1. Introduction
The Board of Directors of QL Resources Berhad ("Company") wishes to announce that its subsidiary, QL Foods Sdn. Bhd. ("QL Foods") has entered into Sale and Purchase Agreements ("S&P") on 5 March 2008 to acquire 2 parcels of land described as Lot No. 3300 & 3301 in Mukim Hutan Melintang, District of Hilir Perak, State of Perak measuring 1.0927 hectares and 1.1685 hectares respectively from related parties namely Mr Chia Cheong Soong and Mr Chia Song Pou ("Vendor") for a total consideration of Ringgit Malaysia One million Five Hundred and Eighty Five Thousand (RM 1,585,000.00) only.
2. Details of the Proposed Acquisition & land
The total consideration will be funded by internally generated funds of QL Foods. The consideration was arrived after taking into consideration the valuation of the land by JS Valuers Property Consultant (Perak) Sdn. Bhd. ("JS Valuer") , an independent valuer dated 17 January 2008.
Based on JS Valuer's valuation report, the market value of the freehold land on the basis that the titles are fully converted for industrial purposes, free from all encumbrances, restrictive conditions, endorsements, held under Lot 3300 & Lot 3301, Mukim Hutan Melintang, District of Hilir Perak are RM780,000.00 and RM805,000.00 respectively.
The original cost of investment for the said land as at 1988 was RM18,900.00 and RM20,207.00 respectively.
The said land is located in the vicinity of QL Foods factory in Hutan Melintang, Perak. On 26 September 2007, Pejabat Pengarah Tanah Dan Galian, Perak ("PTG") has granted its approval for the conversion of the said lands to industrial category and that the Vendor shall at thier own costs and expense settle in full all conversion premium and related charges payable to PTG.
3. Salient terms of the S & P
The consideration shall be paid by QL Foods to the vendors respectively as follows:-
(a) Upon signing of the S&P, QL Foods shall pay a 10% sum as a deposit.
(b) The balance of the consideration shall be paid within 3 months from the date of the S&P with an extension of 1 further month with 8% interest per annum on the outstanding balance purchase price to be calculated on a daily basis.
4. Rationale
The Related Party Transaction is to acquire the land to further expand the Company's marine based manufacturing business.
5. Financial Impact
There is no material effect on net profit, earnings per share, net assets, gearing, share capital and substantial shareholdings of the Company.
6. Approvals Required
QL Foods shall obtain approval from its Shareholders and Board of Directors on the Proposed Acquisition. No other approval from the shareholders and authorities of the Company is required for the Related Party Transaction.
7. Interests of Directors, Substantial Shareholders and Persons Connected To Them
The vendors of the Proposed acquisitions are persons connected to certain Directors and major shareholders of the QL Group. Save as disclosed below, none of the other Directors and interested persons connected to them are interested in the Proposed acquisition. The interested directors have abstained from stating an opinion in relation to the transaction.
8. Statement by the Board of Directors
The Board of Directors (save for the interested Directors) is of the opinion that the Related Party Transaction is in the best interest of the Company.
9. Date of Completion
The Proposed acquisition is expected to be completed by June 2008.
10. Departure from the Securities Commission's Policies and Guidelines on Issues/Offer of Securities
To the best knowledge of the Company, the Proposed acquisition has not departed from the SC guidelines.
11. Documents for inspection
The S&P and valuation report for the Proposed acquisition 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 5 March 2008.
