News

1. Introduction

The Board of Directors of QL Resources Berhad (“Company”) wishes to announce that its subsidiary, QL Foods Sdn. Bhd. (“QL Foods”) has on 1 November 2011 entered into a Sale and Purchase Agreement (“S&P”) to acquire all that of the five (5) parcel of freehold land from a related party namely, Credential Development Sdn. Bhd. (“CD or Seller”) for a total consideration of Ringgit Malaysia: Three Million Two Hundred Thousand (RM3,200,000.00) only (“Proposed Acquisition”).

2. Information on QL Foods

QL Foods, a wholly-owned subsidiary of QL Fishery Sdn. Bhd. in which its ultimate holding company being QL Resources Berhad ("QLR"). Its principal nature of business is manufacuring of surimi and surimi-based products.

3. Information on CD

CD, a company incorporated in Malaysia on 2 September 1996, whose registered office is at No. 16A, Jalan Astaka U8/83, Bukit Jelutong, 40150 Shah Alam, Selangor Darul Ehsan. Its principal nature of business is a property holding.  

CD is wholly owned by CBG Holdings Sdn. Bhd. ("CBG") which is a major shareholder of the QLR.

Mr Chia Song Swa and Mr Chia Mak Hooi are common Directors in CD and QLR. They are also Directors and shareholders of CBG, each holding 8% and 2% respectively. Mr Chia Song Swa holds 378,000 ordinary shares of RM0.25 each and free warrants of 18,900 in QLR. He indirectly holds 376,286,682 ordinary shares of RM0.25 each and free warrants of 18,821,280 via his interest in CBG and indirect interest in Ruby Technique Sdn. Bhd. ("RT") and his spouse's interest in QLR shares. Mr Chia Mak Hooi holds 365,000 ordinary shares of RM0.25 each and free warrants of 18,000 in QLR. He indirectly holds 380,270,682 ordinary shares of RM0.25 each and free warrants of 18,916,540 via his and his father's interest in CBG and RTand his father's and spouse's interest in QLR shares.

4. Details of the Proposed Acquisition

As this is an arm’s length transaction, the consideration was based on the recommended market value of a valuation report by Messrs JS Valuers Property Consultants Sdn. Bhd. dated 23 September 2011.

Based on the Valuation Report, the market value of the vacant freehold land is RM5,000,000.00. Four parcels of industrial lands and a parcel of agricultural land which has been recently converted for industrial use and free from all encumbrances.

There is no liabilities to be assumed by QLFoods arising from this transaction. The proposed acquisition will be funded by internal generated funds.

5. Salient terms of the Proposed Acquisition

The consideration of Ringgit Malaysia: Three Million and Two Hundred Thousand (RM3,200,000.00) only shall be paid by QL Foods to CD as follows:

(a)    Upon signing of the S&P, QL Foods shall pay a sum of Ringgit Malaysia: Three Hundred and Twenty Thousand (RM320,000.00) only as a deposit and part payment of the consideration to CD;

(b)   The balance of the consideration of Ringgit Malaysia: Two Million Eight Hundred and Eighty Thousand (RM2,880,000.00) only shall be paid by the QL Foods to the Solicitors as stakeholders on or before three (3) months from the date of S&P or such extended date as permitted by CD and the extended date shall together be referred to as the Completion Date; 

(c)    In the event the QL Foods fails to pay the balance of the consideration within three (3) months from the date of S&P, QL Foods shall be granted to an extension of time of one (1) month with interest rate of 8% per annum to effect the payment; and

(d)    CD shall deliver vacant possession of the land to QL Foods upon full payment of the consideration.  

6. Rationale

The Related Party Transaction is to acquire more land for further expansion of the marine products division of QLR.

7. Financial Impact

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

8. Approvals Required

QL Foods shall obtained approval from its Shareholder and Board of Directors on the Proposed Acquistion. No other approval from the shareholders and authorities of the Company is required for the Related Party Transaction.

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

Save as disclosed in paragraph 3 above, none of the other Directors, substantial shareholders of the Company, or persons connected to such Directors or substantial shareholders have any interest, direct or indirect in the above transaction. The interested directors have abstained from stating an opinion in relation to the transaction.

10. Date of Completion

The Proposed Acquisition is expected to be completed within 6 months from the date of S&P.

11. Percentage ratio of the Proposed Acquisition 

The highest percentage ratio applicable to the Proposed Acquisition pursuant to paragraph 10.02(g) of the Main Market Listing Requirements is 0.43%.

12. Statement by the Audit Committee

The Audit Committee, having taken into consideration all aspect of the Proposed Acquisition, was of the view that it is in the best interest of the Company, fair, reasonable and on normal commercial terms and not detrimental to the interest of the minority shareholders.

13. 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.

14. The total amount transacted with CD for the preceding 12 months

There are no other transactions previously.

15. Documents for inspection

The 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 from the date of announcement.

This announcement is dated 1 November 2011.