1.         INTRODUCTION

The Board of Directors of AFFIN wishes to announce that Affin Hwang Asset Management Berhad (“AHAM”), a 70%-owned subsidiary company of Affin Hwang Investment Bank Berhad which in turn is a wholly owned subsidiary of AFFIN, has on 13 December 2017 entered into a Joint Venture Agreement with GV Capital Dynamics Sdn Bhd (“GVCD”) (“JVA”) to establish a joint venture company for provision of training services exclusively for AHAM’s sales agents.

In accordance to the JVA, AHAM has on 13 December 2017 subscribed for 51 ordinary shares, representing approximately 51% equity interest, in AccelVantage Academy Sdn Bhd, a newly incorporated company (“JVCO”), for a total cash consideration of RM51 (“AHAM’s Initial Share Subscription”). GVCD subscribed for 49 ordinary shares, representing 49% equity interest for a total cash consideration of RM49 (“GVCD’s Initial Share Subscription”).

Subsequently, AHAM will on 20 December 2017 further subscribe for additional 208,112 ordinary shares in the JVCO for a total cash consideration of RM208,112 (“AHAM’s Additional Share Subscription”). AHAM’s Initial Share Subscription and AHAM’s Additional Share Subscription will represent approximately 51% equity interest in the JVCO. GVCD will further subscribe for 199,951 ordinary shares for a total cash consideration of RM199,951 (“GVCD’s Additional Share Subscription”). GVCD’s Initial Share Subscription and GVCD’s Additional Share Subscription will represent approximately 49% equity interest in the JVCO.

AHAM’s Initial Share Subscription and AHAM’s Additional Share Subscription are collectively referred to as the “Share Subscription”.

2.         DETAILS OF THE JOINT VENTURE

2.1        Background

Pursuant to the JVA, AHAM and GVCD (collectively the “Shareholders”) have agreed to form a joint venture to provide training services exclusively for AHAM’s sales agents.

2.2        Information on GVCD

GVCD is a company incorporated in Malaysia on 23 December 2015 under the Companies Act 2016 as a private limited company.  Its current issued share capital is RM250,000 comprising 250,000 ordinary shares.

The principal activity of GVCD is investment holding.

2.3        Salient terms of the JVA

2.3.1     Primary objective

The primary objective of the JVCO is to provide non-core training such as soft skills competencies training solely for AHAM’s sales agents.

2.3.2     Shareholding structure

The shareholdings of the Shareholders in the JVCO shall be as follows:

2.3.3     Composition of the Board of JVCO

The current directors of the JVCO are Mr. Teng Chee Wai and Mr. Siau Kee Yen.

Four directors, namely Mr. David Ng Kong Cheong, Mr. Lim Jen Chang, Mr. Tang Wey Hon, and Mr. Yap Tsok Heng will be appointed to the Board of Directors of JVCO at a later date.

3.         BASIS OF THE SUBSCRIPTION CONSIDERATION

The total cash consideration of RM208,163 for the Share Subscription was computed based on AHAM’s 51% share of the working capital requirements for the JVCO.

4.         SOURCE OF FUNDING

The payment for the Share Subscription is and will be funded via AHAM’s internally generated funds.   Any future investment in the JVCO, if required will also be funded through AHAM’s internally generated funds.

5.         RATIONALE FOR THE JOINT VENTURE

The rationale of the JVCO is to provide non-core training such as soft skills competencies solely for AHAM’s sales agents as well as to coach and mentor the said agents.   

6.         FINANCIAL EFFECTS

The Share Subscription does not have any impact on AFFIN’s issued share capital and substantial shareholders’ shareholdings. In addition, it is not expected to have any material effect on the consolidated earnings, net assets and gearing of AFFIN for the financial year ending 31 December 2017.

7.         DIRECTORS’ AND SUBSTANTIAL SHAREHOLDERS’ INTERESTS

None of the Directors of AFFIN, substantial shareholders of AFFIN and/or persons connected to them have any direct or indirect interest in the Share Subscription.

8.         DOCUMENTS FOR INSPECTION

Copy of the JVA is available for inspection at the registered office of AFFIN at 7th Floor, Chulan Tower, 3 Jalan Conlay, 50450 Kuala Lumpur during normal office hour 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 13 December 2017.