We refer to the announcement made on 19 March 2010 in respect of Omega Semiconductor Sdn Bhd (“Omega”), a wholly-owned subsidiary of D & O Green Technologies Berhad (formerly known as D & O Ventures Berhad) (“D&O”), entering into a Memorandum of Understanding (“MOU”) with Securitag Assembly Group Co., Ltd, a company with limited liabilities incorporated in Taiwan and having its registered address at No. 1, Gongye 9th Road, Dali City Taichung 412, Taiwan ROC. (“SAG”) for the sale of Omega’s Radio Frequency Identification (“RFID”) business and the subscription by D&O of up to 15% of the equity shareholding of the issued and paid-up capital of SAG.
The MOU has lapsed on 18 April 2010. Since the aforesaid announcement, D&O had on 30 April 2010, transferred Omega’s RFID business to Omega Semiconductor Technology Sdn Bhd (“OST”), a wholly-owned subsidiary of D&O.
The Board of Directors of D&O (“Board”) wishes to announce that D&O had on 24 May 2010 entered into a sale and purchase agreement (“S&P”) with SAG, for the disposal of the entire 100% equity interest in OST to SAG, for a total cash consideration of USD1.7million (“the Disposal”) and on the same date, the said S&P transaction was completed and SAG paid D & O USD0.8million.
D & O intends to acquire up to 15% equity shareholding in SAG on terms and conditions to be mutually agreed between the parties at the later date.
2 DETAILS OF THE DISPOSAL
2.1 Information on OST
OST was incorporated in Malaysia on 26 August 2002 under the Companies Act, 1965. As at 21 May 2010, the authorised share capital of OST is RM10,000,000 comprising 10,000,000 ordinary shares of RM1.00 each (“Shares”), of which RM5,384,000 comprising 5,384,000 Shares have been issued and credited as fully paid-up.
2.2 Basis of Arriving at the Disposal Consideration
The cash consideration of USD1.7million (or approximately RM5,440,000 million based on the exchange rates of USD1 = RM3.20) was arrived at based on a willing buyer-willing seller basis.
2.3 Information on Purchaser
SAG is leading global turnkey technology solution provider for a comprehensive range of RFID transponders.
2.4 Salient Terms of the S&P
The salient terms of the S&P are as follows :
(a) The S&P shall be completed on 24 May 2010 (“Completion Date”).
(b) The Purchaser shall pay the Vendor USD0.8million on Completion Date and the balance of USD0.9million will be paid by the Purchaser to Vendor on the second anniversary date of the S&P.
(c) The Purchaser shall within ten days after the Completion Date, submit an application to the Companies Commission of Malaysia to change its name and thereafter shall have no right to use the name “Omega” or such logo and trademark related thereto.
3 RATIONALE FOR THE DISPOSAL
The Board believes that the Disposal is in the best interest of the Company as it is in line with the overall strategy of D&O to re-focus its resources on expanding its business globally in Light Emitted Diode.
4 FINANCIAL EFFECTS OF THE DISPOSAL
4.1 Share Capital and Substantial Shareholders’ Shareholding
The Disposal will not have any effect on the share capital and substantial shareholders’ shareholding of D&O.
4.2 Earnings, Net Assets and Gearing
The Disposal is not expected to have any material effect on the consolidated earnings, net assets and gearing of D&O for the financial year ending 31 December 2010.
5 APPROVALS REQUIRED
The Disposal is not subject to the approval of the shareholders of the Company or any regulatory authorities.
6 PERCENTAGE RATIOS
The highest percentage ratio applicable to the Disposal as per paragraph 10.02(g) of the Main Market Listing Requirements of Bursa Malaysia Securities Berhad is less than 5% based on the latest audited consolidated financial statements of D&O for the financial year ended 31 December 2009.
7 DIRECTORS’ AND MAJOR SHAREHOLDERS’ INTERESTS
None of the Directors and/or major shareholders of D&O and/or persons connected with them have any interest, direct or indirect, in the Disposal.
8 STATEMENT BY DIRECTORS
The Board of Directors of D&O is of the opinion that the Disposal is in the best interest of D&O.
9 COMPLIANCE WITH EQUITY GUIDELINES OF THE SECURITIES COMMISSION (“SC”)
The Board confirms that the Disposal does not depart from the Equity Guidelines of the SC.
This announcement is dated 25 May 2010