The Board of Directors of PacificMas wishes to announce that
PacificMas Fidelity Sdn Bhd, a wholly-owned subsidiary of PacificMas
has on 24 January 2003 entered into a Shareholders' Agreement
to invest in Spring Hill Bioventures Sdn Bhd (formerly known
as Formasi Bermutu Sdn Bhd). |
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| 1. |
PARTICULARS OF THE TRANSACTION |
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PacificMas Fidelity Sdn
Bhd has entered into a Shareholders' Agreement on 24 January
2003 with Spring Hill Bioventures Sdn Bhd, Khazanah Nasional
Berhad, Great Eastern Life Assurance (Malaysia) Berhad and Vertex
Avenue Sdn Bhd for the purpose of investing in Spring Hill Bioventures
Sdn Bhd ("Spring Hill Bioventures"). |
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Spring Hill Bioventures
was formed for the purpose of raising biotechnology venture
capital fund of US$30 million (equivalent to RM114 million)
from the shareholders, namely Khazanah Nasional Berhad, Great
Eastern Life Assurance (Malaysia) Berhad, PacificMas Fidelity
Sdn Bhd and Vertex Avenue Sdn Bhd. |
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PacificMas Fidelity Sdn
Bhd ("PacificMas Fidelity") proposed to subscribe
for the following shares in the share capital of Spring Hill
Bioventures: |
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Ordinary Shares |
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5 ordinary shares of RM1.00
each at a total cash consideration of RM5.00. |
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Class B Redeemable Unconvertible
Preference Shares ("Class B Preference Shares") |
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19,000,000 Class B Preference
Shares of RM0.01 each issued at a premium of RM0.99 for a total
cash consideration of RM19,000,000.00 (equivalent to US$5 million). |
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Hereinafter collectively
referred to as "Proposed Subscription of Shares". |
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| 2. |
INFORMATION ON SPRING
HILL BIOVENTURES |
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Spring Hill Bioventures
was incorporated in Malaysia under the Companies Act, 1965 on
4 September 2002 as a private company limited by shares and
is presently dormant. |
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Spring Hill Bioventures
has entered into a fund management agreement with Spring Hill
Management Sdn Bhd simultaneously with signing of shareholders'
agreement, for the management of the said biotechnology venture
capital fund by Spring Hill Management Sdn Bhd. Spring Hill
Management Sdn Bhd is managed by Dr. Tan Kim Sze, an experienced
biotechnology entrepreneur. |
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Spring Hill Bioventures
has submitted an application to the Securities Commission for
registration as a "Venture Capital Corporation". Spring
Hill Bioventures will invest in life sciences and biotechnology
companies. |
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The present and proposed
authorised and paid-up capitals of Spring Hill Bioventures are
as follows: |
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| Authorised Capital |
Existing |
Proposed |
| Ordinary shares |
100,000 ordinary shares of RM1.00
each |
100,000 ordinary shares of RM1.00
each |
| Paid-up Capital |
|
|
| Ordinary shares |
2 ordinary shares of RM1.00 each |
30 ordinary shares of RM1.00
each |
| Class A Redeemable Unconvertible
Preference Shares |
- |
38,000,000 preference shares
of RM0.01 each |
| Class B Redeemable Unconvertible
Preference Shares |
- |
76,000,000 preference shares
of RM0.01 each |
|
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The Proposed Subscription
of Shares by PacificMas Fidelity will represent 16.67% of the
proposed ordinary share capital and of the proposed total preference
share capital (Class A and Class B) respectively of Spring Hill
Bioventures. |
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| 3. |
DETAILS OF THE CONSIDERATION |
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The Proposed Subscription
of Shares is based on the par value RM1.00 per share of the
ordinary shares and par value of RM0.01 and at a premium of
RM0.99 per share for the Class B Preference Shares. |
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Ordinary Shares |
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Ordinary shares will be
subscribed upon fulfilment of all the conditions as stipulated
in the Agreement. |
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Class B Preference Shares |
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Subscription of Class B
Preference Shares will be in 3 tranches upon fulfilment of all
the conditions as stipulated in the Agreement. |
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PacificMas Fidelity will
finance the Proposed Subscription of Shares from internally
generated funds. |
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| 4. |
EFFECTS OF THE TRANSACTION |
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The Proposed Subscription
of Shares does not have any effect on the issued and paid-up
share capital of PacificMas and the substantial shareholders'
shareholdings of PacificMas, as it does not involve any issue
of shares by PacificMas. |
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The Proposed Subscription
of Shares is not expected to have any material effect on the
net tangible assets value of PacificMas, at company and group
levels, based on the latest audited accounts for the financial
year ended 31 December 2001. |
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The Proposed Subscription
of Shares is not expected to have any material effect on the
earnings of PacificMas Group for the financial year ending 31
December 2003. |
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| 5. |
LIABILITIES TO BE ASSUMED |
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There are no liabilities
to be assumed by PacificMas Fidelity arising from the Proposed
Subscription of Shares. |
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| 6. |
APPROVALS REQUIRED |
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In the application to the
Securities Commission for registration as a "Venture Capital
Corporation" by Spring Hill Bioventures, it was proposed
that PacificMas Fidelity will be a shareholder of Spring Hill
Bioventures. The said application is still pending the approval
of the Securities Commission. |
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Based on the percentage
ratios computed for the Proposed Subscription of Shares pursuant
to the Kuala Lumpur Stock Exchange Listing Requirements, the
Proposed Subscription of Shares does not require approval from
the shareholders of PacificMas nor the appointment of an independent
corporate adviser. |
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| 7. |
DIRECTORS' AND SUBSTANTIAL
SHAREHOLDERS' INTEREST |
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Great Eastern Life Assurance
(Malaysia) Berhad ("GELA") is a wholly-owned subsidiary
of The Great Eastern Life Assurance Company Limited ("GELA
Singapore"). GELA Singapore is a wholly-owned subsidiary
of Great Eastern Holdings Limited. Oversea-Chinese Banking Corporation
Limited ("OCBC") has a total interest of 48.92% in
Great Eastern Holdings Limited. |
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OCBC is a substantial shareholder
of PacificMas holding a total interest of 28.15%. |
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Mr. Choi Siew Hong is a
director of PacificMas, PacificMas Fidelity and GELA. He has
a total interest of 0.12% in PacificMas. He does not have any
interest in GELA. |
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Mr. Wong Nang Jang is a
director of PacificMas and OCBC. He does not hold any shares
in PacificMas. He has 119,175 stocks (direct and indirect interests)
in OCBC, representing 0.01% of the total issued paid-up capital
of OCBC. He has share options to subscribe for 319,796 ordinary
shares in OCBC. Upon the exercise of these options, the shares
arising from the allotment of such exercise of share options
will be converted into stocks. |
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Y. Bhg. Datuk Fong Weng
Phak is a director of PacificMas and OCBC. He does not hold
any shares in PacificMas and has 29,782 stocks in OCBC. |
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Mr. Ng Hon Soon, a director
of few subsidiaries of PacificMas (including PacificMas Fidelity),
has been appointed a director of Spring Hill Bioventures on
24 January 2003, representing the interest of PacificMas Fidelity
in Spring Hill Bioventures. He has 5,000 shares (indirect interest)
in PacificMas and he does not hold any shares in Spring Hill
Bioventures. |
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Saved as disclosed above,
none of the Directors and/or his substantial shareholders of
PacificMas and/or person connected to them have any interest,
direct or indirect, in the Proposed Subscription of Shares. |
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| 8. |
RATIONALE FOR THE TRANSACTION |
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This venture capital investment
forms part of the PacificMas Group's effort to diversify into
other financial services businesses in order to raise the profitability
of the group and enhance shareholders' value. Investment by
Spring Hill Bioventures in life sciences and biotechnology companies
will also complement the Company's position as a major healthcare
insurance provider under The Pacific Insurance Berhad, a wholly-owned
subsidiary of PacificMas. |
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| 9. |
SHAREHOLDERS' AGREEMENT |
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A copy of the Shareholders'
Agreement is available for inspection by the shareholders of
PacificMas at its registered office at Level 18, Menara Prudential,
10 Jalan Sultan Ismail, 50250 Kuala Lumpur during normal office
hours. |
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| 10. |
DIRECTORS' RECOMMENDATION |
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The Board of Directors of
PacificMas is of the opinion that the Proposed Subscription
of Shares is in the best interest of the Company. |
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| 11. |
PROSPECTS AND RISK FACTORS
OF THE INTERESTS TO BE ACQUIRED |
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Prospects |
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Spring Hill Bioventures'
technology investments will seek high capital returns from investing
in biotechnology start-ups with superior growth potential, licensing
biotechnology to start-up manufacturing of generic drugs, undervalued
quoted biotechnology companies or biotechnology companies with
near market products. |
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Risk Factors |
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PacificMas Fidelity's investment
into Spring Hill Bioventures carries some principal risks such
as: |
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Biotechnology investments can be significantly
and adversely affected by governmental regulations or deregulation
obsolescence of existing biotechnology and intellectual property
regulations. |
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Market risk resulting from price movements
in shares of investee companies and also these shares have a
higher level of volatility as Spring Hill Bioventures will focus
on biotechnology sector. |
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Valuation and liquidity risk whereby
Spring Hill Bioventures' venture capital investments into private
companies entail a longer investment holding period and the
shares of the investee companies will not be freely traded. |
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| 12. |
ESTIMATED TIME FOR COMPLETION |
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The Proposed Subscription
of Shares is estimated to be completed within 2 years depending
on the timing investment opportunities are identified and approved. |
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| 13. |
SECURITIES COMMISSION'S POLICIES
AND GUIDELINES ON ISSUE/OFFER OF SECURITIES |
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The Proposed Subscription
of Shares does not require the approval of the Securities Commission.
However, the application for registration as a "Venture
Capital Corporation" by Spring Hill Bioventures requires
the approval of the Securities Commission. |
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