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GRAND-FLO SOLUTION BERHAD (“GRAND-FLO” OR THE “COMPANY”) PROPOSED ACQUISITION OF CL SOLUTIONS (CHINA) LIMITED (“CLS CHINA”), A COMPANY INCORPORATED IN HONG KONG, FOR AN AGGREGATE CONSIDERATION OF HKD25,000,000 (EQUIVALENT TO APPROXIMATELY RM10,638,298) TO BE SATISFIED BY A COMBINATION OF CASH AND THE ISSUANCE OF NEW ORDINARY SHARES OF RM0.10 EACH IN GRAND-FLO (“PROPOSED ACQUISITION”)

GRAND-FLO SOLUTION BERHAD

TypeAnnouncement
SubjectGRAND-FLO SOLUTION BERHAD (“GRAND-FLO” OR THE “COMPANY”)

PROPOSED ACQUISITION OF CL SOLUTIONS (CHINA) LIMITED (“CLS CHINA”), A COMPANY INCORPORATED IN HONG KONG, FOR AN AGGREGATE CONSIDERATION OF HKD25,000,000 (EQUIVALENT TO APPROXIMATELY RM10,638,298) TO BE SATISFIED BY A COMBINATION OF CASH AND THE ISSUANCE OF NEW ORDINARY SHARES OF RM0.10 EACH IN GRAND-FLO (“PROPOSED ACQUISITION”)
ContentsFurther to the Company’s announcement dated 10 September 2008, Kenanga Investment Bank Berhad (“KIBB”), on behalf of the Board of Directors of Grand-Flo, is pleased to announce that the Securities Commission (“SC”) had vide its letter dated 16 December 2008 (“Approval Letter”) given its approval under Section 212(5) of the Capital Markets and Services Act 2007 for the following:-

(i) Acquisition by Grand-Flo of the entire issued and paid-up share capital of CLS China, comprising 5,400,000 ordinary shares of HKD1.00 each, for a total purchase consideration of HKD25 million (approximately RM10.64 million) to be satisfied as follows:-

(a) Cash payment of HKD13.75 million (approximately RM5.85 million) to the existing shareholder of CLS China (“Vendor”); and

(b) The balance of HKD11.25 million (approximately RM4.79 million) via the issuance and allotment of 11,398,176 new Grand-Flo shares of RM0.10 each at an issue price of RM0.42 per share to the Vendor.

(ii) Listing and quotation for the new ordinary shares to be issued pursuant to the Proposed Acquisition, on the MESDAQ Market of Bursa Malaysia Securities Berhad (“Bursa Securities”).


The SC’s approval for the abovementioned is subject to the following conditions:-

(i) Commentary by the Board of Directors of Grand-Flo in the circular to shareholders on the reasonableness of the purchase consideration of CLS China, including whether the profit guarantee provided by the Vendor is achievable;

(ii) KIBB / Grand-Flo to disclose in the circular to shareholders:-

(a) The independent valuation of CLS China group of companies (“CLS China Group”) as at 31 March 2008, prepared by Greater China Appraisal Ltd in relation to the internal restructuring exercise of Computech Holdings Limited (“Greater China Valuation”); and

(b) The difference in assumption of CLS China Group’s future financial performance between the Greater China Valuation and the valuation carried out in relation to the Proposed Acquisition by Horwath Corporate Advisory Sdn Bhd based on the Discounted Cash Flow method;

(iii) KIBB / Grand-Flo to fully comply with the relevant requirements pertaining to the implementation of the above proposals as stipulated in the Listing Requirements of Bursa Securities for the MESDAQ Market; and

(iv) KIBB / Grand-Flo to inform the SC upon completion of the Proposed Acquisition.


Unless otherwise stated, the exchange rate of RM1.00 : HKD 2.35000 as at 9 September 2008 (being the date immediately preceding the date of the conditional Shares Acquisition Agreement entered into between Grand-Flo and the Vendor dated 10 September 2008 in respect of the Proposed Acquisition) is used throughout this announcement.

This announcement is dated 16 December 2008.


Announcement Info

Company NameGRAND-FLO SOLUTION BERHAD (MESDAQ Market) 
Stock Name GRANFLO    
Date Announced16 Dec 2008  
CategoryGeneral Announcement
Reference NoO&-081216-61172



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