Company Name

Stock Name
Date Announced

: TIONG NAM LOGISTICS HOLDINGS BERHAD

: TNLOGIS
: 20 May 2014

Type
: Announcement
Subject : ACQUISITION OF VACANT LANDS BY MEDINI HERITAGE SDN.
BHD. FROM PENINSULAR HUB SDN. BHD.
Contents:
The Board of Directors is pleased to announce that Medini Heritage Sdn Bhd (Company
No. 1052685-D) (MHSB or Purchaser) a 100% owned subsidiary of Tiong Nam
Logistics Holdings Berhad (the Company) has on 20 May 2014 entered into a Sale and
Purchase Agreement (S&P) with Peninsular Hub Sdn. Bhd. (Company No. 774229-P)
(PHSB or Vendor) to purchase 9 parcels of freehold agriculture vacant lands
measuring 45.7771 hectares or 4,927,406 square feet (the Land) held under separate
issue document of titles as follows:
(i)

HS(M) 2896, PTD 171027, Mukim of Plentong, Tempat of LKTP Cahaya Baru,
Daerah of Johor Baharu, Negeri Johor measuring 3.011 Hectares;

(ii)

HS(M) 2897, PTD 171028, Mukim of Plentong, Tempat of LKTP Cahaya Baru,
Daerah of Johor Baharu, Negeri Johor measuring 6.629 Hectares;

(iii)

HS(M) 2902, PTD 171026, Mukim of Plentong, Tempat of LKTP Cahaya Baru,
Daerah of Johor Baharu, Negeri Johor measuring 14.018 Hectares;

(iv)

HS(M) 2904, PTD 171029, Mukim of Plentong, Tempat of LKTP Cahaya Baru,
Daerah of Johor Baharu, Negeri Johor measuring 1.473 Hectares;

(v)

HS(M) 2937, PTD 175231, Mukim of Plentong, Tempat of LKTP Cahaya Baru,
Daerah of Johor Baharu, Negeri Johor measuring 8.855 Hectares;

(vi)

HS(M) 2938, PTD 175232, Mukim of Plentong, Tempat of LKTP Cahaya Baru,
Daerah of Johor Baharu, Negeri Johor measuring 2.966 Hectares;

(vii)

HS(M) 2939, PTD 175233, Mukim of Plentong, Tempat of LKTP Cahaya Baru,
Daerah of Johor Baharu, Negeri Johor measuring 2.9069 Hectares;

(viii)

HS(M) 2941, PTD 175234, Mukim of Plentong, Tempat of LKTP Cahaya Baru,
Daerah of Johor Baharu, Negeri Johor measuring 2.894 Hectares; and

(ix)

HS(M) 2942, PTD 175235, Mukim of Plentong, Tempat of LKTP Cahaya Baru,
Daerah of Johor Baharu, Negeri Johor measuring 3.0242 Hectares.

The total cash consideration amounting to RM35,477,323.00 (Ringgit Malaysia Thirty

Five Million Four Hundred Seventy Seven Thousand Three Hundred Twenty Three) (the
Purchase Consideration).
MHSB is currently a dormant company and its intended principal activity is property
development.
PHSB is a private limited company incorporated in Malaysia on 22 May 2007 under the
Companies Act 1965. The present authorized share capital of PHSB is RM100,000
comprising 100,000 ordinary shares of RM1.00 each, of which 2 shares have been issued
and fully paid-up.
The Purchase Consideration was arrived at based on a willing-buyer-willing-seller
basis after taking into consideration the development potential of the Land as well as by
reference to the current market value of the land in the surrounding area and the location
and condition of the Land.
Save for the following Two (2) parcels of the Land which are presently charged to a
financial institution, the rest of the Land is currently free from encumbrances:(i)

HS(M) 2897, PTD 171028, Mukim of Plentong, Tempat of LKTP Cahaya Baru,
Daerah of Johor Baharu, Negeri Johor measuring 6.629 Hectares;

(ii)

HS(M) 2937, PTD 175231, Mukim of Plentong, Tempat of LKTP Cahaya Baru,
Daerah of Johor Baharu, Negeri Johor measuring 8.855 Hectares;

The net book value and original cost of investment of the Land is not made known to the
Company at the date of this announcement.
As the Purchase Consideration is on cash basis, the acquisition of the Land will not have
any effect on the issued and paid-up capital, substantial shareholders shareholdings, net
tangible assets and net assets per share of the Company nor will it have any material
effect on the earnings per share of the Company for the financial year ending 31 March
2015.
None of the Directors, substantial shareholders and/or persons connected to the Directors
and substantial shareholders of the Company, have any interest, direct or indirect, in the
acquisition of the Land.
MHSB intends to develop the Land to a mixed commercial and industrial area
comprising shop-office and factories. Based on preliminary plans and subject to
authorities approval for the proposed development and layout plan, the development of
the Land is expected to generate an estimated gross development value of approximately
RM1.1 billion, which in turn contribute positively to the Groups future revenue stream
and profitability. The estimated Gross Development Cost (GDC) and profit before tax

to be derived from the development of the Land are approximately RM771 million, and
RM329million respectively.
The rationale for the acquisition of the Land is to enlarge Tiong Nam Groups existing
land banks for future property development projects.
The salient features of the S&P are as follows:
a) MHSB shall pay the Vendor 10% of the Purchase Consideration in cash amounting
to RM3,547,732.30 (Ringgit Malaysia Three Million Five Hundred Forty Seven
Thousand Seven Hundred Thirty Two And Sen Thirty).
b) The balance of final balance payment of the Purchase Consideration amounting to
RM31,929,590.70 (Ringgit Malaysia Thirty One Million Nine Hundred Twenty
Nine Thousand Five Hundred Ninety And Sen Seventy) shall be paid within six (6)
months from the date of the S&P (First Payment Date).
c) The Vendor shall grant an extended period of six (6) months from the First Payment
Date with an interest charges calculated at the rate of three per centum (3%) per
annum (Final Payment Date).
A copy of the S&P dated 20 May 2014 is available for inspection at the Companys
Registered Office at Lot 30462 Jalan Kempas Baru 81200 Johor Bahru, Johor during
normal business hours between Mondays to Fridays (except public holidays) for a three
(3) months period.
The Local Town Council has yet to assign any postal address on the Land. The Land is
Located in Iskandar Malaysia and is in close proximity to surrounding completed mixed
housing schemes such as Taman Scientex, Taman Cendana and Taman Pasir Putih. It is
connected to Johor Bahru City Centre via the Eastern Dispersal Link (EDL), and the
Causeway to Singapore via the Coastal Highway. The Land is also easily accessible via
Pasir Gudang Expressway and Tebrau Highway.
The Land is sold to MHSB free from all charges, lien and other encumbrances.
The acquisition of the Land is estimated to complete within twelve (12) months from the
date of S&P, which is before 20 May 2015.
The Group intends to fund the acquisition and the development cost of the Land through
internally generated funds and/or bank borrowings. The exact mix of internally generated
funds and bank borrowings will be decided by the management at a later stage after
taking into consideration the Groups gearing level, interest costs as well as internal cash
requirement of its business.
The gearing ratio of Tiong Nam Group is expected to increase by 12.20% (derived based
on the Purchase Consideration of RM35.48 million and the latest audited total equity

attributable to owners of the Group of RM290.8 million) following the acquisition of the
said Land. The Groups latest audited gearing ratio as at 31 March 2013 is 110%.
Tiong Nam Group did not assume any liabilities, including contingent liabilities and
guarantees arising from the acquisition.
The Board has considered the rationale and is of the view that the proposed acquisition of
the Land is in the best interest of the Group.
The location and size of the Land is ideal for the long-term strategic growth of the Group.
The existing land bank for property development will be enlarged after this lands
acquisition.
With the increasing scarcity of land in Johor Bahru, the Group is optimistic of the
prospect of the Land.
The financial and business prospect of the said Land are subject to certain risks inherent
in the property market including changes and developments in political, economic,
regulatory, social conditions and increasing competition.
The highest percentage ratio applicable to the above acquisition of the said Land is
12.2%.
The development on Land will commence within six months after the relevant approvals
are obtained from the relevant Authorities and is expected to complete within two to five
years thereafter.
MHSB has yet to submit any application to any relevant authority for the above Land
development.