Acquisition by AFFIN Bank Berhad, a wholly-owned subsidiary of AFFIN of a plot of land with a land area of 54,266 square feet at Tun Razak Exchange (known as Plot C7.9-CT)
AFFIN HOLDINGS BERHAD (“AFFIN” OR THE “COMPANY”)
ACQUISITION BY AFFIN BANK BERHAD, A WHOLLY-OWNED SUBSIDIARY OF AFFIN OF A PLOT OF LAND WITH A LAND AREA OF 54,266 SQUARE FEET (“PROPERTY”) AT TUN RAZAK EXCHANGE (KNOWN AS PLOT C7.9-CT)(“ACQUISITION”)
The Board of Directors of AFFIN (“Board”) wishes to announce that Affin Bank Berhad, a wholly-owned subsidiary of AFFIN (“Affin Bank”), has on 10 August 2015 entered into a sale and purchase agreement (“SPA”) with KLIFD Sdn. Bhd. (“KLIFD” or the “Vendor”) for the Acquisition.
DETAILS OF THE ACQUISITION
The Property is a parcel of land known as “Plot C7.9-CT” with a land area of 54,266 square feet and gross floor area (“GFA”) of 823,439 square feet at Tun Razak Exchange, which has been earmarked for an international class Grade A, 35-storey office building development with 830 parking bays. For the purchase price of RM255 million for the Acquisition (“Purchase Consideration”), the price per GFA is RM309.67 per square foot with a plot ratio at 15.2 times.
The Purchase Consideration represents a discount of 2.3% to the current market value of the Property as appraised by independent valuer.
Payment of the Purchase Consideration
The Purchase Consideration shall be paid in cash in the following manner:
1. 10% of deposit upfront upon signing of the SPA; and
2. 90% upon presentation for registration of the transfer and title of the Property.
Source of funding
The Purchase Consideration for the Acquisition will be funded through internally generated funds by Affin Bank.
Liabilities to be assumed
There are no liabilities, including contingent liabilities and guarantees to be assumed by the AFFIN and its subsidiary companies (“AFFIN Group”) arising from the Acquisition.
INFORMATION ON THE VENDOR
KLIFD was incorporated in Malaysia on 25 January 2010 under the Companies Act, 1965 as a private limited company with its registered office at Level 8 Menara IMC, No. 8 Jalan Sultan Ismail, 50250 Kuala Lumpur, being the registered and beneficial owner of the Property. The authorised share capital of KLIFD is RM100,000 comprising 100,000 ordinary shares of RM1.00 each, of which 2 ordinary shares of RM1.00 each have been issued and fully paid-up. The principal activity of KLIFD is real estate, property development and investment holding.
KLIFD is a wholly-owned subsidiary of 1MDB Real Estate Sdn Bhd (“1MDBRE”) who in turn is a wholly-owned subsidiary of 1Malaysia Development Berhad (“1MDB”).
1MBDRE is the master developer of TRX which has been earmarked by the Government of Malaysia as a vital catalyst for the Economic Transformation Program (“ETP”). The development of TRX is also expected to support the growth of Financial Service sector and Greater Kuala Lumpur which in turn will support the growth of all other industries.
RATIONALE FOR THE ACQUISITION
With the Acquisition, AFFIN plans to develop its own Head Office to cater for the future expansion of AFFIN Group.
FINANCIAL EFFECTS OF THE ACQUISITION
The Acquisition is not expected to have any material effect on AFFIN’s consolidated earnings, earnings per share, net assets (“NA”), NA per share and gearing. The Acquisition will not have any effect on AFFIN’s share capital and substantial shareholders’ shareholding.
The Acquisition is neither subject to approvals by any regulated authorities nor the approval of the shareholders of AFFIN.
DIRECTORS AND MAJOR SHAREHOLDERS’ INTEREST
None of the directors and major shareholders of AFFIN and/or persons connected to them has any interest, direct or indirect, in the Acquisition. As at the date of this announcement, Tan Sri Dato’ Seri Lodin bin Wok Kamaruddin (“Tan Sri Lodin”) is the Deputy Chairman/Non-Independent Non-Executive Director of AFFIN and the Chairman of 1MDB, being the ultimate holding company of the Vendor.
Tan Sri Lodin has no direct or indirect shareholding in AFFIN and 1MDB, save for his direct shareholding of 1,051,328 ordinary shares of RM1.00 each in AFFIN, representing 0.05% of total shareholding in AFFIN. As such, the common directorships of Tan Sri Lodin do not render him an interested party of the Acquisition pursuant to Paragraph 10.08(11)(c) of the Main Market Listing Requirements of Bursa Malaysia Securities Berhad (“Listing Requirements”).
Notwithstanding the above, for good corporate governance, Tan Sri Lodin has voluntarily abstained from and will continue to abstain; and is not involved in all deliberations and decision making with regard to the Acquisition.
The Boards of AFFIN and Affin Bank, having considered all aspects of the Acquisition, including but not limited to the rationale, prospects of the Property and the financial effects of the Acquisition and the valuation of the Property, is of the opinion that the Acquisition is in the best interest of the AFFIN Group.
PERCENTAGE RATIOS UNDER THE MAIN MARKET LISTING REQUIREMENTS
Based on AFFIN’s latest audited consolidated financial statement for the financial year ended 31 December 2014, the highest percentage ratio applicable under Paragraph 10.02(g) of Chapter 10 of the Listing Requirements is 3.2%, calculated based on the Purchase Consideration over the audited consolidated net assets of AFFIN as at 31 December 2014 amounting to RM7,953.4 million.
ESTIMATED TIMEFRAME FOR COMPLETION
Barring any unforeseen circumstances, the Acquisition is expected to be completed by the end of 2015.
Attached is the press release in relation to the Acquisition.
This announcement is dated 10 August 2015.