Pg 147 - Berjaya Corporation Berhad

Berjaya Land Berhad (201765-A)
94
Annual Report 2005
Notes To The Financial Statements
30 April 2005
39 SIGNIFICANT EVENTS DURING THE FINANCIAL YEAR (CONT’D)
9 On 29 April 2005, the Company announced that it has repaid RM50.05 million to BToto to partially settle the inter-company
advances owing by the Company to BToto. In accordance with the terms of the undertaking given by the Company to BToto dated
23 January 2002, the said partial settlement will allow the Group to utilise at its absolute discretion RM25.025 million nominal value
of BToto ICULS. The Group had on 29 April 2005 converted RM25.025 million nominal value of BToto ICULS into new BToto shares
thereby increasing the Group’s interest in BToto from 44.43% to 45.66%.
10 In 1999, pursuant to a debt conversion exercise, the Company entered into several put option agreements (“Put Options”) with
financial institutions (“FIs”) wherein the FIs are entitled to put to the Company the ICULS 1999/2009 at a pre-determined option
price for a period of 3 years commencing from 31 December 2001. BGB had agreed with the Company to assume the put options.
However, BGB later informed the Company that it would not be able to meet its obligation. In view of this, the Company has made
arrangements to finance the Put Options with internally generated funds and external borrowings. The Company has also arranged
for Immediate Capital Sdn Bhd, a wholly owned subsidiary company of the Company, to take up the Put Options. BGB has
undertaken to indemnify the Company and /or its subsidiary companies for all costs incurred in relation to any funding obtained to
fulfil the Company’s obligations under the Put Options. Notwithstanding the BGB’s proposal to indemnify the Company, BGB
continues to be liable to the Company for its failure to assume the Put Options.
BGB and the Company had previously proposed to offer the ICULS 1999/2009 under the Put Options to the shareholders of the
BGB and the Company. However, the low market price of the ICULS 1999/2009 precludes the successful implementation of the
proposal.
On 2 August 2004, it was announced that the BGB offered the Company approximately 579.08 million 0% Berjaya Corporation Sdn
Bhd Irredeemable Convertible Unsecured Loan Stocks (“BCSB ICULS”) as full and final compensation for the release from the
obligation to assume the Put Options (“Proposed BLB Compensation Scheme”).
Based on the actual holding costs incurred/deemed incurred in respect of 797,241,290 ICULS 1999/2009 by the Company up to
31 December 2004 (being the expiry date of the BGB Put Option), the compensation has as such been determined to be
RM226,891,428 through the release of the Company’s obligation to distribute 576,304,227 BCSB ICULS to BGB pursuant to the
Company’s proposal to distribute BCSB ICULS to its shareholders. In addition, the total net financing costs incurred by the
Company up to 31 December 2004 to take up these ICULS 1999/2009 amounted to RM24.590 million and have been included in
the amount due from holding company, BGB as disclosed in Note 12 to the financial statements.
On 20 June 2005, the shareholders of the Company approved the Proposed BLB Compensation Scheme and the following
proposals:
(a) The proposed settlement of the inter-company balances owing by BGB to the Company through the issuance of up to
approximately 4,108 million BCSB ICULS (“Proposed BGB Inter-Company Settlement”);
(b)
(c)
(d)
(e)
The proposed bonus issue of new ordinary shares of RM1.00 each in the Company (“BLand”) on the basis of one new BLand
share for every one BLand share held (“Proposed 1st Bonus Issue”);
The proposed capital repayment, pursuant to Section 64 of the Companies Act 1965, of RM0.80 for every one BLand share
held after the Proposed 1st Bonus Issue via the distribution of BCSB ICULS and the consolidation of five BLand shares after
the proposed capital repayment into one ordinary share of RM1.00 each in BLand (“Proposed Capital Repayment”);
The proposed bonus issue of new ordinary shares of RM1.00 each in BLand on the basis of three new BLand shares for every
two BLand shares held after the Proposed 1st Bonus Issue and Proposed Capital Repayment (“Proposed 2nd Bonus Issue”);
The payment of a special dividend-in-specie of BCSB ICULS, the quantum of which will be determined later (“Proposed Special
Dividend-in-Specie”).
On the same day, consent from the ICULS 1999/2009 holders was obtained for the Proposed Capital Repayment and the Proposed
Special Dividend-in-Specie. The proposals are now pending approvals of:
(i) the Orders of the High Court of Malaya confirming the Proposed Capital Repayment pursuant to Section 64 of the Companies
Act, 1965; and
(ii) any other relevant authority and/or parties, if any.