UMW HOLDINGS BHD Segmental results Extraordinary General Meeting 15 October 2019 1
PURPOSE OF EGM We seek your approval for the: ▪ proposed disposal of 10 lots of industrial leasehold land at Jalan Utas 15/7 & Jalan Pengisar 15/9 Shah Alam owned by various subsidiaries of the UMW Group. ▪ and the subsequent proposed tenancy of part of the properties 6.16 acres Former UMW Corporate Office (Lot 10) UMW Industries (Lot 14 & 16) UMW M&E Office & Lubricant Plant (Lot UMW Equipment & UMW Advantech (Lot 3) Additional Parking (Lot 51) 6 & 8) 2 UMW HOLDINGS BERHAD
PROPOSED DISPOSAL The proposed disposal consideration of RM287.7m represents a premium of approximately 6.95% over the market value 10 lots of industrial leasehold land including Properties buildings, structures and plants located in Shah Alam with unexpired term ranging from 50 to 59 years Total land size 38.803 acres (1,690,298 sq ft) Subsidiaries of UMW Holdings Berhad Vendors Purchaser Strategic Sonata Sdn Bhd (SSSB) RM287.7 million (1) Disposal Consideration RM269.0 million (2) Market Value (1) A private bidding exercise to seek prospective buyers for the Shah Alam Properties were conducted in two (2) stages, whereby SSSB was the highest bidder with the lowest tenancy charges. The Disposal Consideration was arrived at on a willing-buyer willing-seller basis after taking into consideration the market value of the Shah Alam Properties. (2) as ascribed by Messrs Raine & Horne International Zaki + Partners Sdn Bhd on 30 June 2019 vide its valuation report dated 26 July 2019, which was arrived at using the cost approach as the principal valuation methodology and counter-checked against the investment approach. 3 UMW HOLDINGS BERHAD
RATIONALE & BENEFITS OF THE PROPOSED DISPOSAL In line with the UMW Group’s overall strategy of ensuring sustainable value creation for shareholders • It will facilitate the planned relocation of existing business operations in Shah Alam to the UMW High Value Manufacturing Park (HVM) Park in Serendah. This move is expected to Drive influx of greenfield Strengthen the ecosystem for Elevate the value of $ UMW’s land in high-value, advanced manufacturing manufacturing activities at the site investments Serendah • Monetising the Group’s land assets in Shah Alam will further enable UMW to fund the capital expenditure of distribute a special cash $ dividend to existing $ the Equipment and M&E shareholders business 4
USE OF PROCEEDS Amount Expected timeframe from Description of use (RM’000) receipt of proceeds Capital expenditure (1) 12 months 70,000 Settlement of maturing debt (2) 8 months 150,000 Working capital of UMW Group (3) 4,068 1 month Special cash dividend (4) 46,732 3 months Defray estimated expenses relating to the Proposals (5) 16,900 3 months Total 287,700 (1) includes the upgrading of plant, equipment and tools in the M&E segment and purchases for the Equipment segment’s leasing business. (2) earmarked towards the settlement of Senior Sukuk that will mature in June 2020. (3) to fund day-to-day operations which include, but not limited to, payment to suppliers and payment of staff related expenses. (4) based on the number of ordinary shares of UMWH (“ UMWH Shares ”) in issue of 1,168,293,932 as at 31 August 2019 and special cash dividend of RM0.04 per UMWH Share, the estimated amount to be distributed to the entitled shareholders of UMWH is approximately RM46.7 million. The entitlement date and actual amount to be distributed will be determined and announced later. (5) Estimated RPGT payable 12,281 Other expenses related / incidental to the Proposals 66 Professional Fees 4,163 Fees payable to the relevant authority 53 Expenses relating to the printing / 337 *Any shortfall or excess in funds allocated for estimated expenses will be despatch of circular, advertising funded from or used for working capital purposes and this EGM 5
PROPOSED TENANCY UMW will lease part of the Shah Alam Properties from the purchaser to ensure undisrupted business operations prior to the Serendah relocation Tenanted Lots The Shah Alam Properties excluding Lot 2, Lot 51, part of Lot 10 and Lot 18 (Total net lettable area of 707,630 sq ft) 3 years Tenure Rental Rate RM12.6 million per annum Commencement Upon completion of the Proposed Disposal date • The tenancy term provides sufficient time for the construction of requisite facilities in Serendah ahead of the planned relocation • The implied monthly rental rate is lower than most similar properties in terms of lettable area and location RM 1.48 RM 1.32 – RM 2.15 RM 1.80 – RM 2.15 per sq ft per sq ft per sq ft monthly rental rate of similar Implied monthly rental rate of monthly rental rate of most similar properties properties in terms of lettable area & proposed tenancy location 6 UMW HOLDINGS BERHAD
EFFECTS OF THE PROPOSALS Share capital and substantial shareholders’ No effect shareholding Audited as at After the Proposals 31 December 2018 Net assets per UMWH 2.86 3.01 Share (RM) 0.85 0.81 Gearing (times) Audited for the financial year ended After the Proposals (“FYE”) 31 December 2018 Proforma gain from the Proposals attributable to owners of Earnings the Company = RM166.7 (1) million Earnings per UMWH Share 29.49 42.30 (sen) Note: (1) assuming that the Proposals had been effected on 1 January 2018, being the beginning of the FYE 31 December 2018 7
APPROVALS REQUIRED & TIMELINE Approval from Approval from Approval from State Authority Ministry of Shareholders of Economic Affairs of Selangor Vendors Received Received Received 27 Aug 2019 28 June 2019 29 July & 1 Aug 2019 Mid Nov 2019 To be obtained at this • Receipt of Proceeds EGM (15 Oct 2019) • Completion of Proposed Approval from Disposal Shareholders of UMWH • Commencement of Proposed Tenancy (1) Tan Sri Dato’ Sri Hamad Kama Piah bin Che Othman, Datin Paduka Kartini binti Hj Abdul Manaf and Cik Salwah binti Abdul Shukor (“Interested Directors”) have abstained and will continue to abstain from all deliberations and voting at the relevan t Board meetings of our Company in relation to the Proposed Disposal & Proposed Tenancy (“Proposals”). (2) Amanah Saham Bumiputera (“ASB”), Permodalan Nasional Berhad and the Interested Directors will abstain from voting in respect of their direct and/or indirect shareholdings in our Company, if any, on the resolution pertaining to the Proposals tabled at this EGM. ASB and the Interested Directors have undertaken that they will ensure that persons connected with them will abstain from voting in respect of their direct and/or indirect shareholdings in our Company, if any, on the resolution pertaining to the Proposals to be tabled at this EGM 8
THANK YOU 9
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