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Kuchai Development Berhad ("Kuchai" or the "Company") Memorandum of Understanding ("MOU")

KUCHAI DEVELOPMENT BERHAD

Type

Announcement
SubjectKuchai Development Berhad ("Kuchai" or the "Company")
Memorandum of Understanding ("MOU")

Contents :

On behalf of the board of directors of Kuchai (“Board”), Hwang-DBS Securities Berhad wishes to inform that Kuchai had on 31 March 2005 entered into a MOU with The Nyalas Rubber Estates Limited (“Nyalas”) in regards to the proposed acquisition of an oil palm and rubber estate measuring 813.6926 hectares situated at Mukim of Nyalas, District of Jasin, Melaka and Mukim of Ayer Kuning, District of Tampin, Negeri Sembilan (“Estate”) by Kuchai from Nyalas for an agreed purchase consideration of RM40,000,000 (“Estate Transaction Consideration”)(“Estate Transaction”), which is to be satisfied by the following:


(i) the proceeds arising from the sale of the plot of land known as 9, Emerald Hill Road, Singapore 229293, Town Subdivision 27, Lot 99611W, together with the building thereon (“Land”) by Kuchai to Nyalas for an agreed consideration of Singapore Dollars 3,900,000 (“Land Transaction Consideration”) and;
(ii) either by way of cash or by the transfer of the requisite number of shares of Great Eastern Holdings Limited (GEHL”) (“Consideration Shares”), at an exchange share price to be fixed upon the execution of a binding formal agreement, equivalent in value to the Estate Transaction Consideration less the Land Transaction Consideration by Kuchai to Nyalas.

Further details on the Estate and Land have been set out in Table 1 and Table 2, respectively, as appended.

The salient terms of the MOU are as follows:

(i) Binding formal agreements on the Estate Transaction will be entered into by Kuchai and Nyalas within six (6) months upon fulfillment of all conditions precedents as follow:

      (a) Kuchai is satisfied with the results of any survey and searches of the Estate and the replies to the various enquiries and legal requisitions sent to the various government and other authorities in Malaysia in connection with the Estate;
      (b) Nyalas is satisfied with the results of any survey and searches of the Land and the replies to the various enquiries and legal requisitions sent to the various government and other authorities in Singapore in connection with the Land;
      (c) there has been no material adverse change affecting the Estate or the Land since the date of the MOU;
      (d) there are no changes in national or international financial, political or economic conditions or currency exchange rates or exchange controls that would reasonably cause the parties to come to the opinion that the Estate Transaction can no longer be completed; and
      (e) the approval of the shareholders of Nyalas in a general meeting for the Estate Transaction in accordance with the terms as set out in the MOU and other provisions that are mutually acceptable to the parties has been obtained.

      If any of the above conditions precedent is not satisfied within six (6) months of the date of the MOU, then the parties will not sign the binding formal agreements, unless otherwise agreed, and neither party will have any liability to the other.
(ii) The sale of the Estate will be as a going concern comprising all the assets of whatever nature employed in the Estate which are sold on an “as is where is” basis, that covers amongst other all plots of land upon which the Estate is located, all plant and machinery related to the Estate and all equipment related to the Estate. Provided always that where any third party consents and/or approvals are required for the transfer of any contracts, rights or claims against any third parties or in respect of the transfer of any asset, the cost of obtaining such consents shall be borne by Kuchai and that Nyalas shall not be compelled to transfer or sell any contracts, agreements or asset, for which Nyalas is unable to obtained such requisite third party consent and/or approvals.

(iii) The sale and completion of the Estate and the Land shall be subject to all statutory, regulatory and other consents, approvals permits, licenses or actions or filing or giving of notice to, any governmental body or other person required in Malaysia and/or Singapore or elsewhere, in connection with the sale and purchase of the Estate as a going concern and the sale and purchase of the Land.

(iv) Within six (6) months from the date of the MOU, Nyalas will not sell or offer to sell the Estate or conduct negotiations relating to the sale of the Estate to or with any third party. Concurrently, Kuchai will not sell or offer to sell the Land or conduct negotiations relating to the sale of the Land to or with any third party.

The MOU has been entered into between the parties in good faith and is a prelude to the entering of certain legal and definitive agreements between the said parties on the Estate Transaction. Henceforth, no party shall have a claim against the other except for breach of confidentiality and exclusivity.

A detailed announcement on the Estate Transaction will be made in due course pursuant to the definitive formal agreements on the above being finalized and entered into.

This announcement is dated 31 March 2005.
Table 1 Details of the Estate
Titles / Identification of propertiesLot 192, 813, 919, 920, 988, 1048, 1194 and 4415 of Mukim of Nyalas District of Jasin, Melaka and Lot No. 267, 337, 380, 445, 555, 565 and 566 of Mukim of Ayer Kuning, District of Tampin, Negri Sembilan held under GRN 22786, GRN 22788, GRN 22789, GRN 2794, GRN 22796, PM 1675, PM 1679, GM 558, GRN 74027, GRN 40521, GRN 66100, GRN 68588, GRN 68589 and GM 353
Brief description and locationThe Nyalas Estate is an oil palm estate with a small under rubber cultivation which comprises fifteen (15) lots of various sizes ranging from less than 1 hectare to over 146 hectares.

The Nyalas Estate is situated near Pekan Nyalas, a small village near the Malacca-Negri Sembilan border, approximately 48 kilometres by road to the North-East of Malacca Town and comprises of four (4) divisions, namely Mantai, Ayer Petei, Bukit Kledek, Guba and Meriang Divisions in two (2) general locations.

Out of a total planted area of 785.49 hectares, 767.64 hectares are planted with oil palms of ages ranging from 5 to 22 years whilst the area under rubber cultivation is about 17.85 hectares.

TenureFor Lot No. 919 and 1194

Leasehold 99 years expiring on 7 November 2048

Other Lots

Freehold

Land Area 813.6926 hectares (Freehold 810.0719 hectares, Leasehold 3.6207 hectares)

Table 2 Details of the Land
Address/ Titles / Identification of properties9 Emerald Hill Road, Singapore 229293

Lot 99611W Town Subdivision 27

Brief description and locationA 2-storey shophouse located along Emerald Hill Road, off the main Orchard Road, within the Emerald Hill Conservation Area, Singapore.
TenureFreehold
Land Area 154.0 sq.m.
Floor AreaApproximately 282 sq. m. including balcony of about 9 sq.m. and excluding the five-foot way of about 14 sq.m.


Announcement Info

Company NameKUCHAI DEVELOPMENT BERHAD  
Stock Name KUCHAI    
Date Announced31 Mar 2005  
CategoryGeneral Announcement
Reference NoOD-050331-66999



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