Announcement On Acquisitions Of New Subsidiary Company And Industrial Land
Contents :
1. Acquisition of New Subsidiary Company
The Board of Directors of KKB Engineering Berhad ("KKB" or "the Company") wishes to announce that the Company has on 24 January 2005 acquired two (2) ordinary shares of RM1.00 each representing 100% of the issued and paid-up share capital of KKB Industries (Sabah) Sdn. Bhd. ("KKBIS") for a total cash consideration of RM2.00.
KKBIS was incorporated in Malaysia on 14 December 2004 under the Companies Act, 1965, and has an authorised share capital of RM100,000 divided into 100,000 ordinary shares of RM1.00 each.
2. Acquisition of Industrial Land
The Board of Directors of KKB also wishes to announce that KKB Industries (Sabah) Sdn. Bhd., a subsidiary of KKB has on 24 January 2005 entered into a Sale & Purchase Agreement with KKIP Sdn. Bhd. ("KKIP") for the proposed acquisition of industrial land known as Lot No. 13, 14 and 15, all of Industrial Zone 4 (IZ 4), Kota Kinabalu Industrial Park (KKIP) measuring approximately 10.44 acres for a total purchase consideration of RM5,445,742.40 ("Proposed Acquisition"). The Proposed Acquisition shall be satisfied by cash through proceeds from the increase in paid-up share capital of KKBIS, and shall be payable according to the terms and conditions of the Sale & Purchase Agreement.
3. Rationale for the Proposed Acquisition
The Proposed Acquisition will allow KKBIS to set up a steel water pipes, steel fabrication and hot-dip galvanising manufacturing plant in Kota Kinabalu, Sabah. The initial installed capacity for the plant is estimated to be 28,000 MT per annum and involve an estimated capital expenditure of approximately RM20 million. Completion of factory construction and commencement of operations are expected to be in the 1st Quarter of Year 2006.The setting up of the new manufacturing plant in Sabah, undertaken by KKBIS, is in line with KKB's plan to expand its steel related core business activities. This will allow the KKB Group to expand its business horizon. There are several potential areas of benefits arisen from the integration of KKBIS business with KKB Group, such as synergies resulting from sharing a common resources, economies of scale, improved supply chain coordination, and enhance the transfer of technology and technical know-how for increased price and product competitiveness. 4. Share Capital The Proposed Acquisition will not have any effect on the share capital and shareholding structures of substantial shareholders of KKB as the consideration will be fully satisfied in cash and does not involve the issuance of KKB shares. 5. Earnings Per Share ("EPS") and Net Tangible Assets ("NTA")
The Proposed Acquisition is not expected to have any material effect on the EPS of KKB Group for the financial year ending 31 December 2005. It is, however, expected to contribute positively to KKB Group profitability in future. It will not have any material effect on the NTA of KKB Group based on its latest consolidated balance sheet as at 31 December 2003.
6. Directors' Statement
The Board of Directors of KKB, having considered all aspects of the above Proposed Acquisition, is of the opinion that the Proposed Acquisition is in the best interest of the Company and its shareholders.
7. Directors' and Major Shareholders' Interests
None of the directors, major shareholders and/or persons connected with any of them has any interests, direct or indirect, in the Proposed Acquisition.
8. Documents Available for Inspection
A copy of the Sale and Purchase Agreement is available for inspection at the registered office of KKB Engineering Berhad at Lot 865, Section 66, Jalan Kilang, Bintawa Industrial Estate, 93450 Kuching, during normal office hours from Mondays to Saturdays (except public holidays) for a period of one (1) month from the date of this announcement.
Announcement Info
| Company Name |
KKB ENGINEERING BERHAD |
| Stock Name |
KKB |
| Date Announced |
24 Jan 2005 |
| Category |
General Announcement |
| Reference No |
CC-050117-41056 |
