| Type | Announcement |
| Subject | Recurrent Related Party Transactions between Consolidated Leasing (M) Sdn Bhd (“Conlease”), a wholly-owned subsidiary of Malaysia Aica Berhad (“Maica” or “the Company”) and Spanco Sdn Bhd (“Spanco”) |
| Contents | 1.0 INTRODUCTION The Board wishes to announce that as at 9 May 2008, Conlease, the Company’s wholly-owned subsidiary, has provided hire purchase financing (“HP Financing”) with a total aggregate value of RM3,182,500 to Spanco. 2.0 DETAILS OF SPANCO AND THE HP FINANCING Spanco was incorporated in Malaysia under the Companies Act, 1965 as a private limited company on 16 August 1988 with an issued and paid-up share capital of RM40,000,000 comprising 10,000,000 ordinary shares of RM1.00 each and 30,000,000 cumulative redeemable convertible preference shares of RM1.00 each. Spanco is principally engaged in fleet management involving the supply and lease of saloon vehicles with full maintenance to the Government. The company is also an investment holding company. Conlease has on 9 May 2008 entered into hire purchase agreements with Spanco for each of the 67 motor vehicles in accordance with the Hire Purchase Act, 1967. The HP Financing aggregating RM3,182,500 to Spanco is for financing up to 90% of the purchase price of 67 units of motor vehicles by Spanco. The interest rate charged for the HP financing is 3.9% per annum and the duration of the hire for each motor vehicle is five (5) years. Interest on overdue monthly instalment payments is fixed at 8% per annum calculated on a daily rest basis. 3.0 EFFECTS OF THE HP FINANCING 3.1 Earnings Per Share, Net Asset Per Share The HP Financing will not have any significant effect but will contribute positively to the earnings per share or net asset per share of Maica for the financial year ending 31 March 2009. 3.2 Gearing, Share Capital & Substantial Shareholders’ Shareholding There will not be any effect on the gearing, share capital and substantial shareholders’ shareholding of Maica, as the HP Financing business is funded through internally generated funds. 4.0 DIRECTORS’ AND SUBSTANTIAL SHAREHOLDERS’ INTERESTS The HP Financing is regarded as a related party transaction by virtue of the following: - Tan Sri Dato’ Tan Hua Choon, a Director and substantial shareholder of Maica, is also a Director and substantial shareholder of Spanco; and - Tan Sri Dato’ Tan is the father of Mr Tan Han Chuan and Ms Tan Ching Ching who are substantial shareholders of Spanco. Mr Tan Han Chuan is also a Director of Spanco. Save as disclosed above, none of the other Directors and/or substantial shareholders and/or persons connected to the Directors or substantial shareholders of Maica have any interest, direct or indirect, in the HP Financing. Tan Sri Dato’ Tan Hua Choon, as an interested Director, has abstained and will continue to abstain from all Board deliberations and voting at the Board meetings in relation to the HP Financing. 5.0 APPROVAL REQUIRED The HP Financing is governed by the Hire Purchase Act, 1967 and is not subject to the approval of the shareholders of the Company or any other relevant regulatory authorities. As the Board of Maica expects the HP Financing business with Spanco to be recurrent in nature, Maica will be seeking its shareholders’ mandate which will allow Conlease, in its normal course of business, to continue entering into HP Financing business with Spanco on terms not more favourable to the related party than those generally available to the public and are not to the detriment of the minority shareholders. 6.0 RATIONALE FOR THE HP FINANCING BUSINESS Conlease’s principal activities are investment holding and granting of lease and hire purchase financing. Conlease has been involved in hire purchase financing since 1977. However, after the Asian Financial crisis, Conlease slowed down its hire purchase financing activities and suspended the granting of new hire purchase financing to customers since October 1997 to concentrate on collections. The Board of Directors of Maica is of the opinion that the market conditions have now improved and wishes to re-activate this business. The re-activation of the hire purchase financing business will pave the way for the Maica Group to broaden and diversify its income base. 7.0 STATEMENT BY THE BOARD OF DIRECTORS The Board of Directors of Maica, save for Tan Sri Dato’ Tan Hua Choon, is of the opinion that the HP Financing business with Spanco is in the best interests of the Maica Group. To the best knowledge of the Directors of Maica, the HP Financing has not departed from the Securities Commission’s Guidelines on the offering of Equity and Equity-linked securities. 8.0 DOCUMENTS AVAILABLE FOR INSPECTION Copies of the following documents are available for inspection at the registered office of the Company at 8-3 Jalan Segambut, 51200 Kuala Lumpur from Mondays to Fridays (except public holidays) for two (2) months from the date of this announcement : - the Memorandum and Articles of Association of Conlease and Spanco; and - the hire purchase agreements. This announcement is dated 12 May 2008. c.c. Securities Commission |
| Company Name | MALAYSIA AICA BERHAD |
| Stock Name | MAICA |
| Date Announced | 12 May 2008 |
| Category | General Announcement |
| Reference No | CQ-080512-51222 |