News

Related Party Transaction - Disposal Of Property Together With Plants, Equipments And Machineries

Type	:	Announcement
Subject	:	Related Party Transaction - Disposal of Property together with plants, equipments and machineries

Contents :

1. Introduction

The Board of Directors of QL Resources Berhad ("Company") wishes to announce that its subsidiary, Fresh Choice Seafood Trading Sdn. Bhd. is proposing to enter into a Sale and Purchase Agreement ("S&P") to dispose a parcel of land described as Country Lease No. 015385887 measuring an area of 7,480 square feet more or less together with a two storey semi-detached office cum warehouse erected thereon known as Lot No. 22, Lorong Mangga 1, BDC/Milek Perkasa Industrial Estate, Mile 5, Tuaran Road, Kota Kinabalu, Sabah ("Property") with fixtures, fitting, plants, equipments and machineries to a related party namely Far East Seafood Centre Sdn. Bhd. ("Purchaser") for a total consideration of Ringgit Malaysia Eight Hundred Thousand (RM 800,000.00) only.


2. Information on the Purchaser

Far East Seafood Centre Sdn. Bhd. (193008-H), a company incorporated in Malaysia and having an office at Lot 5, Ground Floor, Wisma Yakim, Jalan Datuk Salleh Sulong, (P.O.Box No.11741, 88819 Kota Kinabalu), 88000 Kota Kinabalu, Sabah, Malaysia. The authorised share capital of the Purchaser is RM500,000.00 comprising of 500,000 ordinary shares of RM1.00 each of which 100,000 shares have been issued and fully paid up.

Mr Chua Hock Joo is the director and major shareholder of Fresh Choice Seafood Trading Sdn. Bhd. while his spouse is the director and major shareholder of Far East Seafood Centre Sdn. Bhd.

3. Business Activities

(a) Fresh Choice Seafood Trading Sdn. Bhd. ("Fresh Choice")

The principal business of Fresh Choice is dealing with frozen seafood processing for export.

(b) Far East Seafood Trading Sdn. Bhd. ("Far East")

The principal business of Far East is engaged in frozen seafood trading in Sabah domestic market.

4. Details of the Proposed Disposal

The total consideration is RM800,000.00 in cash. The consideration was arrived after taking into consideration the valuation of the Property by Henry Butcher Malaysia (Sabah) Sdn. Bhd. ("Henry Butcher") , an independent valuer dated 15 July 2007.

Based on Henry Butcher's valuation report, the market value of the land held under CL 0157385887, District of Kota Kinabalu, together with the two storey semi-detached warehouse cum office building, free from encumbrances is RM800,000.00.

As at 31 March 2007, the audited net book value of the said Property (including the renovation cost) is approximately RM518,000.00. The original cost of investment for the Property as at 1995 was RM450,000.00.

The expected gain/loss from the Proposed Disposal is approximately RM300,000.00 after taking into consideration expenses related to the Proposed Disposal.

5. Utilisation of Proceeds

The utilisation of the cash proceeds from the Proposed Disposal will be used to increase the working capital of Fresh Choice.


6. Salient terms of the S & P

The consideration of Ringgit Malaysia Eight Hundred Thousand (RM800,000.00) only shall be paid by the Purchaser to Fresh Choice as follows:-

(a) Upon signing of the S&P, the Purchaser shall pay a sum of Ringgit Malaysia Eighty Thousand (RM80,000.00) only as a deposit and part payment to Messrs Lee & Thong, Advocates & Solicitors, No.76 & 78 (2nd Floor) Jalan Gaya, 88000 Kota Kinabalu ("Legal Firm"). The said sum shall only be released to Fresh Choice upon the said Legal Firm obtaining the memorial number for the caveat lodged.

(b) The balance of the consideration of Ringgit Malaysia Seven Hundred and Twenty Thousand (RM720,000.00) only shall be paid to the said Legal Firm within 3 months from the date of the S&P ("Completion Date"). The said Legal Firm shall only release the balance sum to Fresh Choice upon memorial number for the Memorandum of Transfer in favour of the Purchaser being given.

(c) PROVIDED and it is hereby agreed as it is intended by the Purchaser to obtain a loan. In the event that the loan documentation is not completed within the stipulated time, the Purchaser shall be entitled to an extension of one (1) month to effect the payment.

(d) Fresh Choice shall deliver vacant possession of the said Property to the Purchaser upon full payment of the consideration.

(e) There is no charge, caveat, lien, prohibitory order, charging order or other encumbrances of whatsoever nature, registered, lodged or affecting the said Property. No liabilities shall be assumed by the Purchaser pursuant to the Proposed Disposal.

7. Rationale

The Related Party Transaction is to dispose its land which is no longer in use.

8. Financial Impact

There is no material effect on net profit, earnings per share, net assets, gearing, share capital and substantial shareholdings of the Company.

9. Approvals Required

Fresh Choice shall obtain approval from its Shareholders and Board of Directors on the Proposed Disposal. No other approval from the shareholders and authorities of the Company is required for the Related Party Transaction.

10. Interests of Directors, Substantial Shareholders and Persons Connected To Them

Save as disclosed in paragraph 2 above, none of the Directors have any indirect interests in the Related Party Transaction. The interested director have abstained from stating an opinion in relation to the transaction.

11. Statement by the Board of Directors

The Board of Directors is of the opinion that the Related Party Transaction is in the best interest of the Company.

12. Date of Completion

The signing of the S&P is expected by September 2007 and the Proposed Disposal is expected to be completed by January 2008.

13. Departure from the Securities Commission's Policies and Guidelines on Issues/Offer of Securities

To the best knowledge of the Company, the Proposed Disposal has not departed from the SC guidelines.

14. Documents for inspection

The S&P and valuation report for the Proposed disposal will be made available for inspection at the registered office of the Company at No.16A, Jalan Astaka U8/83, Bukit Jelutong, 40150 Shah Alam, Selangor during normal business hours for a period of one month after the date of signing of S&P.

This announcement is dated 11 September 2007.