Hidong Est. Regulatory News (HID)

14 Oct 2005 17:21

Hidong Estate PLC14 October 2005 Hidong Estate PLC Proposed disposal of plantation 14 October 2005 The Proposed Disposal The Board of Directors of Hidong Estate PLC ("Hidong" or "the Company")announces that on 14 October 2005 the Company has entered into an agreement withPalamsel Holdings Sdn Bhd ("Palamsel" or "the Purchaser") to sell the Company'sland of approximately 605.6 hectares. This comprises approximately 396.3hectares of Oil Palms, 201 hectares of Rubber Trees, 1 hectare utilized as anursery for Oil Palm, 4.9 hectares for Buildings and Roads and 2.4 hectares ofswamp land ("the Plantation") and held collectively under Grant No. 25272, LotNo. 1804 in the Mukim of Manek Urai, Daerah (Jajahan) Kuala Krai in the State ofKelantan and Geran Mukim No. 187 Lot No. 7, in the Mukim of Manek Urai, Daerah(Jajahan) Kuala Krai, in the State of Kelantan together with Plant and Buildings(hereinafter referred to as "the Property"). The consideration is payable incash and amounts to a total of Ringgit Malaysia (RM) 9,750,000.00 ("the SalePrice"). During the year ended 31 March 2005 the pre tax profit (excludingcontinuing overheads) attributable to the Plantation was RM370,976. As the Plantation comprises substantially the whole of Hidong's net assets, theproposed sale is subject to the approval of Hidong shareholders in generalmeeting. A circular containing notice of an EGM will be sent to Hidongshareholders in due course. Principal terms of the Proposed Disposal The disposal of the Property shall be on the basis of its existing state andcondition and excludes the movable properties, stocks and assets in thePlantation. The Sale Price, which was arrived at on a willing buyer willingseller basis, is to be paid by the Purchaser in the following manner: (i) 10% deposit amounting to RM975,000.00 only immediately upon execution of the Sale and Purchase Agreement (ii) balance of RM8,775,000.00 only within ninety days from the date of the Sale and Purchase Agreement or ten days from the receipt of the relevant consents of the shareholders, the Estate Land Board and any other relevant authorities required, whichever is the later, with an extension of thirty days during which the Purchaser shall pay the Company interest at the rate of ten per cent per annum on the balance purchase price due calculated on a day to day basis The Purchaser shall undertake to offer and continue the employment of the entirework force of the Plantation upon completion of the sale under the terms andconditions of employment not less favourable than those under which theemployees were employed prior to the completion of sale of the Plantation to thePurchaser. Conditions on the Proposed Disposal The Proposed Disposal is subject to the approval of Hidong shareholders ingeneral meeting and the consent of relevant local authorities. Directors' and major shareholders' interests None of the Directors or major shareholders of Hidong has any interest, director indirect, in the Proposed Disposal. Effect of the disposal on Hidong The effect of the Proposed Disposal and the settling up of other estate assetsand liabilities will be to leave Hidong with no assets other than cash ofapproximately RM10,560,000 (which also includes its present cash balance ofapproximately RM1,000,000) by the time the purchase consideration has been paidin full. The Plantation had a book value of RM7,574,557 as at 31 March 2005 (being thedate of the most recent audited accounts) and the disposal will result in a gainof RM2,175,443 before legal and professional costs relating to the sale. Application of the sale proceeds The sale proceeds will be held in cash and/or liquid securities pending theboard's approval of suitable investments. Statement by the Board of Directors After due consideration of the Proposed Disposal, the Board of Directors ofHidong is of the opinion that the Proposed Disposal is in the interest of theCompany. This information is provided by RNS The company news service from the London Stock Exchange