The Board of Directors of Bermaz Auto Berhad (“BAuto” or “Company”) wishes to inform that its wholly owned subsidiary, Bermaz Capital Sdn Bhd (formerly known as Bermaz Anshin Sdn Bhd) (“BCSB”), has entered into a conditional share subscription agreement (“Agreement”) with EP Manufacturing Bhd (“EPM”) to subscribe for 33,042,439 new ordinary shares (“EPM Shares”) representing approximately 15% of the existing issued share capital of EPM for a total cash consideration of approximately RM19.8 million or at RM0.60 per EPM Share (“Proposed Subscription”).
EPM was incorporated in Malaysia on 11 June 1996 under the Companies Act, 1965 (Repealed) as a private limited company under the name of Lembah Sempurna Sdn Bhd. It was converted into a public company on 8 July 1996 and assumed its present name on 22 July 1996. EPM was initially listed on the Second Board of Bursa Malaysia Securities Berhad on 11 March 1997 and was transferred to the Main Board on 13 September 2004. The existing issued share capital of EPM is 220,282,930 ordinary shares.
The EPM Group is principally involved in the manufacturing and supply of metal body panels, chassis parts and modular assembly of automotive parts and components to original equipment manufacturers. Its customer base includes, among others, Mazda, Perodua, Proton and Honda. EPM is undertaking an expansion plan which involves, among others, the proposed construction of new assembly manufacturing plant in Melaka (“Project”). To fund the Project, EPM proposes to raise RM39.6 million through a private placement of 66.1 million new EPM Shares representing 30% of the existing issued share capital of EPM (“Proposed EPM Placement”), of which the Proposed Subscription forms part of it.
BAuto Group does not hold any EPM Shares and there were no transactions of EPM Shares over the last 12 months prior to the Proposed Subscription. The Proposed Subscription is expected to be completed by end December 2024. On completion of the Proposed Subscription, BAuto (via BCSB) will hold a 11.54% equity stake in the enlarged issued share capital of EPM.
(a) The Agreement is conditional upon approvals being fulfilled, obtained or waived (as the case may be) within 3 months from the date of the Agreement (“Conditions Precedent”) from the following:
(i) Bursa Malaysia Securities Berhad (“Bursa Securities”) for the listing of and quotation for the new EPM Shares;
(ii) EPM shareholders for the Proposed EPM Placement; and
(iii) Any other relevant authorities or third parties, if applicable.
(b) Upon the Conditions Precedent becoming unconditional, BCSB shall within five (5) market days subscribe for the Proposed Subscription and EPM shall within five (5) market days thereof issue and allot the new EPM Shares to BCSB.
(c) The Proposed EPM Placement is also subject to the full subscription of the entire 66.1 million new EPM Shares.
(d) The new EPM Shares to be allotted and issued pursuant to the Proposed EPM Placement shall, upon allotment and issue, rank equally in all respects with the existing EPM Shares, save and except that they shall not be entitled to any dividends, rights, allotment and/or other forms of distributions that may be declared, made or paid to the shareholders of EPM, the entitlement date of which is prior to the date of allotment and issue of the said new EPM Shares.
The subscription price of RM0.60 per new EPM Share was arrived at, between BCSB and EPM, on a willing-buyer willing-seller basis and after taking into consideration the 5-day volume weighted average market price (“5D-VWAP”) of EPM Shares up to and including 10 September 2024, being the last trading date immediately preceding the date of the Agreement.
The subscription price of RM0.60 per EPM Share represents a discount of RM0.0118 or 1.93% to the 5D-VWAP of EPM Shares up to 10 September 2024 of RM0.6118 per EPM Share.
The Proposed Subscription represents an opportunity for BAuto (via BCSB) to acquire a strategic stake and participate in the future profitability of the EPM Group.
No liabilities, including contingent liabilities and guarantees will be assumed by the BAuto Group arising from the Proposed Subscription. BAuto (via BCSB) will fund the Proposed Subscription via internally generated funds.
The Proposed Subscription will not have any effect on the issued share capital and substantial shareholders' shareholdings in BAuto. The Proposed Subscription is not expected to have any material effects on the net equity funds and net earnings of the BAuto Group.
Save for the approvals set out in the Conditions Precedent above, the Proposed Subscription is not subject to the approval of the shareholders of BAuto.
None of the Directors and major shareholders of BAuto and/or persons connected to them has any interest, direct or indirect, in the Proposed Subscription.
The Board of Directors of BAuto is of the opinion that the Proposed Subscription is in the best interest of the BAuto Group.
Pursuant to Chapter 10, Paragraph 10.2(g) of the Main Market Listing Requirements of Bursa Securities (“Listing Requirements”), the highest percentage ratio that is applicable to the Proposed Subscription is 2.43%. This Announcement is made pursuant to Chapter 9, paragraph 9.19(25) of the Listing Requirements.
The Agreement is available for inspection at the Registered Office of BAuto at 12th Floor, Menara Symphony, No. 5, Jalan Prof. Khoo Kay Kim, Seksyen 13, 46200 Petaling Jaya, Selangor Darul Ehsan, during normal office hours from Mondays to Fridays (except public holidays) for a period of three (3) months from the date of this Announcement.
This Announcement is dated 11 September 2024.
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