R&A Telecommunication Group Bhd
+603 55691801 +603 55695730

Company Name

R&A TELECOMMUNICATION GROUP BERHAD

Stock Name

RA

Date Announced

04 May 2016

Category

General Announcement for PLC

Reference Number

GA1-04052016-00019

OTHERS R&A TELECOMMUNICATION GROUP BERHAD ("R&A" OR "THE COMPANY") - TERM SHEET FOR THE PROPOSED ACQUISITION OF 100% EQUITY INTERST IN SEMUA SHIPPING SDN BHD

Type

Announcement

Subject

OTHERS

Description

R&A TELECOMMUNICATION GROUP BERHAD ("R&A" OR "THE COMPANY")

-                   TERM SHEET FOR THE PROPOSED ACQUISITION OF 100% EQUITY INTERST IN SEMUA SHIPPING SDN BHD

The Board of Directors of R&A (“Board”) wishes to announce that the Company has on even date entered into a non-binding term sheet with Semua International Sdn Bhd (“SISB”) in relation to the proposed acquisition of 100% equity interest in Semua Shipping Sdn Bhd (“SSSB”) by the Company for a purchase consideration of RM150 million to be satisfied via the issuance of new ordinary shares of RM0.10 each in R&A (“R&A Shares”) at an issue price of RM0.10 per R&A Share (“Term Sheet”) (“Proposed Acquisition”).

The Proposed Acquisition will form part of the Company’s regularisation plan and is subject to the satisfaction of certain conditions as set out in Section 2.3 below, including a satisfactory due diligence exercise to be conducted by the Company on SSSB, as well as the finalisation of a binding definitive agreement between the parties.

2.1       Details of the transaction

A special purpose vehicle (“SPV”) will be set up for the purpose of the Proposed Acquisition.

SISB will transfer all its shares in SSSB to a SPV to be collectively held by the existing shareholders of SISB, namely Hoe Leong Corporation Ltd (“HLCL”) (2%), Ebony Ritz Sdn Bhd (“ERSB”) (49%) and Sumatec Resources Berhad (“SRB”) (49%), in the same shareholding proportions in which HLCL, ERSB and SRB are holding in SISB. ERSB is 80%-owned by HLCL and 20%-owned by Auspicious Journey Sdn Bhd.

For information, HLCL is a company listed on the Main Board of the Singapore Stock Exchange and SRB is a company listed on the Main Market of Bursa Malaysia Securities Berhad.

R&A shall then enter into a share purchase agreement to purchase the SPV.

2.2       Purchase consideration

R&A will acquire 100% equity interest in the SPV for a purchase consideration of RM150 million to be satisfied via issuance of new R&A Shares at an issue price of RM0.10 per R&A Share.

2.3       Conditions precedent

The transaction is conditional upon, amongst others, the following:-

SSSB was incorporated in Malaysia under the Companies Act, 1965 on 24 April 1980.

SSSB is principally involved in the business of shipping and provision of shipping-related services. SSSB currently owns six (6) product tankers which have a capacity of 8,000 deadweight tonnage (DWT) each. These product tankers are used to transport refined petroleum products such as jet fuel, diesel oil, gas oil, fuel oil and kerosene. All these vessels currently have long term charters with Shell Malaysia.

The Proposed Acquisition is part of the Company’s regularisation plan to maintain its listing status on the ACE Market of Bursa Securities. Hence, the initial step of entering into the Term Sheet is to set the broad parameters of the transaction and allow the parties to outline the tentative terms and conditions as well as their understanding and intention in respect of the Proposed Acquisition.

The Term Sheet will not have any effect on the earnings per share, net assets per share, gearing, share capital and substantial shareholders’ shareholding of the Company.

None of the directors and major shareholders of the Company and/or persons connected to them have any interest, direct and/or indirect, in the Term Sheet.

The Company is in the midst of finalising the appointment of a principal adviser for the Proposed Acquisition.

The Term Sheet is not subject to the approval of the shareholders of the Company or any other relevant parties / authorities.

The Board, having duly considered all aspects of the Term Sheet, is of the opinion that the execution of the Term Sheet is in the best interests of the Company.

The Term Sheet is available for inspection at the registered office of the Company following the date of this announcement for a period of three (3) months from Monday to Friday (except public holidays) during normal business hours.

A detailed announcement on the Proposed Acquisition will be made upon the execution of a definitive agreement between the parties.

In connection to the above, the Company will be submitting an application for an extension of time on even date for a period of four (4) months i.e. until 4 September 2016 for the Company to submit a regularisation plan to Bursa Securities and obtain Bursa Securities’ approval to implement the regularisation plan pursuant to Rule 8.04(3) of the ACE Market Listing Requirements.

This announcement is dated 4 May 2016.

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