SUNWAY HOLDINGS INCORPORATED BERHAD ("SUNINC") - JOINT
VENTURE AGREEMENT BETWEEN SUNWAY CONSTRUCTION SDN BHD ("SUNCON") AND SHANGHAI
WAI GAO QIAO GEOTECHNICS ENGINEERING CO. LTD
This following announcement has been released to Bursa Malaysia Securities
Berhad on 5 July 2005:
1. INTRODUCTION
The Board of Directors wishes to announce that Suncon, a subsidiary of SunInc
has on 30 June 2005 entered into a Joint Venture Agreement ("JVA") with
Shanghai Wai Gao Qiao Geotechnics Engineering Co. Ltd ("Shanghai Co.").
The above parties are desirous of co-operating via a private limited company
known as Brilliant Legacy Sdn Bhd ("JV Company") as their joint venture vehicle
to purchase and take over the assets of GD Construction Sdn Bhd ("GD CO.") and
thereafter to venture into piling and foundation related business.
2. INFORMATION ON SHANGHAI CO.
Shanghai Co. is a company incorporated in the People's Republic of China and
having its address at Southern Mansion Yan'an Hotel Road, No.1111 Yan'an Road,
Shanghai, China ZIP 200040. The principal activity of Shanghai Co. is heavy
injection piling and foundation construction.
3. SALIENT TERMS OF THE JVA
Pursuant to the JVA, the paid-up share capital of the JV Company was increased
from RM2/- to RM1,000,000/- and currently the shareholdings of the JV Company
is as follows: Name of Shareholders No. of Ordinary Shares of RM1.00 each
Percentage (%) Suncon 600,000 60.00 Shanghai Co. 400,000 40.00 Total 1,000,000
100.00
4. RATIONALE
The purpose of Suncon entering into the JVA is to expand into foundation related
businesses so as to complement its core construction business.
5. SOURCE OF FUNDS
Suncon share of equity participation in the JV Company was funded through
internally generated funds.
6. FINANCIAL EFFECTS
6.1 On Share Capital and Substantial Shareholders' Shareholdings
There will be no effect on the share capital and substantial shareholders'
shareholdings of SunInc as the JVA does not involve any allotment or issuance
of new shares by SunInc.
6.2 On Earnings and Net Tangible Assets
The JVA is not expected to have any immediate effect on the earnings and net
tangible assets of SunInc for the current financial year ending 31 December
2005 but is expected to contribute positively to the future earnings of the
Group.
7. APPROVALS REQUIRED
The JVA is not subject to approval of the shareholders of SunInc.
8. DIRECTORS' AND MAJOR SHAREHOLDERS' INTERESTS
Insofar as the Directors are aware, none of the directors or major shareholders
of SunInc or persons connected with them has any interest, direct or indirect,
in the JVA.
9. STATEMENT BY BOARD OF DIRECTORS
The Board of Directors of SunInc is of the opinion that the JVA is in the best
interest of the Group.
This announcement is dated 5 July 2005.
For information only.
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