GSB Group Berhad (“GSB” or the “Group”) today entered into three (3) conditional share sale agreements for the proposed acquisitions of the entire equity interest in Aeon Frontier Sdn. Bhd. (“AFSB”), Kerjaya Prospek Property Sdn. Bhd. (“KPP”) and Kerjaya Hotel Sdn. Bhd. (“KHSB”) and a conditional share subscription agreement for the proposed subscription of 99.4% equity interest in Desanda Property Sdn Bhd (“DPSB”), (collectively, the “Acquisitions”).
The total consideration for the Acquisitions amount to RM714 million.
AFSB, KPP, KHSB and DPSB are principally engaged in property development. AFSB, KPP and DPSB are owned by Datuk Tee Eng Ho (“Datuk Tee”) and GSB’s Executive Director Tee Eng Seng (“TES”) while KHSB is owned by GSB’s Executive Chairman, Datin Toh Siew Chuon, Datuk Tee and TES (“Vendors”). The Vendors are major shareholders of GSB, holding a 40.8% indirect equity interest via Javawana Sdn Bhd.
As part of the transaction, GSB also proposed to undertake a fund-raising exercise of up to 125 million consolidated shares at an issue price to be determined later. Further, GSB also proposed, amongst others, a share consolidation of every five (5) existing GSB shares into one (1) GSB share and proposed amendments to its Constitution to facilitate the Acquisitions.
The total consideration of RM672 million for the acquisition of AFSB, KPP and KHSB will be satisfied via:
(i) RM100 million in cash
(ii) RM33.47 million via issuance of 196.9 million new GSB ordinary shares at an issue price of RM0.17 per share
(iii) RM538.57 million via issuance of 3,168 million redeemable convertible preference shares (“RCPS”) at an issue price of RM0.17 per RCPS
The subscription consideration of DPSB will be settled via a settlement arrangement which include, inter alia, the reinvestment of 251 million new GSB shares by Datuk Tee and TES at an issue price of RM0.17 per share.
The consideration for the Acquisitions was derived based on the market value of the property assets as appraised by the independent valuers engaged by GSB and the adjusted net assets of the companies based on their respective audited financial statements for the FYE 31 March 2019.
“I want to further strengthen and expand the property development business of GSB to deliver sustainable growth and profitability. GSB will significantly scale up its property development business once the Acquisitions are completed. It will also increase the size of the landbank as well as geographical reach to Malacca and other parts of Selangor such as Gombak. The Acquisitions will give GSB immediate access to on-going property development projects with total remaining gross development value of RM1.74 billion in strategic locations in Kuala Lumpur and Penang such as Bloomsvale at Jalan Puchong/Jalan Klang Lama, Straits Residence in Seri Tanjung Pinang, Penang as well as Kaleidoscope in Setiawangsa, Kuala Lumpur. This in turn will enhance the Group’s future earnings,” Datin Toh Siew Chuon commented.
AmInvestment Bank has been appointed as the principal adviser for the proposals and sole placement agent for the proposed private placement.