General Announcement
Reference No LI-040823-64354

Company Name
:
LION INDUSTRIES CORPORATION BERHAD  
Stock Name
:
LIONIND  
Date Announced
:
23/08/2004  


Type:Announcement
Subject:Proposed disposal of Klang Parade for a cash consideration of RM107.651 million

Contents :

1. INTRODUCTION
2. DETAILS OF THE PROPOSED DISPOSAL 3. INFORMATION ON KLANG PARADE 4. INFORMATION ON THE PURCHASER
5. BASIS OF ARRIVING AT THE DISPOSAL CONSIDERATION The Purchaser is entitled to conduct a due diligence on Klang Parade after payment of the earnest deposit. The Purchaser will be entitled to a period of 45 calendar days to complete the due diligence ("Due Diligence Period"). In the event the findings of the due diligence to be carried out by the Purchaser via independent professionals, reveals that the NLA and the costs of repairs and replacements for structural and/or Mechanical and Electrical Systems ("M&E") defects exceed the allowable threshold, the Disposal Consideration will be re-adjusted. The materiality threshold for due diligence is set out in Table 2. 6. SALIENT TERMS AND CONDITIONS OF THE LO (a) there are no significant or material adverse changes in the business, assets, liabilities or operations in relation to Klang Parade; (b) no variation, alteration or change (including but not limited to any concessions or discounts given) has been made or will be made to the terms of the existing tenancies and Lion Klang will not terminate any of the existing tenancies, without the consent of the Purchaser, which consent shall not be unreasonably withheld or delayed;

(c) no new tenancies have been or will be entered into, without the consent of the Purchaser, which consent shall not be unreasonably withheld or delayed provided that the Purchaser’s consent is not required in respect of any new tenancies or renewal of tenancies where:

(i) the rental rates or renewal rental rates for such tenancies have been specifically disclosed in the tenancy schedule provided to the Purchaser at the time of the LO; and (d) Lion Klang has not entered and will not enter into, in relation to the operation of the business of Klang Parade, any unusual, long term or onerous commitments or contracts with any existing/new tenants or suppliers which would lead to an adverse effect on the financial position or prospects or turnover and no event, fact or matter has occurred or is likely to occur which will or is likely to give rise to any such change; and 7. RATIONALE FOR THE PROPOSED DISPOSAL


8. EFFECTS OF THE PROPOSED DISPOSAL
9. CONDITIONS OF THE PROPOSED DISPOSAL
i) Foreign Investment Committee for the acquisition of Klang Parade by the Purchaser; ii) the state authority for the acquisition of Klang Parade by the Purchaser;

iii) state authority’s consent for the transfer of Klang Parade, if required;

iv) consent from existing lenders; v) shareholders of the Purchaser, if required;

10. DIRECTORS’ INTERESTS 11. DIRECTORS’ RECOMMENDATION 12. APPLICATION TO THE RELEVANT AUTHORITIES 13. COMPLIANCE WITH SECURITIES COMMISSION ("SC") GUIDELINES

14. DOCUMENTS FOR INSPECTION
%
RM
Timing
Earnest deposit
2
2,153,020
Within 2 business days from the date of acceptance of the LO
Balance deposit
8
8,612,080
Upon signing of SPA
Total deposit
10
10,765,100
Balance disposal consideration
90
96,885,900
25 calendar days after the unconditional date (being 3 business days after the fulfillment of the last of the conditions precedent in the SPA)
Total
100
107,651,000
Factors
Materiality Threshold
Total
Threshold
Formula for the re-adjustment of Disposal Consideration
NLA
2%
696,045
square feet
13,921
square feet
RM155 per square feet for any variance exceeding threshold allowed
No major structural and M&E defects
1% of disposal consideration
RM107,651,000
RM1,076,510
Lion Klang to undertake all repairs and replacements expenses or reduce the Disposal Consideration by such amount equivalent to the estimated cost which exceeds the threshold allowed


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