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Provision of Financial Assistance to Omega Metal Industries Sdn Bhd ("OMI") by Success Electronics & Transformer Manufacturer Sdn Bhd ("SETM")

SUCCESS TRANSFORMER CORPORATION BERHAD

Type

Announcement
SubjectProvision of Financial Assistance to Omega Metal Industries Sdn Bhd ("OMI") by Success Electronics & Transformer Manufacturer Sdn Bhd ("SETM")

Contents :

1. Introduction
      The Board of Directors of Success Transformer Corporation Berhad (“STC” or “the Company”) wishes to inform the Exchange that SETM, a wholly owned subsidiary of Success Transformer Manufacturer Sdn Bhd (“STM”) which in turn is a wholly owned subsidiary of STC, had on 6 September 2005 resolved to provide financial assistance to OMI, a 65% owned subsidiary of STM, in the form of additional Corporate Guarantee of RM 0.45 million in favour of EON Bank Berhad ("EON") of 12th Floor, Wisma Cyclecarri, 288, Jalan Raja Laut, 50350 Kuala Lumpur as additional collateral for securing credit facilities granted by EON to OMI. Prior to the listing of STC, OMI had obtained banking facilities of up to RM 1.0 million granted by EON comprising of, inter alia, an overdraft, term loan, letter of credit, trust receipt, banker’s acceptance, shipping guarantee and bank guarantee facilities secured by corporate guarantee and indemnity from SETM in favour of EON.


    2. Information on SETM and OMI
      2.1 SETM
          SETM, a wholly owned subsidiary of STM, is a company incorporated on 12 July 1990 under the Companies Act, 1965 with an authorised share capital of RM 3,000,000 comprising 3,000,000 ordinary shares of RM 1.00 each. Its issued and paid-up share capital is RM 2,450,002 comprising 2,450,002 ordinary shares of RM 1.00 each.
          The principal activity of SETM is to manufacture electrical apparatus and industrial lighting.
          2.2 OMI
              OMI, a 65% owned subsidiary of STM is a company incorporated on 3 August 2000 under the Companies Act, 1965 with an authorised share capital of RM 500,000 comprising 500,000 ordinary shares of RM1.00 each. Its current issued and paid-up share capital is RM 252,000 comprising 252,000 ordinary shares of RM 1.00 each.
                The principal activity of OMI is to manufacture metal products focusing on metal casings.

              3. Rationale for the Financial Assistance

                OMI obtained additional credit facilities totaling RM 0.45 million from EON for working capital and term loan purposes. One of the conditions for granting the said facilities by EON is the provision of additional Corporate Guarantee of RM 0.45 million by SETM to serve as additional security for securing the said credit facilities. The financial assistance is necessary to facilitate the ordinary course of business of OMI .


              4. Financial Effects on the Provision of Financial Assistance

              4.1 Share Capital

              The provision of financial assistance will not have any effect on the issued and paid-up share capital of STC and its subsidiaries (“STC Group”).

              4.2 Net Tangible Assets ("NTA")

              The provision of financial assistance is not expected to have any material effect on the NTA of the STC Group.

              4.3 Earnings

              The provision of financial assistance is not expected to have any material effect on the earnings of the STC Group.

              4.4 Substantial Shareholders' Shareholding

              The provision of financial assistance will not have any effect on the substantial shareholders' shareholdings of STC.


              5. Interest of The Directors, Major Shareholders and Persons connected to Them
                Save as disclosed below, in so far as the Directors of STC are aware, none of the other directors, substantial shareholders of STC and/or persons connected with the Directors or substantial shareholders of STC, has any interest, direct or indirect in the provision of financial assistance.
                          DirectIndirect
                          DesignationNo. of
                          shares
                          %
                          No. of
                          shares
                          %
                          Interested Directors
                          Chong Che Chong #Non-Executive Chairman of STC, Director of SETM and OMI70,0000.0942,346,637(1)52.93
                          Tan Ah Bah @ Tan Ah Ping #Managing Director of STC, Director of SETM and OMI70,0000.0942,470,637 (2)53.09
                          Pan Kim Foon #Executive Director of STC, Director of SETM70,0000.0942,470,637(3)53.09
                          Chong Chee SiongAlternate Director of STC to Chong Che Chong, Director of SETM45,0000.06^^^^
                          Woh Way CheangExecutive Director of STC, Director of OMI81,0000.10--
                          Liang Kok BoonDirector of SETM 159,0000.13^^^^
                          Interested Major
                          Shareholders
                          Omega Attraction Sdn Bhd (OASB)
                          Tan Chung Ling
                          -

                          -
                          42,346,637

                          54,000
                          52.93

                          0.07
                          -

                          42,486,637(4)
                          -

                          53.11
                Notes:

                ^^ Holding less than 5% interest in OASB.

                # Is also an interested Major Shareholder.

                (1) Deemed interest by virtue of his direct and indirect interests in Wong Electrical Industries Sdn Bhd (WEISB), being a shareholder of STM and OASB.
                (2) Deemed interest by virtue of his wife, Pan Kim Foon and his direct interests in OASB, and his wife and daughter, Tan Chung Ling’s direct interests in STC.
                (3) Deemed interest by virtue of her husband, Tan Ah Bah @ Tan Ah Ping and her direct interests in OASB, and her husband and daughter, Tan Chung Ling’s direct interests in STC.
                (4) Deemed interest by virtue of her father, Tan Ah Bah @ Tan Ah Ping and her mother, Pan Kim Foon’s direct interests in STC, and her father and mother’s direct interests in OASB.



              6. Statement by the Directors
                Having considered all aspects of the provision of financial assistance, the Board of Directors of STC is of the opinion that the provision of financial assistance is necessary and reasonable and is in the best interest of the STC Group and not to the detriment of STC and its shareholders.


              7. Approvals Required
                As the amount of the financial assistance does not exceed 5% of the STC Group's latest audited NTA as at 31 December 2004 of RM 50.3 million, no shareholders' approval is required.


              This announcement is made on 6 September 2005.


              Announcement Info

              Company NameSUCCESS TRANSFORMER CORPORATION BERHAD  
              Stock Name SUCCESS    
              Date Announced6 Sept 2005  
              CategoryGeneral Announcement
              Reference NoCM-050906-60594



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