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JSE LIMITED - Proposed Aqcuisition by Invicta Assian Holding PTE

Release Date: 15/10/2012 08:11
Code(s): JSER     PDF:  
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Proposed Aqcuisition by Invicta Assian Holding PTE

Invicta Asian Holdings Pte.Ltd. 
(Incorporated in the Republic of Singapore)
(Company Registration No.: 201223395H)


Kian Ann Engineering Ltd.

(Incorporated in the Republic of Singapore)

(Company Registration No.: 197101102H)



JOINT ANNOUNCEMENT


PROPOSED ACQUISITION BY INVICTA ASIAN HOLDINGS PTE. LTD. OF ALL THE ISSUED AND 
PAID-UP ORDINARY SHARES IN THE CAPITAL OF KIAN ANN ENGINEERING LTD.  BY WAY OF A SCHEME OF ARRANGEMENT



1. INTRODUCTION

The respective Boards of Directors of Invicta Asian Holdings Pte. Ltd. (the "Offeror") and Kian Ann Engineering Ltd. (the "Company", and together with its subsidiaries, the "Group") are pleased to announce the proposed acquisition (the "Acquisition") by the Offeror of all the issued and paid-up ordinary shares in the capital of the Company (the "Shares") by way of a scheme of arrangement (the "Scheme") in accordance with Section 210 of the Companies Act (Chapter 50 of Singapore) (the "Companies Act") and the Singapore Code on Take-overs and Mergers (the "Code"). 

In connection with the Acquisition, the Offeror and the Company have today entered into an implementation agreement (the "Implementation Agreement") in relation to the terms and conditions under which the Offeror and the Company will implement the Scheme. 


2. INFORMATION ON THE PARTIES

2.1	The Company. The Company was incorporated in Singapore on 6 October 1971. The Company was listed on the Official List of the Mainboard of the Singapore Exchange Securities Trading Limited ("SGX-ST") on 12 November 1996. 

	The Company is a distributor of heavy equipment parts and diesel engine spares. Its products are used for bulldozers, wheel loaders, trucks, motor graders, excavators, power generation sets and marine engines. It has the capacity to distribute more than 1.3 million item lines covering over 270 brands from 220 suppliers, to a global customer base of dealers and end-users in infrastructure development, construction, forestry, agriculture, mining and marine industries. 

The Company's market capitalisation as of the close of market trading on 12 October 2012, being the last full trading day preceding the date of this Joint Announcement (the "Announcement Date"), was approximately S$180 million. 

As at the Announcement Date, the Company has an issued and paid-up share capital of S$80,245,105.15, comprising 438,098,928 Shares (including 270,000 treasury shares).  

2.2	The Offeror and Invicta. The Offeror is an investment holding company incorporated in the the Republic of Singapore on 21 September 2012. It is wholly-owned by Invicta Offshore Holdings ("Invicta Holdco"), which in turn is wholly-owned by Invicta Holdings Limited ("Invicta"). Save for the entering into certain arrangements in connection with the Acquisition and the Scheme, the Offeror has not carried on any business since its incorporation. 

Invicta is one of the leading distributors of capital equipment, spare parts and engineering consumables in Southern Africa. Its operations consist of the import and distribution of a comprehensive range of bearings, seals, power transmission components, fasteners, drives, belting, filtration and hydraulics; the import and sale of machinery and related spare parts for the agriculture, earthmoving, turf grooming and golf-car markets; the distribution of a niche range of spare parts to the automotive and motorcycle industry; the import and distribution of wall and floor tiles and sanitary ware; and the import and distribution of material handling equipment and related spare parts. Invicta is headquartered in South Africa.

Invicta is listed on the Johannesburg Stock Exchange ("JSE Limited"). Its market capitalisation is currently approximately USD654 million and for the most recent financial year ended 31 March 2012, Invicta recorded a revenue of ZAR5,599 million (approximately USD650 million1) and a net profit of ZAR492 million (approximately USD57 million1). Invicta's main shareholders are institutional investors, investment funds and individuals, of which Dr. C.H. Wiese is the largest shareholder with a shareholding interest of over 35%. Dr. C.H. Wiese is a leading industrialist based in South Africa who has steered all companies under his direction to each become one of the leading players in their respective sectors in South Africa and in the wider African region.

As at the Announcement Date, the board of directors of the Offeror comprises:

(a) 	Mr. Craig Barnard;

(b)	Mr. Anthony Michael Sinclair; 

(c)	Mr. Geoffrey Edwin Balshaw; and

(d)	Mr. Lee Wei Hsiung. 


3. THE SCHEME

3.1 Scheme. The Scheme will involve, amongst other things, the following:

(a) the transfer of all the Shares held by the shareholders of the Company (the "Shareholders") to the Offeror; and

(b) in consideration of such transfer:

(i)	the Shareholders will receive from the Offeror a cash consideration of S$0.44 per Share (the "Offer Price"), other than in respect of LPK (as defined in paragraph 3.5(a) below) and LCC (as defined in paragraph 3.5(b) below) and to the extent contemplated in paragraphs 3.1(b)(ii) and 3.5 below; and

(ii)	LPK and LCC will swap their respective interests in the Company for a shareholding interest in the Offeror as set out in paragraph 3.5 below.
	
Pursuant to the Scheme, the Shares are to be transferred by the Shareholders to the Offeror (A) fully paid; (B) free from any mortgage, assignment of receivables, debenture, lien, hypothecation, charge, pledge, title retention, right to acquire, security interest, option, pre-emptive or other similar right, right of first refusal, restriction, third-party right or interest, any other encumbrance, condition or security interest whatsoever or any other type of preferential arrangement (including without limitation, a title transfer or retention arrangement) having similar effect ("Encumbrance"); and (C) together with all rights, benefits and entitlements as of the Announcement Date and thereafter attaching thereto, including the right to receive and retain all dividends, rights and other distributions (if any) declared by the Company on or after the Announcement Date but not including the dividend of 0.82 cents per Share announced by the Company in its full year financial statement released on the SGX-NET on 24 August 2012, which is expected to be paid on or about 14 November 2012. 

At present, the Company has no intention of declaring any other dividends. However, in the event that any dividend, other distribution or return of capital is declared by the Company on or after the Announcement Date other than the Interim Dividend, the Offeror reserves the right to reduce the Offer Price by the amount of such dividend, distribution or return of capital. For the purpose of the Implementation Agreement and this Joint Announcement, "Interim Dividend" shall mean any interim dividends to be declared and/or paid by the Company in the event that the Court Meeting (as defined below) is not convened on or before 8 February 2013, provided always that the dividend payout ratio of any such interim dividends shall be consistent with the previously announced interim dividends declared by the Company for the financial year ended 30 June 2012. 

3.2	Delisting. On the date on which the Scheme becomes effective and binding in accordance with its terms (the "Effective Date"), the Company will become a wholly-owned subsidiary of the Offeror. Consequently, the Company will not be able to meet the listing requirements of the SGX-ST. An application will therefore be made to the SGX-ST to delist the Company from the Official List of the SGX-ST and such delisting, upon approval by SGX-ST, will take place shortly after the Effective Date.

3.3	Switch Option. Pursuant to the terms of the Implementation Agreement, subject to prior consultation with the Securities Industry Council of Singapore ("SIC"), the Company agrees and acknowledges that in the event of a competing offer, the Offeror shall have the right at its discretion to elect to proceed by way of a voluntary conditional cash offer for the Shares ("Offer") (in lieu of proceeding with the Acquisition by way of the Scheme) in accordance with the Code (the "Switch Option"). In such an event, the Offeror will make the Offer at a consideration per Share greater than the Offer Price, and conditional upon a level of acceptances set at (a) only more than 50% of the Shares to which the Offer relates and not conditional on a higher level of acceptances, or (b) such higher level of acceptances as the SIC may approve. If the Offeror exercises the Switch Option, the Company and the Offeror agree that (notwithstanding any provision to the contrary in the Implementation Agreement) the Implementation Agreement shall terminate with effect from the date of announcement of the Offer save for certain surviving provisions.

3.4	Scheme Document. Further information on the Scheme and the terms and conditions upon which the Scheme will be implemented will be set out in the document to be issued by the Company to the Shareholders (the "Scheme Document").  

3.5	Management Equity Arrangements. It is the intention of the Offeror that the following personnel, who are part of the key management team of the Group, will continue to be involved in the business of the Group:

(a) 	Mr. Law Peng Kwee ("LPK") (Co-Founder and Managing Director);

(b)	Mr. Kevin Law Cher Chuan ("LCC") (Group General Manager and Executive Director); and

(c)	Mr. Loy Soo Chew ("LSC") (General Manager and Executive Director),

(collectively, the "Key Personnel").

Each of the Key Personnel has entered into a subscription agreement (the "Subscription Agreement") with the Offeror pursuant to which such Key Personnel will subscribe for ordinary shares in the capital of the Offeror (the "Offeror Shares") (the "Subscription"). The Subscription is conditional upon the Scheme becoming effective and binding in accordance with its terms, and the subscription price for each Offeror Share shall be the same price as that paid by Invicta Holdco for each Offeror Share. 

Upon the Scheme becoming effective in accordance with its terms and following the completion of the Subscription, it is envisaged that the resultant shareholding in the Offeror would be as follows:
	 
Shareholder
Shareholding Percentage in Offeror
No. of Offeror Shares
Invicta Holdco
75.39%
7,500
LPK
20.10%
2,000
LCC
2.51%
250
LSC
2.00%
199
Total
100.0%
9,949
	
Pursuant to LPK's Irrevocable Undertaking (as defined in paragraph 3.6 below), LPK has agreed to pay for the subscription price in respect of the Offeror Shares that he will subscribe for by setting off in full such amount against an equivalent amount of the total proceeds which would otherwise be payable by the Offeror as consideration for Shares owned or controlled by him pursuant to the Acquisition. 

Pursuant to the Subscription Agreement: 

(i)	LCC has agreed (A) to set off the total proceeds which would otherwise be payable by the Offeror as consideration for 370,000 Shares owned or controlled by him pursuant to the Acquisition against an equivalent amount of the subscription price in respect of the Offeror Shares that he will subscribe for, and (B) pay for the balance of the subscription price in respect of such Offeror Shares in cash (the "LCC Cash Proceeds"); and

(iii)	LSC has agreed to pay for the subscription price in respect of such Offeror Shares in cash (the "LSC Cash Proceeds").

	Pursuant to loan agreements entered into with LCC and LSC respectively, LPK has agreed to make available loans to LCC and LSC for the purpose of the settlement of the LCC Cash Proceeds and the LSC Cash Proceeds. In addition, LPK has also given the Offeror an irrevocable undertaking to set-off in full the cash proceeds that would otherwise be payable to LPK in respect of 12,722,336 Shares owned or controlled by LPK pursuant to the Acquisition, against LCC and LSC's respective obligations to pay the LCC Cash Proceeds and LSC Cash Proceeds.

For the purposes of this Joint Announcement, the aggregate amount which would otherwise be payable by the Offeror as consideration for Shares owned or controlled by LPK and LCC pursuant to the Scheme and the Acquisition, and which will, pursuant to LPK's Irrevocable Undertaking and the Subscription Agreement be set-off against the subscription price in respect of Offeror Shares to be subscribed for by the Key Personnel, shall be referred to as the "Set-Off Amount".

The SIC has confirmed that the arrangements referred to in this paragraph 3.5 do not constitute special deals for the purposes of Rule 10 of the Code, subject to the independent financial adviser to the Company publicly stating that in its opinion, such arrangements are fair and reasonable.

3.6	Irrevocable Undertakings. Certain Shareholders ("Undertaking Shareholders") have each given separate irrevocable undertakings to the Offeror (collectively, the "Irrevocable Undertakings") to, inter alia, vote, or procure the voting of, the Shares set out in the respective Irrevocable Undertakings, in favour of the Scheme at the Court Meeting, on and subject to the terms set out in their respective Irrevocable Undertakings.

If the Offeror exercises the Switch Option, and the Offer is made by the Offeror at a consideration per Share greater than the Offer Price, the Undertaking Shareholders will, subject to the terms and conditions set out in their respective Irrevocable Undertakings, undertake to accept or procure the acceptance of the Offer in respect of the Shares set out in the respective Irrevocable Undertakings, and their obligations under the Irrevocable Undertakings will apply mutatis mutandis to the Offer.

Each Irrevocable Undertaking will terminate and cease to have any effect on the earliest of:

(a)	the date the Scheme lapses or does not become effective for any reason other than a breach by the relevant Undertaking Shareholder of any of such Undertaking Shareholder's obligations in the Irrevocable Undertaking and other than as a result of the exercise of the Switch Option by the Offeror; or

(b)	the date the Scheme becomes effective in accordance with its terms or in the case where the Offeror exercises the Switch Option, the earlier of the date the Offer lapses or is withdrawn without having become unconditional in all respects and the successful completion of the Offer.

A list of Undertaking Shareholders and their respective interests in the Company is set out in Schedule 1 to this Joint Announcement.


4. RATIONALE FOR THE ACQUISITION 

4.1	Company is an Excellent Strategic Fit for Invicta

Invicta is pursuing a selective international expansion strategy focused on investing in opportunities in stable countries with the most attractive growth fundamentals.

Invicta believes that the Company will be an excellent strategic fit. Invicta also believes that an acquisition of the Company will create a source hub in Asia and enable the combined group to leverage on operations in Africa to create a more sizeable spare parts group. With Singapore, Malaysia and Indonesia offering a unique combination of industry growth potential and stable macro economic backdrop, Invicta believes it will be able to use the Company as a platform for further expansion in the region.

4.2 	Opportunity for Shareholders to Realise their Investment

The Acquisition represents a clean cash exit opportunity for Shareholders to realise their entire investment at an attractive premium over the market prices of the Shares prior to the Holding Announcement Date (as defined below). 

As stated in paragraph 5 below, the Offer Price represents a premium of approximately 96%, 78%, 68% and 59% over the 12-month, six (6)-month, three (3)-month and one (1)-month volume weighted average prices ("VWAP") prior to 17 August 2012 (being the date on which the Company released the holding announcement in respect of an approach from a party in relation to a possible transaction involving the shares of the Company) (the "Holding Announcement Date") and including the Holding Announcement Date.  

The Offer Price also represents a premium of approximately 42% and 7% over the last transacted price per Share on the Holding Announcement Date and prior to the Announcement Date respectively. 


5. FINANCIAL EVALUATION OF THE OFFER PRICE

The figures set out in this paragraph are based on data extracted from Bloomberg as at the 12 October 2012, being the last full trading day preceding the Announcement Date. 

The Offer Price represents the following premia over the market prices of the Shares:  

Description
Share Price (S$)
Premium over Share Price (%)(a) VWAP for the 12-month period prior to and including the Holding Announcement Date
S$0.22596%
(b) VWAP for the six (6)-month period prior to and including the Holding Announcement Date
S$0.247
78%
(c) VWAP for the three (3)-month period prior to and including the Holding Announcement Date
S$0.263
68%
(d) VWAP for the one (1)-month period prior to and including the Holding Announcement Date
S$0.277
59%
(e) Last transacted price per Share on 16 August 2012 (being the last full day on which the Shares were traded prior to the Holding Announcement Date)
S$0.30
47%
(f) Last transacted price per Share on 17 August 2012 (being the Holding Announcement Date)
S$0.31
42%
(g) Last transacted price on 12 October 2012 (being last day on which the Shares were traded prior to the Announcement Date)
S$0.41
7%Source: Bloomberg


6. CONDITIONS PRECEDENT 

The Scheme is conditional upon the satisfaction or waiver (as the case may be) of a number of conditions precedent (the "Scheme Conditions") which are set out in Schedule 2 to this Joint Announcement, including, without limitation, the following: 

(a) the approval from the SGX-ST of the Scheme Document and the proposed delisting of the Company pursuant thereto;

(b) the approval of the Scheme by a majority in number of Shareholders present and voting, either in person or by proxy, at a meeting of the Shareholders to be convened (upon the sanction by the High Court of the Republic of Singapore (the "Court")) to approve the Scheme, and any adjournment thereof (the "Court Meeting"), such majority holding not less than 75 per cent. (75%) in value of the Shares held by the Shareholders present and voting at the Court Meeting; 

(c) the sanction of the Scheme by the Court; and

(d) the approval (to the extent required) under the Applicable Laws of the Republic of South Africa, including the JSE Limited and the South African Reserve Bank.

Upon satisfaction and/or waiver of the Scheme Conditions , the Scheme shall become effective in accordance with its terms on the date of registration of the order of the Court sanctioning the Scheme under Section 210 of the Companies Act ("Court Order") with the Accounting and Corporate Regulatory Authority of Singapore ("ACRA"). Under the terms of the Implementation Agreement, the Effective Date shall be no later than 180 days from the date of the Implementation Agreement (or such other date as the Offeror and the Company may agree).

The SIC has confirmed that the Scheme is exempted from Rules 14, 15, 16, 17, 20.1, 21, 22, 28, 29, 33.2 and Note 1(b) to Rule 19 of the Code, subject to, inter alia, the following conditions: 

(i) the common substantial shareholders of the Offeror and the Company abstain from voting on the Scheme;

(ii) the Offeror and its concert parties abstain from voting on the Scheme; 

(iii) the directors of the Company who are also directors of the Offeror abstain from making a recommendation on the Scheme to the Shareholders; 

(iv) the Company appoints an independent financial adviser to advise the Shareholders on the Scheme;

(v) the Scheme Document contains advice to the effect that by voting for the Scheme, the Shareholders are agreeing to the Offeror and its concert parties acquiring or consolidating effective control on the Company without having to make a general offer for the Company; and

(vi) the Scheme Document discloses the names of the Offeror and its concert parties, their current voting rights in the Company as at the latest practicable date in relation to the Scheme Document and their voting rights in the Company after the Scheme.  
       

7. TERMINATION 

7.1	Right to Terminate. The Implementation Agreement provides that the Implementation Agreement may be terminated at any time on or prior to the date falling on the business day immediately preceding the Effective Date (the "Record Date") (provided that the party seeking termination does so only after it has had prior consultation with the SIC):

(a) Court Order: by either the Offeror or the Company, if any court of competent jurisdiction or Governmental Agency (as defined in the Implementation Agreement) has issued an order, decree or ruling or taken any other action permanently enjoining, restraining or otherwise prohibiting the Scheme, the Acquisition or any part thereof, or has refused to do anything necessary to permit the Scheme, the Acquisition or any part thereof, and such order, decree, ruling, other action or refusal shall have become final and non-appealable;

(b) Breach: either (i) by the Offeror, if the Company is in material breach of any provision of the Implementation Agreement (other than a provision which is qualified by a materiality test, in which case any breach shall suffice) or has failed to perform and comply in all material respects with any matters referred to in the Scheme Conditions set out in paragraphs 7 (in relation to Prescribed Occurrences (as defined in Schedule 3 and as set out in Part II of Schedule 3 to this Joint Announcement) relating to the Company) and/or 8 of Schedule 2 to this Joint Announcement, on or prior to the Record Date; or (ii) by the Company, if the Offeror is in material breach of any provision of the Implementation Agreement (other than a provision which is qualified by a materiality test, in which case any breach shall suffice) or has failed to perform and comply in all material respects with any matters referred to in the Scheme Conditions set out in paragraphs 7 (in relation to Prescribed Occurrences (as defined in Schedule 3 and as set out in Part I of Schedule 3 to this Joint Announcement) relating to the Offeror)) and/or 9 of Schedule 2 to this Joint Announcement, on or prior to the Record Date, provided that either the Company or the Offeror, as the case may be, has given written notice to the other party of the alleged breach and stating its intention to terminate the Implementation Agreement ("Notice of Breach"). In this circumstance, the defaulting party shall be given a period of 14 calendar days from the date of the Notice of Breach (or such longer period as may be agreed to by the non-defaulting party in writing) (the "Remedy Period") to remedy such breach (insofar as capable of remedy) to the reasonable satisfaction of the non-defaulting party, failing which the Implementation Agreement shall be terminated on the date of the expiry of the Remedy Period; and

(c) Shareholders' Approvals: by either the Offeror or the Company, if the resolutions submitted to the Court Meeting are not approved (without amendment) by the requisite majority of the Shareholders.      

7.2	Non-fulfilment of Conditions Precedent. Notwithstanding anything contained in the Implementation Agreement, the Implementation Agreement shall terminate if any of the Scheme Conditions has not been satisfied (or, where applicable, has not been waived) by a date falling 180 days from the date of the Implementation Agreement (or such other date as the Offeror and the Company may agree) and the non-fulfilment of any such Scheme Condition is material in the context of the Acquisition, except that:

(a) in the event of any non-fulfilment of the Scheme Conditions set out in paragraphs 7 (in relation to Prescribed Occurrences relating to the Company as set out in Part II of Schedule 3 to this Joint Announcement), 8, 10 11 and/or 12 of Schedule 2 to this Joint Announcement, the Offeror may only rely on such non-fulfilment of any such Scheme Condition to terminate the Implementation Agreement with the prior consultation and approval of the SIC; and

(b) in the event of any non-fulfilment of the Scheme Conditions set out in paragraphs 7 (in relation to Prescribed Occurrences relating to the Offeror as set out in Part I of Schedule 3 to this Joint Announcement) and/or 9 of Schedule 2 to this Joint Announcement, the Company may only rely on such non-fulfilment of any such Scheme Condition to terminate the Implementation Agreement with the prior consultation and approval of the SIC.

If the Implementation Agreement is not terminated because the SIC does not for any reason consent to the same, the non-termination of the Implementation Agreement does not amount to a waiver of any claims or rights which the Offeror or the Company may have against the other in relation to the non-fulfilment of the relevant Scheme Conditions set out in paragraphs 7, 8, 9, 10, 11 and 12 of Schedule 2 to this Joint Announcement.


8. CONFIRMATION OF FINANCIAL RESOURCES 

Standard Chartered Bank ("SCB"), being the financial adviser to the Offeror in connection with the Acquisition and the Scheme, has confirmed that sufficient financial resources are available to the Offeror to satisfy in full the aggregate Offer Price payable by it for all the Shares to be acquired by it in the event the Scheme is completed (excluding the Set-Off Amount). 


9. INDEPENDENT FINANCIAL ADVISER

	The directors of the Company who are considered to be independent for the purposes of the Scheme (collectively, the ("Independent Directors")) will be appointing an independent financial adviser ("IFA") to advise them on the Scheme for the purpose of making a recommendation to the Shareholders in connection with the Scheme. In the meantime, the Shareholders are advised to refrain from taking any action in relation to their Shares which may be prejudicial to their interests until they or their advisers have considered the information and the recommendations of the Independent Directors as well as the advice of the IFA set out in the Scheme Document to be issued in due course.


10. SCHEME DOCUMENT 

	Full details of the Scheme (including the recommendation of the Independent Directors along with the advice of the IFA) and notice of the Court Meeting to approve the Scheme will be contained in the Scheme Document to be despatched to the Shareholders in due course. In the meantime, Shareholders are advised to exercise caution when trading in their Shares, pending receipt of the Scheme Document.

Persons who are in doubt as to the action they should take should consult their stockbroker, bank manager, solicitor, accountant or other professional advisers immediately.


11. DISCLOSURES

11.1	Company

Save as disclosed below and in this Joint Announcement, no director or controlling shareholder of the Company has any interest in the Scheme (other than by reason only of being a director or shareholder of the Company). 

As noted in paragraph 3.5 above, each of the Key Personnel have entered into the Subscription Agreement for the subscription of the Offeror Shares and pursuant to the irrevocable undertakings given by LPK and the Subscription Agreement, the total proceeds which would otherwise be payable by the Offeror as consideration pursuant to the Acquisition for such number of Shares owned or controlled by LPK and LCC as referred to in paragraph 3.5 above, will be set-off in full against the respective obligations of LPK, LCC and LSC to pay for the subscription price in respect of the Offeror Shares subscribed for by each of them. In addition, as mentioned in paragraph 3.6 above, the Undertaking Shareholders have given Irrevocable Undertakings to, inter alia, vote their respective Shares in favour of the Scheme at the Court Meeting.

11.2	Offeror and SCB  

Saved as disclosed in this Joint Announcement, as at the Announcement Date, none of (a) the Offeror, Invicta Holdco and Invicta (the "Invicta Entities"), (b) the directors of the Invicta Entities and (c) SCB:  

(i) 	owns, controls or has agreed to acquire any securities of the Company; 

(ii) 	has received any irrevocable undertaking from any person to vote and/or procure the voting of all of the Shares to approve the Scheme and any other matter necessary or proposed to implement the Scheme; or

(iii)	has, in relation to any relevant securities of the Company:

(A)	granted a security interest to another person, whether through a charge, pledge or otherwise;

(B)	borrowed from another person (excluding borrowed securities which have been on-lent or sold); or

(C)	lent to another person.  

11.3	In the interest of confidentiality, the Offeror has not made enquires in respect of certain other parties who are or may be deemed to be acting in concert with it in connection with the Scheme. Further enquiries will be made in respect of such parties and the relevant disclosures, if any, will be made in the Scheme Document. For the same reason, SCB will be making the necessary enquiries in respect of its group subsequent to this Joint Announcement and the relevant disclosures, if any, will be made in the Scheme Document.


12. OVERSEAS SHAREHOLDERS

This Joint Announcement does not constitute an offer to sell or the solicitation of an offer to subscribe for or buy any security, nor is it a solicitation of any vote or approval in any jurisdiction, nor shall there be any sale, issuance or transfer of the securities referred to in this Joint Announcement in any jurisdiction in contravention of applicable law. 

The release, publication or distribution of this Joint Announcement in certain jurisdictions may be restricted by law and therefore persons in any such jurisdictions into which this Joint Announcement is released, published or distributed should inform themselves about and observe such restrictions.

Copies of this Joint Announcement and any formal documentation relating to the Scheme are not being, and must not be, directly or indirectly, mailed or otherwise forwarded, distributed or sent in or into or from any jurisdiction where the implementation of the Scheme would violate the law of that jurisdiction (the "Restricted Jurisdiction") and persons receiving such documents (including custodians, nominees and trustees) must not mail or otherwise forward, distribute or send them in or into or from any Restricted Jurisdiction. 

The applicability of the Scheme to persons not resident in Singapore may be affected by the laws of the relevant jurisdiction. Shareholders who are not resident in Singapore should keep themselves informed of, and observe, any applicable restrictions or prohibitions. Further details in relation to overseas shareholders will be contained in the Scheme Document. 


13. DOCUMENTS FOR INSPECTION

Copies of the Implementation Agreement, the Irrevocable Undertakings and the documents relating to the Management Equity Arrangements set out in paragraph 3.5 of this Joint Announcement will be made available for inspection during normal business hours at the registered office of the Company for three (3) months from the Announcement Date or up until the Effective Date, whichever is the later.


14. RESPONSIBILITY STATEMENTS

14.1	Offeror

The directors of the Offeror (including those who may have delegated detailed supervision of this Joint Announcement) have taken all reasonable care to ensure that the facts stated and opinions expressed in this Joint Announcement are fair and accurate and that there are no other material facts not contained in this Joint Announcement, the omission of which would make any statement in this Joint Announcement misleading. 

Where any information has been extracted or reproduced from published or otherwise publicly available sources or obtained from the Company, the sole responsibility of the directors of the Offeror has been to ensure through reasonable enquiries that such information is accurately extracted from such sources or, as the case may be, reflected or reproduced in this Joint Announcement.

The directors of the Offeror jointly and severally accept full responsibility accordingly.

14.2	Company 

The directors of the Company (including those who may have delegated detailed supervision of this Joint Announcement) have taken all reasonable care to ensure that the facts stated and opinions expressed in this Joint Announcement are fair and accurate and that there are no other material facts not contained in this Joint Announcement, the omission of which would make any statement in this Joint Announcement misleading.

Where any information has been extracted or reproduced from published or otherwise publicly available sources or obtained from the Offeror, the sole responsibility of the directors of the Company has been to ensure through reasonable enquiries that such information is accurately extracted from such sources or, as the case may be, reflected or reproduced in this Joint Announcement.

The directors of the Company jointly and severally accept full responsibility accordingly.


15 October 2012




BY ORDER OF THE BOARD OF
INVICTA ASIAN HOLDINGS PTE. LTD.

BY ORDER OF THE BOARD OF
KIAN ANN ENGINEERING LTD.




Forward-Looking Statements

All statements other than statements of historical facts included in this Joint Announcement are or may be forward-looking statements. Forward-looking statements include but are not limited to those using words such as "seek", "expect", "anticipate", "estimate", "believe", "intend", "project", "plan", "strategy", "forecast" and similar expressions or future or conditional verbs such as "will", "would", "should", "could", "may" and "might". These statements reflect the Offeror's or the Company's (as the case may be) current expectations, beliefs, hopes, intentions or strategies regarding the future and assumptions in light of currently available information. Such forward-looking statements are not guarantees of future performance or events and involve known and unknown risks and uncertainties. Accordingly, actual results may differ materially from those described in such forward-looking statements. Shareholders and investors of the Offeror and the Company should not place undue reliance on such forward-looking statements, and neither the Offeror, the Company nor SCB undertakes any obligation to update publicly or revise any forward-looking statements.


Disclosure of Dealings

The associates (as defined under the Code, and which includes all substantial shareholders) of the Company and the Offeror are hereby reminded to disclose their dealings in any securities of the Company in accordance with Rule 12 of the Code.


SCHEDULE 1

UNDERTAKING SHAREHOLDERS

The Undertaking Shareholders and their respective interests in the Company are as follows:

S/N
Name of Shareholder
Number of Shares 
Number of Shares as a Percentage of the Total Number of Shares(1)
1.
Lau Hung Swee & Sons Pte Ltd
21,072,029(2)
4.8%
2.
Low Han Cheong
54,984,980
12.6%
3.
Lau Hwee Beng
44,530,320
10.2%
4.
LPK
109,664,671(2)
25.05%
5.
Bio-Green Agritech Pte Ltd
1,700,000
0.4%
6.
Lucy Lim Chye Eng
1,330,000
0.3%
7.
Farah Lau
92,500
0.02%

Total
233,374,500
53.42%Notes:

(1)	Based on 437,828,928 Shares (excluding 270,000 treasury shares) as at the date hereof.

(2)	LPK holds 11,416,470 Shares and is deemed interested in 98,248,201 Shares pursuant to a sale and purchase agreement dated on or around the date of this Joint Announcement entered into between Lau Hung Swee & Sons Pte Ltd and LPK for the sale of 98,248,201 Shares by Lau Hung Swee & Sons Pte Ltd to LPK to be completed on or around the date of this Joint Announcement. 
 


SCHEDULE 2

SCHEME CONDITIONS 

All capitalised terms used and not defined in this Joint Announcement shall have the same meanings given to them in the Implementation Agreement, a copy of which is available for inspection at the respective registered office of the Company during normal business hours for three (3) months from the date of this Joint Announcement or until the Effective Date, whichever is the later.

The Acquisition is conditional upon:

1. Offeree Shareholders' Approval: the approval of the Scheme by the Shareholders in compliance with the requirements of Section 210(3) of the Companies Act;

2. Court Order: the grant of the Court Order by the Court and such Court Order having become final;

3. No Injunctions: no injunction or other order being issued by any court of competent jurisdiction or other legal restraint or prohibition preventing the consummation of the Scheme or the Acquisition or any part thereof;

4. ACRA Registration: the registration of the Court Order with ACRA;

5. Regulatory Approvals: all Regulatory Approvals having been obtained prior to the Record Date, and not withdrawn or revoked on or before the Record Date, including without limitation, the following:

(a) confirmation from the SIC that Rules 14, 15, 16, 17, 20.1, 21, 22, 28, 29 and 33.2 and Note 1(b) to Rule 19 of the Code shall not apply to the proposed Scheme, subject to any conditions the SIC may deem fit to impose; 

(b) the approval-in-principle from the SGX-ST of the Scheme Document and the proposed delisting of the Company from the Mainboard of the SGX-ST; 

(c) confirmation from the SIC that the arrangement whereby LPK and LCC will swap all or part of their respective shareholding interests in the Company for an equivalent stake in the Offeror would not be regarded as a prohibited special deal for the purpose of Rule 10 of the Code and would not prevent LPK and LCC from voting their Shares at the Court Meeting; and

(d) any requisite approvals to the extent required under the Applicable Laws of the Republic of South Africa having regard to the transaction contemplated in terms of the Implementation Agreement, including the JSE Limited and the South African Reserve Bank;

6. Authorisations: prior to the Record Date, in addition to the approvals mentioned in paragraph 5 above:

(a) in relation to the Offeror, all other authorisations, consents, waivers, clearances, permissions and approvals as are necessary or required by the Offeror under any and all Applicable Laws, from any other relevant Governmental Agencies, and under any instrument, contract, document or agreement to which the Offeror is a party, for or in respect of the implementation of the Scheme and the Acquisition; and

(b) in relation to the Company, all other authorisations, consents, waivers, clearances, permissions and approvals as are necessary or required by the Company under any and all Applicable Laws, from any other relevant Governmental Agencies, and under any instrument, contract, document or agreement to which the Company is a party, for or in respect of the implementation of the Scheme and the Acquisition, 

	having been obtained, and not withdrawn or revoked on or before the Record Date; 

7. No Prescribed Occurrence: between the date of the Implementation Agreement and the Record Date, no Prescribed Occurrence in relation to the Company (as set out in Part II of Schedule 3) or the Offeror (as set out in Part I of Schedule 3) (as the case may be) occurring, other than as required or contemplated by the Implementation Agreement or pursuant to the Acquisition;

8. The Company's Warranties and the Company's Covenants:

(a) the Company's Warranties being true and correct in all respects as of the date of the Implementation Agreement and as of the Record Date as though made on and as of that date and for this purpose only, where there is an express reference in any Company's Warranty to the "date of the Implementation Agreement", that reference is to be construed as a reference to the Record Date to the extent applicable; and

(b) the Company having, as of the Record Date, performed and complied in all respects with all covenants and agreements contained in the Implementation Agreement (including the undertakings set out in Clause 6.2 of the Implementation Agreement) which are required to be performed by or complied with by it, on or prior to the Record Date;

9. The Offeror's Warranties and the Offeror's Covenants:

(a) the Offeror's Warranties being true and correct in all respects as of the date of the Implementation Agreement and as of the Record Date as though made on and as of that date, and for this purpose only, where there is an express reference in any Offeror's Warranty to the "date of the Implementation Agreement", that reference is to be construed as a reference to the Record Date to the extent applicable; and

(b) the Offeror having, as of the Record Date, performed and complied in all respects with all covenants and agreements contained in the Implementation Agreement (including the undertakings set out in Clause 6.3 of the Implementation Agreement) which are required to be performed by or complied with by it, on or prior to the Record Date;

10. Irrevocable Undertakings: contemporaneous with the execution of the Implementation Agreement, each of the Undertaking Shareholders delivering to the Offeror his respective Irrevocable Undertaking to vote all their Shares in favour of the Scheme at the Court Meeting;

11. Material Adverse Event: there being no event occurring from the Announcement Date which has the effect of causing a diminution in the Group's consolidated equity attributable to the owners of the parent after deducting the value of intangible assets and goodwill (the terms "equity attributable to the owners of the parent", "intangible assets" and "goodwill" for such purpose shall have the same meaning as the respective terms in the financial statements of the Company as at 31 March 2012 and 30 June 2012) to an amount below S$149,686,070.79 (as reflected in the financial statements of the Company as at 31 March 2012) at any time until the Record Date, provided that:

(a) any diminution in value of any item of the assets or increase in value of any item of the liabilities of the Group arising from currency translation shall not be taken into account;

(b) any increase or decrease in value of any item of the assets due to a revaluation of the assets of the Group subsequent to 31 March 2012 shall not be taken into account;

(c) any diminution in value of the Group's consolidated equity attributable to the owners of the parent due to the following shall not be taken into account:

(i) 	the payment of dividends to Shareholders, so long as the total dividend paid between 31 March 2012 and the Record Date does not exceed S$5,036,000;

(ii)	the amount of S$59,164.61 (being the aggregate amount paid by the Company (including charges) pursuant to the buy-back of an aggregate of 270,000 Shares undertaken by the Company in May 2012 and June 2012); and

(iii)	the amount of computer software costs, so long as the total amount does not exceed  S$193,947.00; and

(d) the computation of the Groups consolidated equity attributable to the owners of the parent shall be on a basis consistent with the Singapore Financial Reporting Standards principles and the historical accounting policies adopted by the Company; and

12. Major Customers and Major Suppliers: between the Announcement Date and the Record Date, there being no loss of any Major Customer or Major Supplier Group (other than by reason of a Group having terminated such relationship(s) in writing) nor any written notice given by any Major Customer or Major Supplier Group indicating that it/they wish(es) to cease being a customer of, or supplier(s) to, the Group.

For these purposes:

(a)	a "Major Customer" means a major customer that had contributed five per cent. (5%) or more to the gross revenue of the Group as disclosed and reflected in the audited consolidated financial statements of the Group for the financial year ended 30 June 2012; and

(b)	a "Major Supplier Group" means such number of suppliers which collectively accounted for fifteen per cent. (15%) or more of the Group's total purchases for the financial year ended 30 June 2012, Provided That the loss of a supplier shall be disregarded for the purposes of this Scheme Condition if the Company is able to satisfy the Offeror that the loss of such supplier will not have an adverse impact (including without limitation, from the perspective of prospective revenue, profitability and working capital investment) on the business of the Group.


SCHEDULE 3

PRESCRIBED OCCURRENCES

All capitalised terms used and not defined in this Joint Announcement shall have the same meanings given to them in the Implementation Agreement, a copy of which is available for inspection at the respective registered office of the Company during normal business hours for three (3) months from the Announcement Date or up until the Effective Date, whichever is the later. 

For the purpose of the Implementation Agreement and in this Joint Announcement, "Prescribed Occurrence", in relation to the Offeror or the Company, as the case may be, means any of the following: 


PART I  IN RELATION TO THE OFFEROR 

1. Injunction: an injunction or other order issued against the Offeror by any court of competent jurisdiction or other legal restraint or prohibition preventing the consummation of the Scheme;

2. Winding Up: the making of an order by a court of competent jurisdiction for the winding up of the Offeror or the Offeror resolving that it be wound up; 

3. Appointment of Liquidator, Judicial Manager, Receiver: the appointment of a liquidator, provisional liquidator, judicial manager and/or provisional judicial manager of the Offeror, or receiver or manager over all or a part of the assets or undertakings of the Offeror; 

4. Composition: the Offeror entering into any arrangement or general assignment or composition for the benefit of its creditors generally;

5. Insolvency: the Offeror becoming or being deemed by law or a court of competent jurisdiction to be insolvent, or stops or suspends or defaults on, or threatens to stop or suspend or default on, payment of its debts of a material amount as they fall due;

6. Cessation of Business: the Offeror ceases or threatens to cease for any reason to carry on business in its usual and ordinary course; 

7. Breach of the Implementation Agreement: the Offeror being in material breach of any of the provisions of the Implementation Agreement; or 

8. Analogous Event: any event occurs which, under the laws of any jurisdiction, has an analogous or equivalent effect to any of the foregoing event(s).


PART II  IN RELATION TO THE COMPANY 

1. Conversion of Shares:  the Company converting all or any of its shares into a larger or smaller number of shares;

2. Share Buy-back: the Company undertaking any share buy-backs pursuant to its existing share buy-back mandate;

3. Reduction of Share Capital: the Company resolving to reduce its share capital in any way;

4. Allotment of Shares: the Company making an allotment of, or granting an option to subscribe for, any shares or securities convertible into shares or agreeing to make such an allotment or to grant such an option or convertible security, or any subsidiary of the Company doing any act of the foregoing with respect to its own securities;

5. Issuance of Debt Securities: the Company (or any subsidiary of the Company) issuing or agreeing to issue, convertible notes or other debt securities;

6. Injunction: an injunction or other order issued against the Company by any court of competent jurisdiction or other legal restraint or prohibition preventing the consummation of the Scheme;

7. Winding Up: the making of an order by a court of competent jurisdiction for the winding up of the Company (or any subsidiary of the Company) or the Company (or any subsidiary of the Company) resolving that it be wound up; 

8. Appointment of Liquidator, Judicial Manager, Receiver: the appointment of a liquidator, provisional liquidator, judicial manager, provisional judicial manager and/or other similar officer of the Company (or any subsidiary of the Company), or receiver or manager over all or a part of the assets or undertakings of the Company;

9. Composition: the Company (or any subsidiary of the Company) entering into any arrangement or general assignment or composition for the benefit of its creditors generally; 

10. Insolvency: the Company (or any subsidiary of the Company) becoming or being deemed by law or a court of competent jurisdiction to be insolvent, or stops or suspends or defaults on, or threatens to stop or suspend or default on, payment of its debts of a material amount as they fall due;

11. Cessation of Business: the Company ceases or threatens to cease for any reason to carry on business in its usual and ordinary course; 

12. Breach of the Implementation Agreement: the Company being in material breach of any of the provisions of the Implementation Agreement; or

13. Analogous Event: any event occurs which, under the laws of any jurisdiction, has an analogous or equivalent effect to any of the foregoing event(s).

For the purpose of paragraphs 10 and 12 of this Part II of Schedule 3, a matter is "material" if it has the effect of causing the net asset value of the Group ("Group NAV") to decrease by more than five per cent. (5%) (excluding the impact arising from the dividend of 0.82 cent per Share announced by the Company in its full year financial statement released on the SGX-NET on 24 August 2012 and to be paid by the Company on 14 November 2012, foreign currency fluctuations and costs of fees and expenses incurred by the Group in connection with the Implementation Agreement and the Scheme) from the Group NAV as at 30 June 2012.



1 	Based on an exchange rate of ZAR8.62 : USD1  
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