| General Announcement Reference No CI-070731-56FB7 |
| Company Name | : | EVERGREEN FIBREBOARD BERHAD |
| Stock Name | : | EVERGRN |
| Date Announced | : | 31/07/2007 |
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| Type | : | Announcement |
| Subject | : | EVERGREEN FIBREBOARD BERHAD SALE AND PURCHASE ASSETS AGREEMENT BETWEEN P.T. HIJAU LESTARI RAYA FIBREBOARD, P.T. HUTRINDO JAYA FIBREBOARD MFG. CO. AND P.T. UFORIN PRAJEN ADHESIVE INDUSTRY |
Contents :
We refer to the earlier announcements dated 16 March 2007 and 20 April 2007 in relation to Memorandum of Understanding and Joint Venture Agreement entered by Evergreen Fibreboard Berhad (hereinafter shall be referred as "EFB") with P.T. Hutrindo Jaya Fibreboard Mfg. Co. (hereinafter shall be referred as "HUTRINDO") and P.T. Uforin Prajen Adhesive Industry (hereinafter shall be referred as "UFORIN").
Further to the above announcements, the Board of Directors of EFB wishes to announce that the subsidiary company namely, P.T. Hijau Lestari Raya Fibreboard (hereinafter shall be referred as "the Purchaser" or "the Company") on 31 July 2007, had entered into a Sale and Purchase of Assets Agreement (hereinafter shall be referred as "SPAA") with HUTRINDO and UFORIN (HUTRINDO and UFORIN hereinafter collectively shall be referred as "the Seller") for the purpose to acquire the Sellers' Assets. The purchase price for the Assets is United States Dollars Twenty One Million (USD 21,000,000) (hereinafter shall be referred as "Purchase Consideration") was arrived at on a willing buyer and willing seller basis and shall be satisfied by bank borrowings.
Rationale
The transaction will allow EFB to broaden its market share with its extra capacity available and provide EFB with immediate access into other markets/ countries.
The production plant of the Company with a designed capacity of 110,000 cubic metres of MDF will increase the production capacity of MDF in EFB Group by approximately 16% to 810,000 cubic metres.
It is therefore expected to contribute positively to the earnings and growth of the EFB Group.
Effect of Transactions
There are no material effect on share capital and substantial shareholders' shareholding, net assets and gearing of EFB Group for the year ending 31 December 2007.
However, the transaction is therefore expected to contribute positively to the earnings of the EFB Group for the financial year ending 31 December 2007.
Directors' and Substantial Shareholders' Interest
None of the Directors and Substantial Shareholders' and persons connected with the directors or substantial shareholders of EFB's Group has any interest, direct or indirect, in the acquisition.
The Board of Directors of EFB Group, is of the opinion that the transaction is in the best interest of the Company.
Approvals Required
The transaction is not subject to the approval of shareholders of EFB and any local government authorities.