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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 RM10,947,628) (“PURCHASE CONSIDERATION”) 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 RM10,947,628) (“PURCHASE CONSIDERATION”) 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 and 16 December 2008 in respect of the Proposed Acquisition, Kenanga Investment Bank Berhad (“KIBB”), on behalf of the Board of Directors of Grand-Flo (“Board”), is pleased to announce herewith the status of the Proposed Acquisition’s conditions precedent pursuant to the share acquisition agreement entered into between Grand-Flo and CL Solutions Services Limited (“the Vendor”) dated 10 September 2008 (“SAA”).

As at 15 January 2009, the following conditions precedent to the Proposed Acquisition have been deemed fulfilled:-

(i) Grand-Flo being satisfied with the result or findings of a due diligence into the financial, legal, contractual, tax and trading position and financial prospects or future profitability of CLS China and its subsidiaries (collectively, the “Acquiree Group”) and their title to their respective assets, which was met on 15 January 2009;

(ii) the receipt of confirmatory proof from the chief financial officer of CLS China that all amount of receivables and payables between CL Solutions Services Limited (the “Vendor”) and its related companies and director(s), as well as the Acquiree Group have been fully settled, which was obtained on 15 January 2009;

(iii) the findings of the financial due diligence shall confirm that the Acquiree Group has a combined net tangible assets of at least HKD5,320,000 (equivalent to approximately RM2,263,830) including combined cash and bank balances of at least HKD4,000,000 (equivalent to approximately RM1,702,128) as at 30 June 2008, which was met on 15 January 2009; and

(iv) the Vendor shall furnish within ten (10) business days from the date of the SAA a Certificate of Incumbency duly issued by the British Virgin Islands (“BVI”) agent of the Vendor which include details of the directors and shareholders, registered office and any charges which may exist on the Vendor, as well as confirming that the Vendor is in good standing, and a Certificate of Good Standing duly issued by the BVI Companies Registry which shows that the Vendor is in good standing. The Certificate of Incumbency and Certificate of Good Standing both dated 5 September 2008 were obtained on 10 September 2008 and 11 September 2008 respectively.


In addition to the above, the parties to the SAA confirmed in writing on 15 January 2009 that the following conditions precedent are not applicable for the Proposed Acquisition:-

(ii) the approval or consent of the financiers of each company within the Acquiree Group for the Proposed Acquisition;

(iii) the approval or consent of any third party for the Proposed Acquisition;

(iv) the approval or consent of the relevant authority(ies) in the People’s Republic of China for the change in control, change of board of directors, change of legal representatives and/or change of address in Guangzhou CL Solutions Limited; and

(v) the approval or waiver of any regulatory requirement by any other relevant authorities, if required.


In view of the above and pursuant to the terms of the SAA, the following conditions precedent to the Proposed Acquisition are pending fulfillment as at 16 January 2009:-

(i) the approval of the shareholders of Grand-Flo for the Proposed Acquisition, the increase of its authorised share capital (if necessary) and the issuance and allotment of 11,398,176 new ordinary shares of Grand-Flo of RM0.10 each to the Vendor as part settlement towards the Purchase Consideration (“Consideration Shares”); and

(ii) the approval-in-principle of Bursa Malaysia Securities Berhad for the listing of and quotation for the Consideration Shares.


This announcement is dated 16 January 2009.


Announcement Info

Company NameGRAND-FLO SOLUTION BERHAD (MESDAQ Market) 
Stock Name GRANFLO    
Date Announced16 Jan 2009  
CategoryGeneral Announcement
Reference NoMI-090116-51364



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