE PURCHASER
Pertubuhan Peladang Kebangsaan (National Farmers Organisation)
is a body corporate incorporated in Malaysia under the Farmer's
Organisation Act, 1973 (ACT 109), been involved in various business
activities and investment, particularly in agriculture.
To the best of the Directors' knowledge, information and belief
and having made all reasonable enquiries, the Purchaser is an
Independent Third Party.
REASONS FOR AND BENEFITS OF THE DISPOSAL
Premised on the revitalizing property market condition in the
region in particular Malaysia, the Board considers that the
Disposal is a good avenue for the Company to unlock the value in
the Property. The proceeds from the Disposal will enable the
Company to repay its mortgages and to be used by the Group for
general working capital or considerations for investment
opportunities.
The Board (including independent non-executive Directors)
considers that the Agreement was entered into after arm's length
negotiation between the Company and the Purchaser and the terms
therein are in accordance with the normal practice in the property
market and the Disposal is fair and reasonable and in the interest
of the Company and the Shareholders as a whole.
POSSIBLE FINANCIAL EFFECT ON THE DISPOSAL
Considering the carrying amount of approximately RM51.70million
(approximately HK$123.39 million and approximately GBP9.54 million)
as at 31 December 2013 of the Property, upon completion of the
Disposal, would result in a loss in approximately RM3.79 million
(approximately HK$9.04 million and approximately GBP0.70 million)
after tax and expenses is expected to accrue to the Group. This is
inclusive of various direct costs attributable to the Disposal in
particular, the reinstatement and repair works, facilitator fees
and property agent fees.
The finance costs are expected to reduce by approximately
RM6.00million (approximately HK$14.32 million and approximately
GBP1.11 million) per annum after repayment of the bank borrowing
attributable to the Property.
USE OF PROCEEDS
The proceeds from the Disposal will enable the Company to repay
mortgages outstanding in respect of the Property totaling
approximately RM15.36 million (approximately HK$36.66 million and
approximately GBP2.83 million). The balance of the proceeds from
the Disposal will be used for the Group's general working capital
purposes and as consideration for any investment opportunities.
HONG KONG LISTING RULES IMPLICATION
As certain applicable percentage ratios (as defined in the Hong
Kong Listing Rules) for the Disposal exceeds 25% but is less than
75%, the Disposal constitutes a major transaction for the Company
under Chapter 14 of the Hong Kong Listing Rules and is subject to
the reporting, announcement and Shareholders' approval requirements
under the Hong Kong Listing Rules.
A circular containing, among other information, further details
of the Disposal is expected to be dispatched to the Shareholders on
or before 12 May 2014.
Enquiries:
RCG Holdings Limited Tel: +852 2637 2800
Wang Zhongling, Chief Executive Officer
ir@rcg.tv
Smith & Williamson Corporate Finance Limited Tel: +44 (0) 20 7131 4000
(Nominated adviser and broker)
Dr. Azhic Basirov / David Jones / Ben Jeynes
Notes:
(i) HK$ equivalent values above are based on an exchange rate of RM0.419/HK$1.
(ii) Sterling equivalent values above are based on an exchange rate of RM5.420/GBP1.
DEFINITIONS
In this announcement, unless the context otherwise requires, the
following expressions shall have the following meaning:
"Agreement" the sale and purchase agreement dated 15 April
2014 entered into between the Vendor and the Purchaser
in respect of the Disposal;
"AIM" a stock market operated by the LSE;
"Board" the board of Directors;
"Company" RCG Holdings Limited (AIM: RCG, HKSE: 802), a
company incorporated in Bermuda with limited liability
and the shares of which are listed on The Stock
Exchange of Hong Kong Limited and admitted to
trading on AIM and are traded on the ISDX secondary
market;
"Consideration" the consideration payable by the Purchaser to
the Vendor for the Disposal pursuant to the Agreement;
"Director(s)" the director(s) of the Company;
"Disposal" the disposal of the Property by the Vendor to
the Purchaser pursuant to the Agreement;
"Group" the Company and its subsidiaries;
"HKSE" The Stock Exchange of Hong Kong Limited;
"HK$" Hong Kong dollars, the lawful currency of Hong
Kong;
"Hong Kong Listing the Rules Governing the Listing of Securities
Rules" on The Stock Exchange of Hong Kong Limited;
"Independent person or company and their respective ultimate
Third Party" beneficial owner which, to the best of the Directors'
knowledge, information and belief, having made
all reasonable enquiries, are third parties independent
of and not connected with the Company and its
connected persons;
"ISDX" ICAP Securities & Derivatives Exchange Limited,
a recognized Investment Exchange under the Financial
Services and Markets Act 2000 (formerly PLUS Stock
Exchange/PLUS-SX);
"LSE"
The London Stock Exchange plc;
"Pounds" or "GBP"
Pounds sterling, the lawful currency of the UK;
"Property" an industrial premises comprising a three storey
detached factory building with an annexed three
storey office building and a guard house with
total build-up area of 204,067 square feet erected
on that piece of land having an area of 1.3581
hectares;
"Purchaser" Pertubuhan Peladang Kebangsaan (National Farmers
Organisation), a body corporate incorporated in
Malaysia under the Farmer's Organisation Act,
1973 (ACT 109);
"RM" Ringgit Malaysia, the lawful currency in Malaysia;
"Shareholders" the shareholder(s) of the Company;
"Vendor" RCG Land Sdn. Bhd., a private company incorporated
in Malaysia, is an indirect wholly-owned subsidiary
of the Company; and
"%" per cent.
This information is provided by RNS
The company news service from the London Stock Exchange
END
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