TROPICANA CORPORATION BERHAD (TROPICANA OR COMPANY)

DISPOSAL OF APPROXIMATELY 9,968 SQUARE METERS OF FREEHOLD LAND LOCATED IN

THE VICINITY OF BANDAR SUBANG JAYA, NEGERI SELANGOR DARUL EHSAN BY
TROPICANA SUBANG SOUTH DEVELOPMENT SDN BHD (FORMERLY KNOWN AS TARAF
PERMATA SDN BHD) FOR A CASH CONSIDERATION OF RM37,553,128

1.

INTRODUCTION
The Board of Directors of Tropicana wishes to announce that Tropicana Subang South
Development Sdn Bhd (formerly known as Taraf Permata Sdn Bhd) (TSSD or Vendor), a
wholly-owned subsidiary of Tropicana, had on 2 October 2014, entered into a sale and
purchase agreement (SPA) with Mediaraya Sdn Bhd (MSB or Purchaser) for the disposal
of a piece of freehold land held under Geran 295496, Lot 4887, Bandar Subang Jaya, Daerah
Petaling, Negeri Selangor Darul Ehsan, measuring approximately 9,968 square meters
(equivalent to 107,294.65 square feet) (Land) for a total cash consideration of
RM37,553,128.00 calculated at RM350.00 per square foot (Sales Consideration) (Disposal).

2.

INFORMATION OF THE DISPOSAL

2.1

Information on the Vendor

TSSD is a private limited company incorporated on 8 January 2009 in Malaysia under the
Companies Act, 1965 (Act). The present authorised share capital of TSSD is RM100,000.00
comprising 100,000 ordinary shares of RM1.00 each which 100,000 ordinary shares of RM1.00
each have been issued and fully paid-up. TSSD is principally involved in property investment.

2.2

Information on the Purchaser

MSB is a private limited company incorporated on 6 November 2001 in Malaysia under the
Companies Act, 1965 (Act). The present authorised share capital of MSB is RM5,000,000.00
comprising 5,000,000 ordinary shares of RM1.00 each which 4,000,000 ordinary shares of
RM1.00 each have been issued and fully paid-up. MSB is principally involved in property
development.

2.3

Information on the Land

TSSD is the registered proprietor of the Land. Further information on the Land are as follows:
Postal address and
identification

A piece of freehold land held under Geran 295496, Lot 4887,

Bandar Subang Jaya, Daerah Petaling Jaya, Negeri Selangor
Darul Ehsan.

Land area

Approximately 9,968 square meters (107,294.65 square

feet)

Restriction-in-interest

None

Category of land use

Bangunan

Express Conditions

Bangunan Perniagaan

Existing use

Nil

Tenure

Freehold

Net book value as at 31

December 2013

RM18,607,022

Encumbrances

A legal charge in favour of Pacific Trustees Berhad

Original cost of
investment/ Date of
investment

RM16,093,500 / 6 May 2009

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2.4

Basis of the Sales Consideration

The Sales Consideration was arrived at based on negotiations between the parties on a willingbuyer willing-seller basis after taking into consideration, among others, the following:
(i)
(ii)

2.5

The original cost of investment of the Land; and

The prevailing market value of land at the surrounding area.

Salient Terms of the Disposal

The salient terms of the SPA include, amongst others, the following:

2.5.1

Payment terms of the Sales Consideration

The Sales Consideration shall be payable in the following manner:
(i)

The Purchaser shall pay the deposit sum of RM3,755,312.80 or 10% of the Sales
Consideration (Deposit Sum) as follows:
(a) a retention sum of RM751,062.56 to the Vendors solicitor for purposes of real
property gains tax; and
(b) the remaining deposit in the sum of RM3,004,250.24 to the Vendor;

(ii)

2.6

2.7

The Balance Purchase Price amounting to RM33,797,815.20 shall be paid by the

Purchaser to the Vendor within 3 months from the date of the SPA (Completion
Period). In the event the Purchaser shall be unable to pay the Balance Purchase Price
on or before the expiry of the Completion Period, the Vendor shall grant to the
Purchaser an extension of 2 months subject to interest at 8% per annum calculated on
daily rest from the expiry of the Completion Period until the date of full payment of the
Balance Purchase Price.

Expected net gain and utilisation of proceeds

(i)

The expected gain from the Disposal is approximately RM3.7 million (net of tax
payable); and

(ii)

The net proceeds arising from the Disposal are expected to be utilised for the working
capital and/or repayment of bank borrowings of Tropicana and its group of companies
(Tropicana Group).

Liabilities to be assumed by Purchaser

There is no liability to be assumed, including any contingent liability and guarantee, by the
Purchaser pursuant to the Disposal.

3.

RATIONALE
The rationale for the Disposal are:
(i)
to realise gain via sale of land; and
(ii)
to raise funds as working capital and/or repayment of bank borrowings of Tropicana
Group.
The Disposal is also in line with Tropicana Groups de-gearing exercise to strengthen its
financial footing.

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4.

EFFECTS OF THE DISPOSAL

4.1

Share capital and substantial shareholders shareholding

The Disposal will not have any effect on the issued and paid-up share capital of Tropicana and
the substantial shareholders shareholding in Tropicana, as the Disposal does not involve any
issuance of shares in Tropicana.

4.2

Earnings, earnings per share, net assets per share and gearing
The Disposal is expected to be completed in the 4th quarter of 2014 and has no significant effect
on earnings per share and net assets per share of Tropicana for the financial year ending 31
December 2014.

5.

APPROVALS REQUIRED
There are no approvals required for the Disposal.

6.

INTERESTS OF
CONNECTED

DIRECTORS,

MAJOR

SHAREHOLDERS

AND/OR

PERSONS

None of the Directors and/or major shareholders of Tropicana and its subsidiaries and/or
persons connected to them have any interest, direct or indirect in the Disposal.

7.

DIRECTORS RECOMMENDATION
The Board of Directors, having considered all aspects of the Disposal, is of the opinion that the
Disposal is in the best interest of Tropicana.

8.

HIGHEST PRECENTAGE RATIO

The highest percentage ratio applicable to the Disposal pursuant to Paragraph 10.02(g) of the
Bursa Malaysia Securities Berhads Main Market Listing Requirements is approximately 1.5%
based on the latest audited financial statements of Tropicana as at 31 December 2013.

9.

ESTIMATED TIMEFRAME FOR COMPLETION

Barring any unforeseen circumstances, the Disposal is expected to be completed in the 4th
quarter of 2014.

10.

DOCUMENTS FOR INSPECTION

The SPA is available for inspection by the shareholders of Tropicana at the registered office of
Tropicana at Lot LG-A1, Lower Ground Floor, Tropicana City Mall, No 3 Jalan SS20/27, 47400
Petaling Jaya, Selangor Darul Ehsan, during normal business hours from Mondays to Fridays
(except public holidays) for a period of 3 months from the date of this announcement.

This announcement is dated 2 October 2014.

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