Reference is made to the announcement made by the Company dated 1 December 2014 on the litigation involving the Company’s subsidiary, UNP Plywood Sdn Bhd (“UNP”) and Sabah Forest Industries Sdn Bhd (“[url=]SFI[/url]”) (“UNP Suit”).
The Board of Directors of the Company (“Board”) wishes to announce that UNP has on 6 February 2015 entered into a settlement agreement with SFI (“Settlement Agreement”) whereby the Settlement Agreement sets out UNP’s and SFI’s agreements to settle the UNP Suit and the appeal by SFI on the damages awarded by the Kota Kinabalu High Court on 11 September 2014 (“Appeal”).
In accordance with the terms and conditions of the Settlement Agreement, SFI shall pay UNP a lump sum of RM85.0 million (“Settlement Sum”) on or before 13 February 2015 as full and final settlement of the UNP Suit and the Appeal (“Settlement”).
The Board has deliberated on the Settlement and is of the opinion that it is in the best interest of DutaLand Group to agree to the Settlement. This is in view that the Settlement Sum will be paid immediately in cash as opposed to continuing with the protracted legal process that has been ongoing since 1997. The Settlement would save further costs and time hence allowing DutaLand Group to focus its resources on its businesses.
EFFECTS OF THE SETTLEMENT
1. Share Capital and Substantial Shareholders’ Shareholdings
The Settlement will not have any effect on the issued and paid-up share capital and substantial shareholders’ shareholdings of the Company.
2. Earnings
The Settlement is expected to increase the earnings of DutaLand Group for the financial year ending 30 June 2015 by approximately RM70.0 million after deduction of estimated tax and expenses.
3. Net Assets
The Settlement is expected to increase DutaLand Group’s net asset per share from RM1.00 to RM1.08 based on the audited financial statements of DutaLand Group for the financial year ended 30 June 2014.
4. Gearing
The Settlement is expected to reduce the gearing of DutaLand Group from 11% to 3% based on the audited financial statements of DutaLand Group for the financial year ended 30 June 2014.
DIRECTORS’ AND MAJOR SHAREHOLDERS’ INTERESTS
To the best of knowledge of the Company and its Board, none of the Directors and/or major shareholders of DutaLand and/or persons connected with a Director and/or major shareholder of DutaLand have any interest, direct or indirect, in the Settlement.
This announcement is dated 6 February 2015.