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TROPICANA CORPORATION BERHAD (TROPICANA OR COMPANY)

DISPOSAL OF PROPERTY COMPRISING LAND MEASURING APPROXIMATELY 1,106 SQUARE


METERS IN AREA ON WHICH HAS BEEN ERECTED A 10-STOREY BUILDING CURRENTLY
KNOWN AS SKY EXPRESS HOTEL, KUALA LUMPUR LOCATED AT 128, JALAN PUDU, BUKIT
BINTANG, KUALA LUMPUR BY ADVENT NEXUS SDN BHD, A WHOLLY-OWNED SUBSIDIARY
OF THE COMPANY, FOR A CASH CONSIDERATION OF RM55,000,000.00

1. INTRODUCTION

The Board of Directors of Tropicana wishes to announce that Advent Nexus Sdn Bhd
(Vendor), a wholly-owned subsidiary of Tropicana, had on 12 January 2016, entered into a
sale and purchase agreement (SPA) with Pinnacle Supreme Sdn Bhd (Purchaser) for the
disposal of a piece of land held under Geran 5826, Lot 474 Seksyen 19, Bandar Kuala Lumpur,
Daerah Kuala Lumpur comprising an area of approximately 1,106 square meters on which has
been erected a 10-storey building currently known as Sky Express Hotel, Kuala Lumpur
(Property) for a total cash consideration of RM55,000,000.00 (Sales Consideration)
(Disposal).

2. INFORMATION OF THE DISPOSAL

2.1 Information on the Vendor

The Vendor is a private limited company incorporated on 10 May 2012 in Malaysia under the
Companies Act, 1965 (Act). The present authorised share capital of the Vendor is
RM1,000,000.00 comprising 1,000,000 ordinary shares of RM1.00 each, for which 1,000,000
ordinary shares of RM1.00 each have been issued and fully paid-up. The Vendor is principally
involved in hotel management and services.

2.2 Information on the Purchaser

The Purchaser is a private limited company incorporated on 23 October 2015 in Malaysia under
the Act. The present authorised share capital of the Purchaser is RM400,000.00 comprising
400,000 ordinary shares of RM1.00 each, for which 2 ordinary shares of RM1.00 each have
been issued and fully paid-up. The Purchaser is principally involved in real estate activities.

2.3 Information on the Property

The Vendor is the registered proprietor of the Property. Further information on the Property
are as follows:

Postal address and : A 10-storey building currently known as Sky Express Hotel
identification Kuala Lumpur and bearing postal address of 128, Jalan
Pudu, Bukit Bintang, 55100 Kuala Lumpur. The land is held
under Geran 5826, Lot 474 Seksyen 19, Bandar Kuala
Lumpur, Daerah Kuala Lumpur
Land area : Approximately 1,106 square meters (11,904.88 square feet)
Restriction-in-interest : None
Existing use : Hotel operations
Tenure : Freehold
Net book value as at 31 : RM45.09 million
December 2014

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Encumbrances : A legal charge over the Property in favour of Affin Bank
Berhad
Original cost of : RM54.00 million / 8 June 2012
investment/ Date of
investment
Approximate Age of : 4.5 years
building
Valuation : RM54.00 million / 10 July 2012

2.4 Basis of the Sales Consideration

The Sales Consideration was arrived at based on negotiations between the parties on a willing-
buyer willing-seller basis after taking into consideration, among others, the following:

(i) The original cost of investment of the Property; and


(ii) The prevailing market value of Property at the surrounding area.

2.5 Salient Terms of the Disposal

The salient terms of the SPA include, amongst others, the following:

2.5.1 Payment terms of the Sales Consideration

The Sales Consideration is payable by the Purchaser in the following manner:

(i) RM5,500,000.00 which is equivalent to 10% of the Sales Consideration upon execution
of the SPA.

(ii) The balance of the Sales Consideration amounting to RM49,500,000.00 (Balance


Sales Consideration) shall be paid by the Purchaser within 2 months from the
Unconditional Date (as defined below) (Completion Period) and the date on which
the Balance Sales Consideration is paid within the Completion Period shall be referred
to as the Completion Date with an extension period of 1 month (Extended
Completion Period) subject to late payment interest at the rate of 8% per annum on
the outstanding sum calculated on a daily basis commencing from the day falling
immediately after the expiration of the Completion Period up to the actual date of
payment of the outstanding sum.

2.5.2 Conditions Precedent

The SPA of the Property is conditional upon and subject to the following conditions precedent:

(i) the Vendor having obtained a written approval or consent from Tenaga Nasional
Berhad (TNB) for the transfer of the Property to the Purchaser pursuant to the lease
registered on the title of the Property in favour of TNB; and

(ii) the Purchaser having obtained a written approval or confirmation from the Economic
Planning Unit (EPU) in respect of the acquisition of the Property by the Purchaser;

within 3 months of the SPA (Conditional Period). The conditions precedent stated above
shall be fulfilled within the Conditional Period, failing which the Vendor or the Purchaser shall,
at the written request of the Purchaser or the Vendor at least 7 business days prior to the
expiration of the Conditional Period, grant an extension of time for the Vendor and/or the
Purchaser for a period of 1 month.

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The SPA shall become unconditional on the date upon which all the conditions precedents are
satisfied (Unconditional Date).

If any of the conditions precedent is not satisfied within the Conditional Period or Extended
Conditional Period, not due to a default of any party hereto, then either party hereto may
terminate the SPA by giving a written notice to the other party within 10 business days from the
date of expiry of the Conditional Period or Extended Completion Period.

2.5.3 Operation of Sky Express Hotel

(a) Upon completion of the transaction, the Purchaser may independently operate a hotel
at the Property under the brand name of Sky Express Hotel for a period of up to 18
months (Interim Period) and all the revenue generated from the operation of the said
hotel with effect from the date of delivery of possession of the Property shall belong to
the Purchaser absolutely subject to the Purchaser indemnifying and holding harmless
the Vendor against any claim, proceeding, demand, loss, damage, cost, expense,
obligation and liability arising from the use by the Purchaser of the brand name. For the
avoidance of doubt, this does not amount to the Purchaser taking over or buying over
the hotel business of the Vendor currently being carried on at the Property.

(b) The Purchaser shall notify the Vendor not less than 14 Business Days prior to the
expiration date of the Completion Period or Extended Completion Period, as to whether
the Purchaser intends to independently operate a hotel under the brand name of Sky
Express Hotel at the Property.

(c) Upon expiration of the Interim Period, the Purchaser shall cease use of the Sky
Express Hotel brand name, including on all stationery, logos, signages, clothing and
other materials and paraphernalia.

2.6 Expected net gain and utilisation of proceeds

(i) The expected gain from the Disposal is approximately RM2.5 million (net of tax
payable); and

(ii) The net proceeds of approximately RM24.4 million arising from the Disposal are
expected to be utilised for the working capital and/or repayment of bank borrowings of
Tropicana and its group of companies (Tropicana Group).

2.7 Liabilities to be assumed by Purchaser

There is no liability to be assumed, including any contingent liability and guarantee, by the
Purchaser pursuant to the Disposal.

3. RATIONALE

The rationale for the Disposal are:


(i) to realise gain via sale of Property; and
(ii) to raise funds as working capital and/or repayment of bank borrowings of Tropicana
Group.

The Disposal is also in line with Tropicana Groups de-gearing exercise to strengthen its
financial footing.

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4. EFFECTS OF THE DISPOSAL

4.1 Share capital and substantial shareholders shareholding

The Disposal will not have any effect on the issued and paid-up share capital of Tropicana and
the substantial shareholders shareholding in Tropicana, as the Disposal does not involve any
issuance of shares in Tropicana.

4.2 Earnings, earnings per share, net assets per share and gearing

The Disposal is expected to be completed in the 2nd quarter of 2016 and has no significant
effect on earnings per share and net assets per share of Tropicana for the financial year ending
31 December 2016.

5. APPROVALS REQUIRED

Save as disclosed in clause 2.5.2 of this announcement, there are no approvals required for
the Disposal.

6. INTERESTS OF DIRECTORS, MAJOR SHAREHOLDERS AND/OR PERSONS


CONNECTED

None of the Directors and/or major shareholders of Tropicana and its subsidiaries and/or
persons connected to them have any interest, direct or indirect in the Disposal.

7. DIRECTORS RECOMMENDATION

The Board of Directors, having considered all aspects of the Disposal, is of the opinion that the
Disposal is in the best interest of Tropicana.

8. HIGHEST PRECENTAGE RATIO

The highest percentage ratio applicable to the Disposal pursuant to Paragraph 10.02(g) of the
Bursa Malaysia Securities Berhads Main Market Listing Requirements is approximately 1.9%
based on the latest audited financial statements of Tropicana as at 31 December 2014.

9. ESTIMATED TIMEFRAME FOR COMPLETION

Barring any unforeseen circumstances, the Disposal is expected to be completed in the 2nd
quarter of 2016.

10. DOCUMENTS FOR INSPECTION

The SPA is available for inspection by the shareholders of Tropicana at the registered office of
Tropicana at Lot LG-A1, Lower Ground Floor, Tropicana City Mall, No. 3 Jalan SS20/27, 47400
Petaling Jaya, Selangor Darul Ehsan, during normal business hours from Mondays to Fridays
(except public holidays) for a period of 3 months from the date of this announcement.

This announcement is dated 12 January 2016.