RNS Number:4615O
Tanjong PLC
21 February 2008
TANJONG PUBLIC LIMITED COMPANY ("TANJONG" OR THE "COMPANY")
PROPOSED DISPOSAL BY INVEST ALLIED LIMITED OF ITS ENTIRE INTEREST IN MACQUARIE
UK BROADCAST HOLDINGS LIMITED AND MACQUARIE UK BROADCAST SERVICES PLC ("PROPOSED
DIVESTMENT")
1. INTRODUCTION
For purposes of this announcement, unless stated otherwise, an exchange rate of
Ringgit Malaysia ("RM") 6.2704: Great Britain Pound ("£") 1.00 as at 20 February
2008 has been applied throughout, unless otherwise stated.
On behalf of Tanjong, CIMB Investment Bank Berhad wishes to announce that Invest
Allied Limited ("IAL"), a wholly-owned subsidiary of Tanjong, has, on 21
February 2008, entered into a Purchase Agreement ("PA") to dispose its entire
interest in Macquarie UK Broadcast Holdings Limited ("MUL") and Macquarie UK
Broadcast Services Plc ("MUS"), a subsidiary of MUL, comprising 12,500,000
ordinary shares of £1 each in MUL ("MUL Shares") and 12,500,000 of the principal
amount of fixed rate unsecured loan notes issued by MUS ("Loan Notes") to the
following buyers (who are existing consortium members, offered on a pro-rata
basis based on their existing shareholding) for a total sale consideration of
£36,983,943.19 (or approximately RM231,904,117) ("Sale Consideration"): -
(a) Challenger Towers Limited;
(b) Macquarie International Infrastructure Fund Limited;
(c) MTAA Superannuation Fund (ntl:Broadcast) Utilities Pty Ltd;
(d) Macquarie Global Infrastructure Funds 2.S.A.;
(e) Macquarie Prism Proprietary Limited; and
(f) Macquarie International Communications Assets Limited.
Please refer to Table 1 of this announcement for the proportion of interest to
be acquired and amount of cash consideration payable by each of the buyers.
The Sale Consideration shall be satisfied in cash at completion.
2. DETAILS OF THE PROPOSED DIVESTMENT
2.1 Sale Consideration
The Sale Consideration was based on the fair market value of the investment as
determined by an independent share valuation carried out by the external
auditors of MUL.
2.2 Salient terms of the PA
The salient terms of the PA are as follows:
(i) Completion
It is expected that completion of the Proposed Divestment shall occur not later
than thirty (30) days from the date of the PA ("Completion Date").
(ii) Encumbrances and Associated Rights
The MUL Shares and Loan Notes will be disposed of free from encumbrances and
other third party rights.
The MUL Shares and Loan Notes will be disposed of together with all rights
attached to them as at the date of the PA and which accrue between the date of
the PA and Completion Date.
2.3 Assumption of liability
The buyers will not assume any liability arising from the Proposed Divestment.
3. INFORMATION ON INVEST, MUL AND MUS
3.1 IAL
IAL is a private company incorporated in Hong Kong under the Hong Kong Companies
Ordinance (Chapter 32) on 8 November 2004. Its principal activity is investment
holding.
As at 20 February 2008, the authorised share capital of IAL is 10,000 Hong Kong
Dollars ("HKD") comprising 10,000 ordinary shares of HKD1.00 each, of which 1
ordinary share of HKD1.00 has been issued and fully paid-up.
The Directors of IAL as at the date of this announcement are Selvam N @ Gerard A
/L T N Nathan and Lee Siew Lan.
3.2 MUL
MUL is a private limited company limited by shares incorporated in England and
Wales under the Companies Act 1985 on 8 October 2004. Its principal activity is
as a holding company.
As at 25 January 2008, MUL has an authorised share capital of £1,016,500,000
comprising 1,016,500,000 ordinary shares of £1.00 each, of which 653,927,988
ordinary shares of £1.00 each amounting to £653,927,988 have been issued and
fully paid-up.
3.3 MUS
MUS, a wholly-owned subsidiary of MUL, is a public company limited by shares
incorporated in England and Wales under the Companies Act 1985 on 8 October 2004.
Its principal activity is as a holding company.
As at 25 January 2008, MUS has an authorised share capital of £1,000,000
comprising 1,000,000 ordinary shares of £1.00 each, of which 1,000,000 ordinary
shares of £1.00 each amounting to £1,000,000 have been issued and fully paid-up.
4. INFORMATION ON THE MUL SHARES AND THE LOAN NOTES
On 1 December 2004, IAL participated and invested in a consortium led by
Macquarie Communications Infrastructure Group together with third party
investors for the acquisition of National Transcommunications Limited and NTL
Digital Limited which was undertaken by MUL and its wholly-owned subsidiary
Macquarie UK Broadcast Limited for a total investment sum of £25 million (£12.5
million in the MUL Shares and £12.5 million in the Loan Notes). The interest on
the Loan Notes is 13% per annum ("p.a.") payable semi-annually. These two (2)
securities are stapled. The net book value of the MUL Shares is £20,018,000 (or
approximately RM128,821,835.40) whilst the net book value of the loan note is
£14,073,000 (or approximately RM90,563,976.90 based on an exchange rate of
RM6.4353 : £1.00 as 31 January 2008).
5. RATIONALE FOR THE PROPOSED DIVESTMENT
The Tanjong Group undertook the investment in December 2004 as part of its
ongoing efforts towards optimising returns on its surplus cash and capital, and
consequently, enhancing shareholder value. The investment has since performed in
line with the Group's investment objectives and after considering MUL's future
prospects, the Group believes that it would be an appropriate juncture to
liquidate the investment. It is intended that the surplus cash and additional
borrowing capacity arising thereon will, going forward, fund the Group's growth
plans for its core businesses.
Details of the utilisation of proceeds from the Proposed Divestment are set out
in Table 2.
6. EFFECTS OF THE PROPOSED DIVESTMENT
6.1 Issued and paid-up share capital and substantial shareholders
The Proposed Divestment will not have any effect on the share capital of Tanjong
or the shareholdings of the substantial shareholders of Tanjong as the Proposed
Divestment does not involve any issue of new shares by Tanjong.
6.2 Net assets ("NA"), NA per share and gearing
The proforma effect of the Proposed Divestment on the consolidated NA of
Tanjong, consolidated NA per ordinary share of 7.5 pence each in Tanjong ("
Tanjong Share" or collectively "Tanjong Shares") and the gearing based on the
audited consolidated balance sheets of Tanjong as at 31 January 2007 is set out
in Table 3 of this announcement.
6.3 Earnings
The Proposed Divestment is expected to realise an estimated net gain after tax
of approximately RM58.7 million. The gain will increase the earnings per share
of Tanjong by approximately 14.6 sen based on 403,256,136 Tanjong Shares as at
31 January 2007.
7. APPROVALS REQUIRED
The Proposed Divestment is not subject to the receipt of any regulatory or
shareholders' approvals.
The Proposed Divestment is not conditional upon any other corporate proposals of
Tanjong.
8. INTERESTS OF DIRECTORS AND MAJOR SHAREHOLDERS OF TANJONG AND PERSONS
CONNECTED TO THEM
None of the Directors has any interest, direct or indirect, in the Proposed
Divestment. To the best knowledge of the Directors, none of the major
shareholders or persons connected to the Directors or major shareholders has any
interest, direct or indirect, in the Proposed Divestment.
9. STATEMENT BY THE DIRECTORS
The Board, after careful deliberations on all aspects of the Proposed
Divestment, is of the opinion that the Proposed Divestment is in the best
interest of the Company.
10. ESTIMATED TIMEFRAME TO COMPLETION
Barring any unforeseen circumstances, the Board estimates that the Proposed
Divestment will be completed no later than thirty (30) days from the date of the
PA.
11. DEPARTURE FROM THE GUIDELINES ON THE OFFERING OF EQUITY AND
EQUITY-LINKED SECURITIES ("SC GUIDELINES")
The Board, to the best of its knowledge and belief, is of the opinion that the
Proposed Divestment does not result in any departure from the SC Guidelines.
12. DOCUMENT FOR INSPECTION
The PA is available for inspection during normal office hours in Tanjong's
Principal Office located at Level 30, Menara Maxis, Kuala Lumpur City Centre,
50088 Kuala Lumpur, Malaysia, from Mondays to Fridays except public holidays for
a period of three (3) months from the date of this announcement.
Table 1 - Details of the proportion of MUL Shares and the Loan Notes to be
acquired together with the proportion of cash consideration payable
The details of each of the buyers are given as follows:
Buyer Date and country Principal activity Authorised share Issued and paid-up
of incorporation capital share capital
Challenger Towers 19 April 2005; Investment vehicle for There is no limit 43,563,529 ordinary
Limited Challenger Infrastructure shares
Jersey Fund's interest in MUL
Macquarie International 7 January 2005; MIIF is a mutual fund S$680,000,000 S$1,173,443,223
Infrastructure Fund company that has been formed
Limited ("MIIF") Bermuda to own, operate and invest
in a diversified group of
infrastructure businesses
around the world
MTAA Superannuation Fund 22 November Trustee of the MTAA Not applicable AUD10
(ntl:Broadcast) 2004; Superannuation Fund (NTL
Utilities Pty Ltd Broadcast) Utilities Trust
Australia
Macquarie Global 28 December Holding company €31,700 €31,700
Infrastructure Funds 2004;
2.S.A.
Luxembourg
Macquarie Prism 1 July 2000; Securities dealing and AUD1 AUD1
Proprietary Limited custody
Australia
Macquarie International 25 November Holding company AUD15,460,035.34 AUD9,232,008
Communications Assets 2004;
Limited
Hamilton,
Bermuda
The proportion of MUL Shares and the Loan Notes to be acquired together with the
proportion of cash consideration payable are shown as follows:
Buyer Number of MUL Number of Loan Cash consideration
Shares to be Notes to be (£)
acquired acquired
Macquarie International Communications
Assets Limited
8,727,495 8,727,495 25,822,174.34
Macquarie Global Infrastructure Funds
2.S.A.
181,188 181,188 536,083.74
Challenger Towers Limited 1,128,373 1,128,373 3,338,534.63
Macquarie Prism Proprietary Limited 95,181 95,181 281,613.50
MTAA Superannuation Fund (ntl:Broadcast)
Utilities Pty Ltd
603,962 603,962 1,786,951.70
Macquarie International Infrastructure
Fund Limited
1,763,801 1,763,801 5,218,585.28
Total 12,500,000 12,500,000 36,983,943.19
An obligation of a buyer under the PA is several on the basis of that buyer's
proportion and is not joint or joint and several.
Table 2 - Utilisation of proceeds from the Proposed Divestment
The proceeds from the Proposed Divestment are proposed to be utilised as
follows:
£ million
Gross proceeds from disposal 37.0
Less: Repayment of term loan (22.5)
Interest payable on the term loan (0.2)
Estimated expenses (advisory fee and legal costs) (2.0)
Surplus funds for working capital purposes 12.3
Table 3 - Proforma effects of the Proposed Divestment on the NA and gearing of
the Tanjong Group
The proforma effects of the Proposed Divestment on the NA and gearing of the
Tanjong Group are as follows:
Audited After the Proposed
as at 31 Divestment
January 2007
RM 000 RM 000
Paid up share capital 146,107 146,107
Share premium account 240,808 240,808
Fair value reserve 117,076 58,573
Hedging reserve 25,367 25,367
Legal reserve 3,548 3,548
Translation reserve (48,057) (48,057)
Retained earnings 2,713,359 (1) 2,772,057
Total shareholders' equity 3,198,208 3,198,403
Number of Tanjong Shares in issue (000) 403,256 403,256
Consolidated NA per Tanjong Share (RM) 7.93 7.93
Total borrowings 4,135,189 3,994,105
Gearing (times) 1.29 1.25
Note:
(1) After deducting estimated expenses in respect of Proposed
Divestment amounting to £2.0 million (approximately RM12.3 million).
This announcement is dated 21 February 2008.
This information is provided by RNS
The company news service from the London Stock Exchange
END
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