LEONG HUP HOLDINGS BERHAD - Announcements

4. RATIONALE FOR THE PROPOSALS
The Proposed Disposal of Atlasprise Shares, Proposed Disposal of 73.845-Acre Land, Proposed
Disposal of 132.395-Acre Land and Proposed Disposal of 119.82-Acre Land will raise gross
proceeds of approximately RM46.068 million for the LHHB Group, excluding:-
(a)
(b)
(c)
The proceeds to be raised from the sale of the Consideration Shares arising from the
Proposed Disposal of 119.82-Acre Land, which the Company is currently unable to
determine as the initial public offering price of Newco Shares has yet to be determined;
The expenses of the Proposals; and
After deducting the purchase consideration for the First Proposed Acquisition of Budiman
Shares.
The breakdown of the proceeds is as follows:-
Proposal
Cash Proceeds
(RM’000)
Proposed Disposal of Atlasprise Shares 465
Proposed Disposal of 73.845-Acre Land 14,153
Proposed Disposal of 132.395-Acre Land 25,375
Proposed Disposal of 119.82-Acre Land 10,000
49,994
Less: First Proposed Acquisition of Budiman Shares (3,926)
46,068
The disposal proceeds will improve the Group’s cash flow for the financial year ending 31 March
2002 and allow the Group to reduce its bank borrowings which amounted to RM308.406 million as
at 31 March 2001. The interest saving arising from the repayment of bank borrowings is expected
to be approximately RM2.465 million per annum assuming an average borrowing cost of 8.3% per
annum (based on the actual interest rate currently charged by OCBC). At the same time, the First
and Second Proposed Acquisition of Budiman Shares will enable LHHB to retain a significant stake
of 90.1% in Budiman and hence the remainder of the Budiman Land amounting to 529.15 acres.
5. SOURCES OF FUNDS AND UTILISATION OF PROCEEDS
5.1 Sources of Funds
As shown in Section 4 above, the purchase consideration for the First Proposed Acquisition
of Budiman Shares will be set off against the proceeds from the Proposed Disposal of
Atlasprise Shares, Proposed Disposal of 73.845-Acre Land, Proposed Disposal of 132.395-
Acre Land and Proposed Disposal of 119.82-Acre Land. As stated in Section 3.5.2(c)
above, the Second Proposed Acquisition of Budiman Shares will be funded by LHHB by
way of set-off against the amount owing by Amalan to LHM.
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