ZELAN BERHAD (“ZB” or the “Company”)

DISPOSAL OF 7,987,000 ORDINARY SHARES OF RM1.00 EACH IN IJM CORPORATION BERHAD

1.0 INTRODUCTION

The Shareholders of the Company, at the Extraordinary General Meeting held on 30 September 2013, has approved the proposed disposal of 56,671,000 ordinary shares in IJM Corporation Berhad ("IJM"). Pursuant to Paragraph 10.06 (1) of the Main Market Listing Requirements of Bursa Malaysia Securities Berhad ("MMLR"), ZB wishes to announce that it had, on 22 October 2013 disposed of 7,987,000 ordinary shares of RM1.00 each in IJM, whereby the disposal of 7,900,000 ordinary shares were made via a Direct Business Transaction, while 87,000 ordinary shares via an open market (the “Sale Shares”) at an average disposal price of RM5.79 per share for a total consideration of RM46,173,056.19 (the “Disposal”).

2.0 DETAILS OF THE DISPOSAL
 
2.1 Information on IJM

IJM, a public listed company listed on the Main Board of Bursa Malaysia is principally involved in the construction, property development, manufacturing and quarrying, infrastructure concessions and plantations.  IJM has an authorised capital of RM3,000,000,000.00 and a paid-up capital of RM1,408,058,377.00.

2.2 Information on the Sale Shares

The Sale Shares comprise of 7,987,000 ordinary shares of RM1.00 each representing approximately 0.5672% of the total issued and paid-up capital of IJM.

2.3 The cash consideration of RM46,173,056.19 for the Sale Shares was derived on “willing buyer-willing seller” basis.

2.4 There are no liabilities to be assumed by the purchaser arising from the Disposal.

3.0 RATIONALE OF THE DISPOSAL

The rationale of the disposal is to realise funds from the sales proceeds to pay bank borrowings and the derivative financial liability incidental to the repayment of the bank borrowings.

4.0 ORIGINAL COST OF INVESTMENT AND UTILISATION OF PROCEEDS

The original cost of investment of the Sale Shares was approximately RM4.14 per share at Group level and RM3.50 per share at Company level.  As at 30 September 2013, the book value of the Sale Shares was approximately RM5.78 per share at Group level.

The sale proceeds will be utilised to pay bank borrowings and the derivative financial liability incidental to the repayment of the bank borrowings.

5.0 COMPLETION DATE

The Disposal was completed on 22 October 2013.

6.0 FINANCIAL EFFECTS

The Disposal will not have any material financial implication and effect to the net assets per share and has no effect on the share capital and substantial shareholders’ shareholding of the Company. The proceeds will be primarily used to pay bank borrowings and thus would improve the Company’s gearing position. The gain on the Disposal at Group level was approximately RM13.1 million while at the Company level was approximately RM18.2 million and this would contribute positively to the Company's earnings per share.

7.0 APPROVALS REQUIRED

The approval to dispose the Sale Shares was obtained as part of the shareholders' mandate for the disposal up to 56,671,000 ordinary shares of RM1.00 each in IJM, which was approved on 30 September 2013.

8.0 DIRECTORS’ AND SUBSTANTIAL SHAREHOLDERS’ INTERESTS

None of the Directors and/or Substantial Shareholders of the Company or persons connected to them has any interest, direct or indirect, in the Disposal.

9.0 PERCENTAGE RATIO
 
The highest percentage ratio applicable to the transaction pursuant to paragraph 10.02 (g) of the MMLR is 32.4%. On aggregate, the highest percentage ratio applicable to the transaction pursuant to paragraph 10.02 (g) of the MMLR is 141.6%.

10.0 STATEMENT BY BOARD OF DIRECTOR

The Board of Directors of ZB, after due consideration of all aspects of the Disposal, are of the opinion that the Disposal is in the best interest of ZB. 

This announcement is dated 23 October 2013.