LEONG HUP HOLDINGS BERHAD - Announcements

THIS CIRCULAR IS IMPORTANT AND REQUIRES YOUR IMMEDIATE ATTENTION. 

If you are in any doubt as to the course of action to be taken, you should consult your stockbroker, bank manager, solicitor, accountant 

or other professional adviser immediately. If you have sold all your shares in Leong Hup Holdings Berhad, you should at once hand this 

Circular to the agent through whom the sale was contracted for immediate transmission to the purchaser. 

The Kuala Lumpur Stock Exchange takes no responsibility for the contents of this Circular, makes no representation as to its accuracy 

or completeness, and expressly disclaims any liability whatsoever for any loss howsoever arising from or in reliance upon the whole or 

any part of the contents of this Circular. 

LEONG HUP HOLDINGS BERHAD 

(Company No. 51316-D) 

(Incorporated in Malaysia) 

PART A 

CIRCULAR TO SHAREHOLDERS 

in relation to:- 

I. PROPOSED ACQUISITION BY LEONG HUP HOLDINGS BERHAD (“LHHB”) OF AN ADDITIONAL 20% EQUITY 

INTEREST IN PANGKAL BUDIMAN SDN. BHD. (“BUDIMAN”) COMPRISING 1,300,000 ORDINARY SHARES OF 

RM1.00 EACH FROM BUKIT GAMBIR COMPANY SDN. BHD. (“BUKIT GAMBIR”), JAYAPLUS BAKTI SDN. BHD. 

(“JAYAPLUS”) AND PATHALON INDUSTRIES SDN. BHD. FOR A CASH CONSIDERATION OF RM3,926,000 

II. PROPOSED DISPOSAL BY LHHB OF 31% EQUITY INTEREST IN ATLASPRISE SDN. BHD. COMPRISING 465,000 

ORDINARY SHARES OF RM1.00 EACH TO BUKIT GAMBIR FOR A CASH CONSIDERATION OF RM465,000 

III. 

IV. 

PROPOSED DISPOSAL BY BUDIMAN OF 73.845 ACRES OF FREEHOLD LAND IN MUKIM OF PULAI, DISTRICT OF 

JOHOR BAHRU, STATE OF JOHOR TO JAYAPLUS FOR A CONSIDERATION OF RM14,153,428.08 TO BE 

SATISFIED BY THE SETTING OFF OF ALL THE SHAREHOLDERS’ ADVANCES GRANTED BY JAYAPLUS TO 

BUDIMAN AND THE BALANCE IN CASH 


JOHOR BAHRU, STATE OF JOHOR TO BUKIT GAMBIR FOR A CONSIDERATION OF RM25,375,355.28 TO BE 

SATISFIED BY THE SETTING OFF OF ALL THE SHAREHOLDERS’ ADVANCES GRANTED BY BUKIT GAMBIR TO 

BUDIMAN AND THE BALANCE IN CASH 

V. PROPOSED ACQUISITION BY LHHB OF AN ADDITIONAL 20% EQUITY INTEREST IN BUDIMAN COMPRISING 

1,300,000 ORDINARY SHARES OF RM1.00 EACH FROM AMALAN TEPAT SDN. BHD. (“AMALAN”) FOR A 

CONSIDERATION OF RM3,926,000 TO BE SATISFIED BY WAY OF SET-OFF AGAINST THE AMOUNT OWING BY 

AMALAN TO LEONG HUP MANAGEMENT SDN. BHD. 

VI. 


JOHOR BAHRU, STATE OF JOHOR TO BUKIT GAMBIR FOR A CONSIDERATION OF RM22,965,180.48 TO BE 

SATISFIED BY RM10 MILLION CASH AND THE ISSUANCE OF NEW ORDINARY SHARES OF RM1.00 EACH WORTH 

RM12,965,180.48 AT THE INITIAL PUBLIC OFFERING PRICE BY THE PROPOSED NEW HOLDING COMPANY OF 

BUKIT GAMBIR WHICH IS IN THE COURSE OF PREPARING AN APPLICATION TO THE SECURITIES COMMISSION 

FOR LISTING ON THE KUALA LUMPUR STOCK EXCHANGE 

(COLLECTIVELY “PROPOSALS”) 

PART B 

INDEPENDENT ADVICE TO THE SHAREHOLDERS OF LHHB IN RELATION TO THE PROPOSALS 

Independent Adviser 

The Notice of Extraordinary General Meeting (“EGM”) to be held at Mutiara, Level 2, The Puteri Pan Pacific Hotel, Jalan Salim, 80730 Johor 

Bahru, Johor Darul Takzim on Wednesday, 27 June 2001 at 11.00 a.m. is enclosed together with the Form of Proxy in this Circular. 

The Form of Proxy should be lodged at the Registered Office of the Company at 201-203 Jalan Abdullah, 84000 Muar, Johor not later than 

48 hours before the time of the EGM. The last day and time for lodging the Form of Proxy is Monday, 25 June 2001 at 11.00 a.m.. 

This Circular is dated 12 June 2001.

DEFINITIONS 

For the purpose of this Circular, except where the context otherwise requires, the following terms and expressions 

shall have the following meanings:- 

73.845-Acre Land − The 73.845 acres of freehold land, as comprised in the Budiman Land, 

to be disposed of by Budiman to Jayaplus pursuant to the Proposed 

Disposal of 73.845-Acre Land. 

132.395-Acre Land − The 132.395 acres of freehold land, as comprised in the Budiman 

Land, to be disposed of by Budiman to Bukit Gambir pursuant to the 

Proposed Disposal of 132.395-Acre Land. 

119.82-Acre Land − The 119.82 acres of freehold land, as comprised in the Budiman Land, 

to be disposed of by Budiman to Bukit Gambir pursuant to the 

Proposed Disposal of 119.82-Acre Land. 

Agricultural Land − Collectively the two (2) pieces of freehold land held under E.M.R. 

494, Lot No. 375 and Certificate of Title 6387, Lot No. 1732 in 

Mukim of Pengerang, District of Kota Tinggi, State of Johor 

measuring in total approximately 112.125 acres, of which Atlasprise is 

the registered proprietor. Atlasprise has obtained the approval in 

principle of the Johor State Authority for a leisure farm development 

on the Agricultural Land. 

Atlasprise − Atlasprise Sdn. Bhd. (418469-V), a 55.0% owned subsidiary of 

LHHB. 

Atlasprise Approvals in Principle − Collectively the following approvals in principle obtained by 

Atlasprise from the Johor State Authority:- 

(a) 

(b) 

Approval in principle dated 12 November 1998 for the proposed 

industrial development on the Industrial Land; and 

Approval in principle dated 19 August 1999 for the proposed 

leisure farm development on the Agricultural Land. 

Atlasprise Land − The Industrial Land and the Agricultural Land collectively. 

Amalan − Amalan Tepat Sdn. Bhd. (223294-D) 

Arab-Malaysian − Arab-Malaysian Merchant Bank Berhad (23742-V) 

Board − The Board of Directors of LHHB 

Budiman − Pangkal Budiman Sdn. Bhd. (309400-V), a 50.1% owned subsidiary of 

LHHB. 

Budiman Approval − The approval obtained by Budiman from the Johor State Authority on 

22 October 1999 for the proposed mixed development on the Budiman 

Land. 

Budiman Land − Collectively the two (2) pieces of freehold land held under H.S.(D) 

235359, P.T.D. 71014 and H.S.(D) 235361, P.T.D. 71016 in Mukim 

of Pulai, District of Johor Bahru, State of Johor measuring in total 

approximately 855.21 acres, of which Budiman is the registered 

proprietor.

Bukit Gambir − Bukit Gambir Company Sdn. Bhd. (5114-D) 

Bukit Gambir Loan 1 − The proposed loan of not less than RM12.646 million to be obtained 

by Bukit Gambir from OCBC towards completion of the Proposed 


Bukit Gambir Loan 2 − The proposed loan of not less than RM10 million to be obtained by 

Bukit Gambir from OCBC towards completion of the Proposed 


Consideration Shares − The new Shares worth RM12,965,180.48 to be issued by Newco to 

Budiman at the initial public offering price in partial satisfaction of the 

consideration for the Proposed Disposal of 119.82-Acre Land. 

EGM − Extraordinary General Meeting 

EPS − Earnings per Share 

ESOS − Employee share option scheme 

FIC − Foreign Investment Committee 

First Proposed Acquisition of 

Budiman Shares 

− 

The proposed acquisition by LHHB from the Vendors of an additional 

20% equity interest in Budiman comprising 1,300,000 Shares for a 

total cash consideration of RM3,926,000. 

Industrial Land − Collectively the two (2) pieces of freehold land held under Grant No. 

10427, Lot No. 1158 and Certificate of Title 6386, Lot No. 1730 in 

Mukim of Pengerang, District of Kota Tinggi, State of Johor 

measuring in total approximately 117.625 acres, of which Atlasprise is 

the registered proprietor. Atlasprise has obtained the approval in 

principle of the Johor State Authority for an industrial development on 

the Industrial Land. 

Jayaplus − Jayaplus Bakti Sdn. Bhd. (264364-A) 

Jayaplus Loan − The proposed loan of not less than RM7.054 million to be obtained by 

Jayaplus from OCBC towards completion of the Proposed Disposal of 

73.845-Acre Land. 

KLSE − Kuala Lumpur Stock Exchange (30632-P) 

LHHB or Company − Leong Hup Holdings Berhad (51316-D) 

LHHB Group or Group − LHHB and its subsidiaries 

LHM − Leong Hup Management Sdn. Bhd. (163695-A), a substantial 

shareholder of LHHB 

Newco − The proposed new holding company of Bukit Gambir which is in the 

course of preparing an application to the SC for listing on the KLSE. 

Newco expects to submit its application to the SC by July 2001. 

NTA − Net tangible assets 

OCBC − OCBC Bank (Malaysia) Berhad

Pathalon − Pathalon Industries Sdn. Bhd. (64921-K) 

Proposals − The First Proposed Acquisition of Budiman Shares, Proposed Disposal 

of Atlasprise Shares, Proposed Disposal of 73.845-Acre Land, 

Proposed Disposal of 132.395-Acre Land, Second Proposed 

Acquisition of Budiman Shares and Proposed Disposal of 119.82-Acre 

Land collectively. 

Proposed Disposal of Atlasprise 

Shares 

Proposed Disposal of 73.845-Acre 

Land 

− 

− 

The proposed disposal by LHHB to Bukit Gambir of 31% equity 

interest in Atlasprise comprising 465,000 Shares for a total cash 

consideration of RM465,000. 

The proposed disposal by Budiman to Jayaplus of the 73.845-Acre 

Land for a total consideration of RM14,153,428.08 to be satisfied by 

the setting off of all the shareholders’ advances granted by Jayaplus to 

Budiman as at the completion date of the Sale and Purchase 

Agreement in respect of the Proposed Disposal of 73.845-Acre Land, 

the Jayaplus Loan and the balance in cash. 

Proposed Disposal of 132.395- 

Acre Land 

Proposed Disposal of 119.82-Acre 

Land 

− The proposed disposal by Budiman to Bukit Gambir of the 132.395- 

Acre Land for a total consideration of RM25,375,355.28 to be 

satisfied by the setting off of all the shareholders’ advances granted by 

Bukit Gambir to Budiman as at the completion date of the Sale and 

Purchase Agreement in respect of the Proposed Disposal of 132.395- 

Acre Land, the Bukit Gambir Loan 1 and the balance in cash. 

− The proposed disposal by Budiman to Bukit Gambir of the 119.82- 

Acre Land for a total consideration of RM22,965,180.48 to be 

satisfied by the Bukit Gambir Loan 2 and the issuance of the 

Consideration Shares. 

RM and sen − Ringgit Malaysia and sen respectively 

SC − Securities Commission 

Second Proposed Acquisition of 


− 

The proposed acquisition by LHHB from Amalan of an additional 

20% equity interest in Budiman comprising 1,300,000 Shares for a 

total consideration of RM3,926,000 to be satisfied by way of set-off 

against the amount owing by Amalan to LHM. As at 15 May 2001, 

the amount owing by Amalan to LHM was RM21.707 million. 

Shares − Ordinary shares of RM1.00 each 

Vendors − In respect of the First Proposed Acquisition of Budiman Shares, Bukit 

Gambir, Jayaplus and Pathalon collectively.

TABLE OF CONTENTS 

Page 

PART A – DIRECTORS’ LETTER TO THE SHAREHOLDERS OF LHHB 

1. INTRODUCTION.................................................................................................................................... 2-3 

2. INFORMATION ON BUDIMAN, ATLASPRISE AND BUDIMAN LAND......................................... 3-6 

2.1 Budiman ...................................................................................................................................... 3-4 

2.2 Atlasprise..................................................................................................................................... 4-5 

2.3 Budiman Land ................................................................................................................................ 6 

3. INFORMATION ON BUKIT GAMBIR, JAYAPLUS, PATHALON, AMALAN AND LHM.............. 7-9 

3.1 Bukit Gambir.................................................................................................................................. 7 

3.2 Jayaplus ...................................................................................................................................... 7-8 

3.3 Pathalon ......................................................................................................................................... 8 

3.4 Amalan ........................................................................................................................................... 9 

3.5 LHM ............................................................................................................................................... 9 

4. DETAILS OF THE PROPOSALS ....................................................................................................... 10-17 

4.1 Salient Terms of the First Proposed Acquisition of Budiman Shares.......................................... 10 

4.2 Salient Terms of the Proposed Disposal of Atlasprise Shares................................................ 10-11 

4.3 Salient Terms of the Proposed Disposal of 73.845-Acre Land............................................... 11-12 

4.4 Salient Terms of the Proposed Disposal of 132.395-Acre Land............................................. 13-14 

4.5 Salient Terms of the Second Proposed Acquisition of Budiman Shares...................................... 14 

4.6 Salient Terms of the Proposed Disposal of 119.82-Acre Land............................................... 15-16 

4.7 Inter-Conditionality...................................................................................................................... 16 

4.8 Related-Party Transactions .................................................................................................... 16-17 

5. BASIS OF DETERMINING THE CONSIDERATION FOR THE PROPOSALS ............................. 17-19 

5.1 First and Second Proposed Acquisition of Budiman Shares........................................................ 17 

5.2 Proposed Disposal of Atlasprise Shares...................................................................................... 18 

5.3 Proposed Disposal of 73.845-Acre Land, Proposed Disposal of 132.395-Acre Land and 

Proposed Disposal of 119.82-Acre Land................................................................................ 18-19 

6. RATIONALE FOR THE PROPOSALS.................................................................................................... 19 

7. SOURCES OF FUNDS AND UTILISATION OF PROCEEDS .............................................................. 20 

7.1 Sources of Funds.......................................................................................................................... 20 

7.2 Utilisation of Proceeds................................................................................................................. 20 

8. EFFECTS OF THE PROPOSALS ....................................................................................................... 20-21 

8.1 Share Capital ............................................................................................................................... 20 

8.2 Substantial Shareholders ............................................................................................................. 20 

8.3 Earnings ....................................................................................................................................... 20 

8.4 NTA and Gearing ......................................................................................................................... 21

9. CONDITIONS PRECEDENT.............................................................................................................. 21-23 

9.1 Inter-Conditional Proposals ................................................................................................... 21-22 

9.2 Second Proposed Acquisition of Budiman Shares ....................................................................... 22 

9.3 Proposed Disposal of 119.82-Acre Land..................................................................................... 23 

10. DIRECTORS’ AND SUBSTANTIAL SHAREHOLDERS’ INTERESTS............................................... 23 

11. INDEPENDENT ADVISER ..................................................................................................................... 24 

12. DIRECTORS’ RECOMMENDATION .................................................................................................... 24 

13. EXTRAORDINARY GENERAL MEETING .......................................................................................... 24 

14. FURTHER INFORMATION .................................................................................................................... 24 

PART B – INDEPENDENT ADVICE LETTER TO THE SHAREHOLDERS OF LHHB 

1. INTRODUCTION................................................................................................................................ 27-29 

2. LIMITATIONS TO THE EVALUATION OF THE PROPOSALS..................................................... 29-30 

3. DETAILS OF THE PROPOSALS ....................................................................................................... 30-43 

3.1 First Proposed Acquisition of Budiman Shares ...................................................................... 30-32 

3.2 Proposed Disposal of Atlasprise Shares................................................................................. 32-36 

3.3 Proposed Disposal of 73.845-Acre Land................................................................................ 36-38 

3.4 Proposed Disposal of 132.395-Acre Land.............................................................................. 39-40 

3.5 Second Proposed Acquisition of Budiman Shares .................................................................. 40-41 


3.7 Inter-Conditionality...................................................................................................................... 43 

4. RATIONALE FOR THE PROPOSALS.................................................................................................... 44 

5. SOURCES OF FUNDS AND UTILISATION OF PROCEEDS ......................................................... 44-45 

5.1 Sources of Funds.......................................................................................................................... 44 

5.2 Utilisation of Proceeds................................................................................................................. 45 

6. CONDITIONS PRECEDENT.............................................................................................................. 45-47 

6.1 Inter-Conditional Proposals ................................................................................................... 45-46 

6.2 Second Proposed Acquisition of Budiman Shares ....................................................................... 46 


7. DIRECTORS’ AND SUBSTANTIAL SHAREHOLDERS’ INTERESTS............................................... 47 

8. EVALUATION OF THE PROPOSALS .............................................................................................. 47-52 

8.1 Rationale for the Proposals..................................................................................................... 47-48 

8.2 Basis of Determining the Consideration for the Proposals .................................................... 49-50 

8.3 Mode of Financing the First and Second Proposed Acquisition of Budiman Shares............. 50-51 

8.4 Financial Effects of the Proposals .......................................................................................... 51-52 

9. CONCLUSION AND RECOMMENDATION ........................................................................................ 52

APPENDICES 

1. INFORMATION ON LHHB................................................................................................................ 53-58 

2. INFORMATION ON BUDIMAN ....................................................................................................... 59-61 

3. INFORMATION ON ATLASPRISE ................................................................................................... 62-63 

4. AUDITED ACCOUNTS OF BUDIMAN AND ATLASPRISE FOR THE FINANCIAL YEAR ENDED 

31 MARCH 2000 ................................................................................................................................. 64-83 

5. VALUER’S LETTER ON THE 73.845-ACRE LAND, 132.395-ACRE LAND AND 119.82-ACRE 

LAND........................................................................................................................................................ 84 

6. VALUER’S LETTER ON THE ATLASPRISE LAND....................................................................... 85-86 

7. GENERAL INFORMATION............................................................................................................... 87-89 

NOTICE OF EXTRAORDINARY GENERAL MEETING 90 

FORM OF PROXY ENCLOSED

PART A 

DIRECTORS’ LETTER TO THE SHAREHOLDERS OF LHHB

LEONG HUP HOLDINGS BERHAD 

(Company No. 51316-D) 

(Incorporated in Malaysia) 

Registered Office 

201-203 Jalan Abdullah, 

84000 Muar, 

Johor 

12 June 2001 

Directors 

Datuk Lau Chong Wang (Chairman & Managing Director) 

Dato’ Lau Eng Guang (Executive Director) 

Datuk Francis Lau Tuang Nguang (Executive Director) 

Lau Chun Yuen 

Datuk Paduka Hajjah Saleha bte Mohamad Ali 

Major General (Rtd) Datuk Haji Esa bin Ahmad 

Lim Meng Bin 

To: 

The Shareholders of LEONG HUP HOLDINGS BERHAD 

I. PROPOSED ACQUISITION BY LEONG HUP HOLDINGS BERHAD (“LHHB”) OF AN 

ADDITIONAL 20% EQUITY INTEREST IN PANGKAL BUDIMAN SDN. BHD. 

(“BUDIMAN”) COMPRISING 1,300,000 ORDINARY SHARES OF RM1.00 EACH 

FROM BUKIT GAMBIR COMPANY SDN. BHD. (“BUKIT GAMBIR”), JAYAPLUS 

BAKTI SDN. BHD. (“JAYAPLUS”) AND PATHALON INDUSTRIES SDN. BHD. FOR A 

CASH CONSIDERATION OF RM3,926,000 

II. 

III. 

IV. 

PROPOSED DISPOSAL BY LHHB OF 31% EQUITY INTEREST IN ATLASPRISE SDN. 

BHD. COMPRISING 465,000 ORDINARY SHARES OF RM1.00 EACH TO BUKIT 

GAMBIR FOR A CASH CONSIDERATION OF RM465,000 

PROPOSED DISPOSAL BY BUDIMAN OF 73.845 ACRES OF FREEHOLD LAND IN 

MUKIM OF PULAI, DISTRICT OF JOHOR BAHRU, STATE OF JOHOR TO 

JAYAPLUS FOR A CONSIDERATION OF RM14,153,428.08 TO BE SATISFIED BY 

THE SETTING OFF OF ALL THE SHAREHOLDERS’ ADVANCES GRANTED BY 

JAYAPLUS TO BUDIMAN AND THE BALANCE IN CASH 


MUKIM OF PULAI, DISTRICT OF JOHOR BAHRU, STATE OF JOHOR TO BUKIT 

GAMBIR FOR A CONSIDERATION OF RM25,375,355.28 TO BE SATISFIED BY THE 

SETTING OFF OF ALL THE SHAREHOLDERS’ ADVANCES GRANTED BY BUKIT 

GAMBIR TO BUDIMAN AND THE BALANCE IN CASH 

V. PROPOSED ACQUISITION BY LHHB OF AN ADDITIONAL 20% EQUITY INTEREST 

IN BUDIMAN COMPRISING 1,300,000 ORDINARY SHARES OF RM1.00 EACH FROM 

AMALAN TEPAT SDN. BHD. (“AMALAN”) FOR A CONSIDERATION OF 

RM3,926,000 TO BE SATISFIED BY WAY OF SET-OFF AGAINST THE AMOUNT 

OWING BY AMALAN TO LEONG HUP MANAGEMENT SDN. BHD. 

1

VI. 



GAMBIR FOR A CONSIDERATION OF RM22,965,180.48 TO BE SATISFIED BY RM10 

MILLION CASH AND THE ISSUANCE OF NEW ORDINARY SHARES OF RM1.00 

EACH WORTH RM12,965,180.48 AT THE INITIAL PUBLIC OFFERING PRICE BY 

THE PROPOSED NEW HOLDING COMPANY OF BUKIT GAMBIR WHICH IS IN THE 

COURSE OF PREPARING AN APPLICATION TO THE SECURITIES COMMISSION 


1. INTRODUCTION 

On 19 March 2001, the Board announced that LHHB and its subsidiary Budiman had on 19 March 

2001 entered into the following agreements respectively:- 

(a) 

A conditional Sale and Purchase Agreement for the proposed acquisition by LHHB from 

Bukit Gambir, Jayaplus and Pathalon (collectively “Vendors”) of an additional 20% 

equity interest in Budiman comprising 1,300,000 ordinary shares of RM1.00 each 

(“Shares”) for a total cash consideration of RM3,926,000 (“First Proposed Acquisition 

of Budiman Shares”). 

LHHB currently has a 50.1% equity interest in Budiman comprising 3,256,500 Shares. 

The First Proposed Acquisition of Budiman Shares will increase LHHB’s equity interest in 

Budiman to 70.1% comprising 4,556,500 Shares; 

(b) 

A conditional Sale and Purchase Agreement for the proposed disposal by LHHB to Bukit 

Gambir of 31% equity interest in Atlasprise comprising 465,000 Shares for a total cash 

consideration of RM465,000 (“Proposed Disposal of Atlasprise Shares”). 

LHHB currently has a 55.0% equity interest in Atlasprise comprising 825,000 Shares. The 

Proposed Disposal of Atlasprise Shares will reduce LHHB’s equity interest in Atlasprise to 

24.0% comprising 360,000 Shares. Atlasprise will therefore cease to be a subsidiary of 

LHHB upon completion of the Proposed Disposal of Atlasprise Shares, and will instead 

become an associate company of LHHB. 

Bukit Gambir currently has a 20.0% equity interest in Atlasprise comprising 300,000 

Shares. Upon completion of the Proposed Disposal of Atlasprise Shares, Bukit Gambir 

will have a 51.0% equity interest in Atlasprise comprising 765,000 Shares. Atlasprise will 

therefore become a subsidiary of Bukit Gambir. 

(c) 

(d) 

A conditional Sale and Purchase Agreement for the proposed disposal by Budiman to 

Jayaplus of 73.845 acres of freehold land (“73.845-Acre Land”) as comprised in the two 

(2) pieces of land held under H.S.(D) 235359, P.T.D. 71014 and H.S.(D) 235361, P.T.D. 

71016 in Mukim of Pulai, District of Johor Bahru, State of Johor (collectively “Budiman 

Land”), for a total consideration of RM14,153,428.08 to be satisfied by the setting off of 

all the shareholder’s advances granted by Jayaplus to Budiman as at the completion date of 

the Sale and Purchase Agreement, the Jayaplus Loan and the balance in cash (“Proposed 

Disposal of 73.845-Acre Land”); 

A conditional Sale and Purchase Agreement for the proposed disposal by Budiman to Bukit 

Gambir of 132.395 acres of freehold land as comprised in the Budiman Land (“132.395- 

Acre Land”), for a total consideration of RM25,375,355.28 to be satisfied by the setting 

off of all the shareholder’s advances granted by Bukit Gambir to Budiman as at the 

completion date of the Sale and Purchase Agreement, the Bukit Gambir Loan 1 and the 

balance in cash (“Proposed Disposal of 132.395-Acre Land”); and 

2

(e) 


Gambir of 119.82 acres of freehold land as comprised in the Budiman Land (“119.82-Acre 

Land”), for a total consideration of RM22,965,180.48 to be satisfied by the Bukit Gambir 

Loan 2 and by the issuance of new Shares worth RM12,965,180.48 (“Consideration 

Shares”) by the proposed new holding company of Bukit Gambir (“Newco”) which is in 

the course of preparing an application to the Securities Commission (“SC”) for listing on 

the Kuala Lumpur Stock Exchange (“KLSE”) (“Proposed Disposal of 119.82-Acre 

. The Consideration Shares are to be issued by Newco to Budiman at the initial 

public offering price. 

On 11 April 2001, the Board had further announced that LHHB had, on 11 April 2001, entered into 

a conditional Sale and Purchase Agreement for the proposed acquisition by LHHB from Amalan of 

an additional 20% equity interest in Budiman comprising 1,300,000 Shares for a total consideration 

of RM3,926,000 to be satisfied by way of set-off against the amount owing by Amalan to LHM 

(“Second Proposed Acquisition of Budiman Shares”). The consideration is therefore an amount 

owing from LHHB to LHM, and will be set off against the amount owing from LHM to LHHB. 

Together with the First Proposed Acquisition of Budiman Shares, the Second Proposed Acquisition 

of Budiman Shares will increase LHHB’s equity interest in Budiman to 90.1% comprising 

5,856,500 Shares. 

The First Proposed Acquisition of Budiman Shares, Proposed Disposal of Atlasprise Shares, 

Proposed Disposal of 73.845-Acre Land, Proposed Disposal of 132.395-Acre Land, Second 

Proposed Acquisition of Budiman Shares and Proposed Disposal of 119.82-Acre Land shall 

hereinafter be collectively referred to as the “Proposals”. 

The purpose of this Circular is to provide you with the details of the Proposals and to seek your 

approval for the resolutions pertaining to the Proposals to be tabled at the EGM to be convened on 

27 June 2001, the notice of which is set out in this Circular. The information contained in the 

Appendices forms part of this Circular. 

SHAREHOLDERS OF LHHB ARE ADVISED TO READ AND CONSIDER CAREFULLY 

THE INDEPENDENT ADVISER’S LETTER CONTAINED IN PART B OF THIS 

CIRCULAR BEFORE VOTING ON THE RESOLUTIONS TO GIVE EFFECT TO THE 

PROPOSALS AT THE FORTHCOMING EGM. 

2. INFORMATION ON BUDIMAN, ATLASPRISE AND BUDIMAN LAND 

2.1 Budiman 

Budiman was incorporated in Malaysia under the Companies Act, 1965 on 26 July 1994 as 

a private limited company. The current principal activity of Budiman is oil palm 

plantation, whilst its proposed future principal activity is property development. The 

principal asset of Budiman is the Budiman Land. Budiman does not have any subsidiary or 

associate company. 

The present authorised share capital of Budiman is RM10,000,000 comprising 10,000,000 

Shares, of which 6,500,000 Shares have been issued and are fully paid-up. 

3

The shareholders and directors of Budiman and their respective shareholdings as at 15 May 

2001 are set out in the table below. 

Name Direct Shareholding Indirect Shareholding 

No. of Shares % No. of Shares % 

Shareholders 

Bukit Gambir 780,000 12.0 - - 

Jayaplus 455,000 7.0 - - 

Pathalon 65,000 1.0 * 455,000 7.0 

LHHB 3,256,500 50.1 - - 

Amalan Tepat Sdn. Bhd. 1,300,000 20.0 - - 

Chee Kim Hoon 643,500 9.9 - - 

Maharani Properties Sdn. Bhd. - - * 455,000 7.0 

Kim Yin & Sons Holdings Sdn. Bhd. - - * 455,000 7.0 

Binaik Sdn. Bhd. - - * 455,000 7.0 

Tan Lian Choo - - * 455,000 7.0 

Yeo Soo Sia @ Yeo Soo Seng - - * 455,000 7.0 

Hasrin bin Busno - - # 520,000 8.0 

Lee Geok Kim - - * 455,000 7.0 

Lee Choon Jin - - * 455,000 7.0 

Foo Yin Yin - - * 455,000 7.0 

Leong Hup Management Sdn. Bhd. - - @ 3,256,500 50.1 

Datuk Lau Chong Wang - - @ 3,256,500 50.1 

Lau Bong Wong - - @ 3,256,500 50.1 

Amnah bte Ibrahim - - ^ 1,300,000 20.0 

Total 6,500,000 100.0 

Directors 


Lau Bong Wong - - @ 3,256,500 50.1 

Datuk Lau Tuang Nguang - - - - 

Datuk Haji Esa bin Ahmad - - - - 

Chee Kim Hoon 643,500 9.9 - - 


Notes:- 

* Deemed interest through Jayaplus. 

# Deemed interest through Jayaplus and Pathalon. 

@ Deemed interest through LHHB 

^ Deemed interest through Amalan Tepat Sdn. Bhd. 

For the financial year ended 31 March 2000, Budiman recorded a profit after taxation of 

RM0.556 million. Its audited NTA value as at 31 March 2000 was RM9.043 million. For 

the financial year ended 31 March 2001, Budiman recorded an unaudited profit after 

taxation of RM0.267 million. 

Further information on Budiman is set out in Appendix 2. 

2.2 Atlasprise 

Atlasprise was incorporated in Malaysia under the Companies Act, 1965 on 24 January 

1997 as a private limited company. The current principal activity of Atlasprise is oil palm 

plantation, whilst its proposed future principal activity is property development. The 

principal assets of Atlasprise are as follows:- 

(a) 

Two (2) pieces of freehold land held under Grant No. 10427, Lot No. 1158 and 

Certificate of Title 6386, Lot No. 1730 in Mukim of Pengerang, District of Kota 

Tinggi, State of Johor measuring in total approximately 117.625 acres 

(“Industrial Land”). Atlasprise had obtained the approval in principle of the 

Johor State Authority on 12 November 1998 for an industrial development on the 

Industrial Land; and 

4

(b) 

Two (2) pieces of freehold land held under E.M.R. 494, Lot No. 375 and 

Certificate of Title 6387, Lot No. 1732 in Mukim of Pengerang, District of Kota 

Tinggi, State of Johor measuring in total approximately 112.125 acres 

(“Agricultural Land”). Atlasprise had obtained the approval in principle of the 

Johor State Authority on 19 August 1999 for a leisure farm development on the 

Agricultural Land. 

The proposed development on the Industrial Land comprises a total of 62 detached and 

semi-detached industrial lots, whilst the proposed development on the Agricultural Land 

comprises 90 homestead lots. The respective proposed developments have yet to 

commence as the time of their commencement would depend on the conditions in the 

property market. 

The Industrial Land and the Agricultural Land shall hereinafter be collectively referred to 

as the “Atlasprise Land”, and the respective approvals in principle of the Johor State 

Authority mentioned above shall hereinafter be collectively referred to as the “Atlasprise 

Approvals in Principle”. 

A valuation of the Atlasprise Land was carried out by Colliers Jordan Lee & Jaafar (JH) 

Sdn. Bhd., an independent firm of professional valuers, on 28 February 2001 using the 

comparison method, pursuant to which the said firm determined the open market value of 

the Atlasprise Land with the benefit of the Atlasprise Approvals in Principle, to be 

RM17,000,000 or approximately RM1.70 per square foot. As the unaudited net book 

value of the Atlasprise Land as at 30 November 2000 (being the reference date used for 

arriving at the consideration for the Proposed Disposal of Atlasprise Shares) was 

RM20.660 million, the loss on revaluation amounted to RM3.660 million. The loss on 

revaluation will not be incorporated into the accounts of Atlasprise, as the sole purpose of 

the revaluation was to establish a market value for the Atlasprise Land and hence the 

adjusted NTA value of Atlasprise. The audited net book value of the Atlasprise Land as at 

31 March 2000 was RM19.659 million. 

The Atlasprise Land is currently charged to Arab-Malaysian Finance Berhad for securing 

the credit facilities granted to Atlasprise towards completion of the purchase of the 

Atlasprise Land. 

Atlasprise does not have any subsidiary or associate company. 

The present authorised share capital of Atlasprise is RM5,000,000 comprising 5,000,000 


The shareholders and directors of Atlasprise and their respective shareholdings as at 15 

May 2001 are set out in the table below. 



Shareholders 

LHHB 825,000 55.0 - - 

Bukit Gambir 300,000 20.0 - - 

Datuk Lau Tuang Nguang 150,000 10.0 - - 

Dato’ Mohamed Salleh bin Ahmad 225,000 15.0 - - 

Leong Hup Management Sdn. Bhd. - - * 825,000 55.0 

Datuk Lau Chong Wang - - * 825,000 55.0 

Lau Bong Wong - - * 825,000 55.0 

Total 1,500,000 100.0 

Directors 




Yeo Soo Sia @ Yeo Soo Seng - - - - 

5

Note:- 

* Deemed interest through LHHB. 

For the financial year ended 31 March 2000, Atlasprise recorded a profit after taxation of 

RM0.084 million. Its audited NTA value as at 31 March 2000 was RM1.847 million. For 

the financial year ended 31 March 2001, Atlasprise recorded an unaudited profit after 

taxation of RM0.072 million. 

Further information on Atlasprise is set out in Appendix 3. 

2.3 Budiman Land 

The Budiman Land comprises two (2) pieces of freehold agricultural land held under 

H.S.(D) 235359, P.T.D. 71014 and H.S.(D) 235361, P.T.D. 71016 in Mukim of Pulai, 

District of Johor Bahru, State of Johor measuring in total approximately 855.21 acres. 

Budiman had obtained the final approval of the Johor State Authority on 22 October 1999 

for the alteration of the category of land use of the Budiman Land and the subdivision 

thereof into individual lots for the purpose of a mixed development (“Budiman 

Approval”). The proposed development on the Budiman Land comprises a total of 11,132 

units of development comprising terrace houses, semi-detached houses, detached houses, 

apartments, flats and shops. The proposed development has yet to commence as the time of 

commencement would depend on the conditions in the property market. The balance of the 

Budiman Land after the Proposed Disposal of 73.845-Acre Land, Proposed Disposal of 

132.395-Acre Land and Proposed Disposal of 119.82-Acre Land would be 529.15 acres. 

A valuation of the 73.845-Acre Land, 132.395-Acre Land and 119.82-Acre Land 

collectively was carried out by Colliers Jordan Lee & Jaafar (JH) Sdn. Bhd., an 

independent firm of professional valuers, on 28 February 2001 using the comparison 

method, and checked by the residual method, pursuant to which the said firm determined 

the aggregate open market value of the said lands with the benefit of the Budiman 

Approval, to be RM62,500,000 or approximately RM4.40 per square foot. This translates 

into an open market value of RM163.913 million for the entire Budiman Land. As the 

estimated net book value of the Budiman Land as at 31 March 2001 (being the reference 

date used for arriving at the consideration for the First and Second Proposed Acquisition of 

Budiman Shares) is RM153.470 million, the revaluation surplus is estimated to be 

RM10.443 million. The net book value incorporates the cost of the Budiman Land 

amounting to RM117.591 million and development expenditure amounting to RM35.879 

million which includes capitalised interest, subdivision costs and other incidental costs. 

The revaluation surplus will not be incorporated into the accounts of Budiman, as the sole 

purpose of the revaluation was to establish a market value for the 73.845-Acre Land, 

132.395-Acre Land and 119.82-Acre Land and the adjusted NTA value of Budiman. 

The audited net book value of the Budiman Land as at 31 March 2000 was RM147.865 

million. On a proportionate basis, the net book value of the 73.845-Acre Land, 132.395- 

Acre Land and 119.82-Acre Land collectively as at 31 March 2000 was RM56.38 

million. 

The Budiman Land is currently charged to OCBC Bank (Malaysia) Berhad (“OCBC”) for 

securing the credit facilities granted to Budiman towards completion of the purchase of the 

Budiman Land. 

6

3. INFORMATION ON BUKIT GAMBIR, JAYAPLUS, PATHALON, AMALAN AND LHM 

3.1 Bukit Gambir 

Bukit Gambir was incorporated in Malaysia under the Companies Act, 1965 on 19 

September 1963 as a private limited company. The principal activities of Bukit Gambir are 

plantation and housing development. 

The present authorised share capital of Bukit Gambir is RM2,000,000 comprising 200,000 

shares of RM10.00 each, of which 80,000 shares have been issued and are fully paid-up. 

The shareholders and directors of Bukit Gambir and their respective shareholdings as at 15 

May 2001 are set out in the table below. 



Shareholders 

Yeo Gee Meng @ Yeo Kee Tee 1,600 2.00 - - 

Yeo Soo Sia @ Yeo Soo Seng 6,800 8.50 - - 

Yeo Soo Mong 4,600 5.75 - - 

Yeo Poh Tee @ Yeo Tze Poh 6,400 8.00 - - 

Yeo Soo Kiat 10,204 12.755 - - 

Yeo Sze Chiang 2,000 2.50 - - 

Yeo Soo Kim 4,700 5.88 - - 

Yang Shaw Ching @ Ew Siew Tee 4,000 5.00 - - 

Yeo Soo How 4,700 5.88 - - 

Yeo Soo Ngai 6,232 7.79 - - 

Yeo Soo Jeng 4,900 6.125 - - 

Yeo Siow Poh @ Yeo Jee Tee 4,000 5.00 - - 

Tan Swee Tian 5,000 6.25 - - 

Lau Ngan Nai (deceased) 2,068 2.58 - - 

YBH Emas Sdn. Bhd. 7,296 9.12 - - 

Yeo Soo We @ You Su We 5,500 6.87 - - 

Total 80,000 100.00 

Directors 

Yeo Soo Kiat 10,204 12.755 - - 


Yeo Soo Kim 4,700 5.88 - - 

Yeo Soo How 4,700 5.88 - - 

Yeo Soo Jeng 4,900 6.125 - - 

Yeo Soo Ngai 6,232 7.79 - - 

3.2 Jayaplus 

Jayaplus was incorporated in Malaysia under the Companies Act, 1965 on 17 May 1993 as 

a private limited company. The principal activity of Jayaplus is property development. 

The present authorised share capital of Jayaplus is RM5,000,000 comprising 5,000,000 


7

The shareholders and directors of Jayaplus and their respective shareholdings as at 15 May 




Shareholders 

Maharani Properties Sdn. Bhd. 1,021,800 65.00 

Kim Yin & Sons Holdings Sdn. Bhd. 550,200 35.00 

Binaik Sdn. Bhd. - - * 1,021,800 65.00 

Tan Lian Choo - - * 1,021,800 65.00 

Yeo Soo Sia @ Yeo Soo Seng - - * 1,021,800 65.00 

Hasrin bin Busno - - * 1,021,800 65.00 

Pathalon Industries Sdn. Bhd. - - * 1,021,800 65.00 

Lee Geok Kim - - # 550,200 35.00 

Lee Choon Jin - - # 550,200 35.00 

Foo Yin Yin - - # 550,200 35.00 

Total 1,572,000 100.00 

Directors 

Yeo Soo Sia @ Yeo Soo Seng - - * 1,021,800 65.00 

Yeo Soo Jeng - - - - 

Yeo Soo Kiat - - - - 

Yeo Soo Ngai - - - - 

Notes:- 

* Deemed interest through Maharani Properties Sdn. Bhd. 

# Deemed interest through Kim Yin & Sons Holdings Sdn. Bhd. 

3.3 Pathalon 

Pathalon was incorporated in Malaysia under the Companies Act, 1965 on 28 November 

1980 as a private limited company under the name of Syarikat Galian Yee Sang Sdn. Bhd. 

and assumed its present name on 21 May 1987. The principal activity of Pathalon is 

investment in properties, land and other securities. 

The present authorised share capital of Pathalon is RM2,500,000 comprising 2,500,000 

Shares, of which 250,000 Shares have been issued and are fully paid-up. 

The shareholders and directors of Pathalon and their respective shareholdings as at 15 May 




Shareholders 

Hasrin bin Busno 45,000 18.00 - - 

Jamaludin bin Zainal 35,000 14.00 - - 


Yeo Soo Jeng 21,250 8.50 - - 

Yeo Soo Ngai 21,250 8.50 - - 

Yeo Soo Kiat 21,250 8.50 - - 

Yeo Soo We @ You Su We 21,250 8.50 - - 

Yeo Soo Mong 21,250 8.50 - - 

Yeo Soo Kim 21,250 8.50 - - 

Yeo Soo How 21,250 8.50 - - 

Total 250,000 100.00 

Directors 

Hasrin bin Busno 45,000 18.00 - - 


Yeo Soo Jeng 21,250 8.50 - - 

Yeo Soo Ngai 21,250 8.50 - - 

Yeo Soo Kiat 21,250 8.50 - - 

8

3.4 Amalan 

Amalan was incorporated in Malaysia under the Companies Act, 1965 on 20 August 1991 

as a private limited company. The principal activities of Amalan are property development, 

investment holding and property holding. 

The present authorised share capital of Amalan is RM10,000,000 comprising 10,000,000 


The shareholders and directors of Amalan and their respective shareholdings as at 15 May 




Shareholders 

Datuk Lau Chong Wang 487,500 9.56 - - 

Lau Bong Wong 487,500 9.56 - - 

Lau Chia Nguang 485,000 9.51 - - 

Datuk Lau Chir Nguan 485,000 9.51 - - 

Dato’ Lau Eng Guang 485,000 9.51 - - 

Lau Hai Nguan 485,000 9.51 - - 


Amnah bte Ibrahim 1,700,000 33.33 - - 

Total 5,100,000 100.00 

Directors 


Ramlee bin Bachek - - - - 

3.5 LHM 

LHM was incorporated in Malaysia under the Companies Act, 1965 on 21 August 1987 as 

a private limited company. LHM is principally an investment holding company. It 

currently holds a controlling stake of 43.95% in LHHB. 

The present authorised share capital of LHM is RM250,000 comprising 250,000 Shares, of 

which 100,000 Shares have been issued and are fully paid-up. 

The shareholders and directors of LHM and their respective shareholdings as at 15 May 




Shareholders 


Lau Bong Wong 26,000 26.00 - - 




Lau Hai Nguan 12,000 12.00 - - 

Total 100,000 100.00 

Directors 


Lau Bong Wong 26,000 26.00 - - 




Lau Hai Nguan 12,000 12.00 - - 

9

4. DETAILS OF THE PROPOSALS 

4.1 Salient Terms of the First Proposed Acquisition of Budiman Shares 

(a) 

Shares Acquired Free from Encumbrances 

The 1,300,000 Shares in Budiman to be acquired by LHHB pursuant to the First 

Proposed Acquisition of Budiman Shares will be acquired free from all 

encumbrances and with all rights attaching thereto or accruing thereon as at and 

from the date of the Sale and Purchase Agreement, including all rights to dividends 

and other distributions declared, made and paid thereafter. 

(b) 

LHHB to Discharge Director’s Personal Guarantee 

LHHB is required to procure the discharge of the joint and several personal 

guarantee executed by Mr. Yeo Soo Sia @ Yeo Soo Seng, the director 

representing the Vendors on the Board of Directors of Budiman, in favour of 

OCBC to secure facilities extended by OCBC to Budiman, upon the completion of 

the First Proposed Acquisition of Budiman Shares. The facilities extended by 

OCBC to Budiman comprise an overdraft facility of RM10 million and a term loan 

of RM55 million. The facilities are currently secured by a charge over the 

Budiman Land, a joint and several directors’ guarantee and a corporate guarantee 

by LHHB. 

(c) 

Mode of Satisfaction of Purchase Consideration 

The purchase consideration shall be wholly satisfied by the payment of cash on 

completion as no deposit is payable. The First Proposed Acquisition of Budiman 

Shares is expected to be completed by the third quarter of the year 2001. 

4.2 Salient Terms of the Proposed Disposal of Atlasprise Shares 

(a) 

Shares Disposed Of Free from Encumbrances 

The 465,000 Shares in Atlasprise to be disposed of by LHHB to Bukit Gambir 

pursuant to the Proposed Disposal of Atlasprise Shares will be disposed of free 

from all encumbrances and with all rights attaching thereto or accruing thereon as 

at and from the date of the Sale and Purchase Agreement, including all rights to 

dividends and other distributions declared, made and paid thereafter. 

LHHB currently has a 55.0% equity interest in Atlasprise comprising 825,000 

Shares. The Proposed Disposal of Atlasprise Shares will reduce LHHB’s equity 

interest in Atlasprise to 24.0% comprising 360,000 Shares. Atlasprise will 

therefore cease to be a subsidiary of LHHB upon completion of the Proposed 

Disposal of Atlasprise Shares, and will instead become an associate company of 

LHHB. 

Bukit Gambir currently has a 20.0% equity interest in Atlasprise comprising 

300,000 Shares. Upon completion of the Proposed Disposal of Atlasprise Shares, 

Bukit Gambir will have a 51.0% equity interest in Atlasprise comprising 765,000 

Shares. Atlasprise will therefore become a subsidiary of Bukit Gambir. 

10

(b) 

Bukit Gambir to Discharge LHHB’s Corporate Guarantee 

Bukit Gambir is required to procure the discharge of all corporate guarantees 

provided by LHHB for the benefit of Atlasprise. As at 15 May 2001, the 

corporate guarantees provided by LHHB for the benefit of Atlasprise amounted to 

RM10 million. 

(c) 

Advances Given by LHHB to Atlasprise 

Bukit Gambir will not be required to pay LHHB for 31/55 (based on the 

percentage of equity interest in Atlasprise to be disposed of by LHHB to Bukit 

Gambir) of the advances given by LHHB to Atlasprise (“LHHB Advances”) 

upon completion of the Proposed Disposal of Atlasprise Shares. As at 15 May 

2001, the LHHB Advances amounted to RM7.423 million. However, if upon the 

expiry of two (2) years from the date on which Bukit Gambir is registered as the 

owner of the Atlasprise Shares which are the subject of the Proposed Disposal of 

Atlasprise Shares, the amounts of shareholders’ advances made by LHHB and 

Bukit Gambir respectively to Atlasprise are not proportionate to their respective 

shareholdings in Atlasprise, Bukit Gambir will reimburse LHHB such excess 

shareholder’s advances on a Ringgit for Ringgit basis so that the resultant 

shareholders’ advances are proportionate to their respective shareholdings in 

Atlasprise. 

The reason why the parties had agreed that Bukit Gambir will not be required to 

pay LHHB for 31/55 of the LHHB Advances upon completion of the Proposed 

Disposal of Atlasprise Shares is because as a result of the loss arising from the 

revaluation of the Atlasprise Land, the adjusted NTA value of Atlasprise is 

negative and the consideration for the Proposed Disposal of Atlasprise Shares is at 

a premium to the adjusted NTA value of Atlasprise. 

(d) 

Mode of Satisfaction of Disposal Consideration 

The disposal consideration shall be wholly satisfied by the payment of cash on 

completion as no deposit is payable. The Proposed Disposal of Atlasprise Shares 

will not generate any gain or loss to LHHB as the consideration of RM465,000 is 

equivalent to the net book value of the 465,000 Atlasprise Shares which are the 

subject of the Proposed Disposal of Atlasprise Shares. 

4.3 Salient Terms of the Proposed Disposal of 73.845-Acre Land 

(a) 

OCBC’s Consent and Agreement 

The parties will procure OCBC, as the existing chargee of the Budiman Land, to:- 

(i) 

Consent to the Proposed Disposal of 73.845-Acre Land; 

(ii) Accept RM7.054 million as the agreed redemption sum for the 73.845- 

Acre Land; and 

(iii) 

Grant to Jayaplus a loan of not less than RM7.054 million (“Jayaplus 

Loan”) towards completion of the Proposed Disposal of 73.845-Acre 

Land and settlement of the agreed redemption sum. 

11

(b) 

Budiman’s Undertakings 

Budiman agrees to undertake with OCBC to:- 

(i) 

(ii) 

Procure the Land Registry of Johor to release and deliver to OCBC all the 

separate individual titles to the subdivided lots comprised in the 73.845- 

Acre Land once such titles have been issued; and 

Execute any third party charges or such other security documents as may 

be required by OCBC for securing the Jayaplus Loan subject to:- 

(A) 

(B) 

OCBC agreeing that Budiman will not be held liable for the 

repayment of the Jayaplus Loan; and 

Jayaplus indemnifying Budiman against any loss arising from 

such security arrangement. 

(c) 

Premium and Surveyors’ Fees 

The premium and surveyors’ fees in respect of the 73.845-Acre Land, which are 

estimated to amount to RM0.686 million, will be borne by Jayaplus. 

(d) 

Power of Attorney 

As it is the intention of Jayaplus not to have the subdivided lots comprised in the 

73.845-Acre Land transferred to Jayaplus after the separate individual titles 

thereto have been issued, and to develop, sell and transfer such subdivided lots 

without Jayaplus being first registered as the proprietor thereof, Budiman shall 

upon completion of the Proposed Disposal of 73.845-Acre Land, grant to Jayaplus 

an irrevocable power of attorney empowering Jayaplus to do all acts in relation to 

the 73.845-Acre Land as fully and effectually in all respects as Budiman itself 

could do. 

(e) 


The disposal consideration shall be satisfied by Jayaplus in the following manner 

on completion:- 

(i) 

(ii) 

(iii) 

Setting off all the shareholders’ advances granted by Jayaplus to Budiman 

as at the completion date of the Proposed Disposal of 73.845-Acre Land. 

As at 15 May 2001, the shareholders’ advances granted by Jayaplus to 

Budiman amounted to RM5.292 million; 

The Jayaplus Loan; and 

The balance in cash. 

12


(a) 


The parties will procure OCBC, as the existing chargee of the Budiman Land, 

to:- 

(i) 


(ii) Accept RM12.646 million as the agreed redemption sum for the 132.395- 

Acre Land; and 

(iii) 

Grant to Bukit Gambir a loan of not less than RM12.646 million (“Bukit 

Gambir Loan 1”) towards completion of the Proposed Disposal of 

132.395-Acre Land and settlement of the agreed redemption sum. 

(b) 



(i) 

(ii) 

Procure the Land Registry of Johor to release and deliver to OCBC all the 

separate individual titles to the subdivided lots comprised in the 132.395- 

Acre Land once such titles have been issued; and 


be required by OCBC for securing the Bukit Gambir Loan 1 subject to:- 

(A) 

(B) 


repayment of the Bukit Gambir Loan 1; and 

Bukit Gambir indemnifying Budiman against any loss arising 

from such security arrangement. 

(c) 



estimated to amount to RM0.790 million, will be borne by Bukit Gambir. 

(d) 


As it is the intention of Bukit Gambir not to have the subdivided lots comprised in 

the 132.395-Acre Land transferred to Bukit Gambir after the separate individual 

titles thereto have been issued, and to develop, sell and transfer such subdivided 

lots without Bukit Gambir being first registered as the proprietor thereof, Budiman 

shall upon completion of the Proposed Disposal of 132.395-Acre Land, grant to 

Bukit Gambir an irrevocable power of attorney empowering Bukit Gambir to do all 

acts in relation to the 132.395-Acre Land as fully and effectually in all respects as 

Budiman itself could do. 

(e) 


The disposal consideration shall be satisfied by Bukit Gambir in the following 

manner on completion:- 

(i) 

Setting off all the shareholders’ advances granted by Bukit Gambir to 

Budiman as at the completion date of the Proposed Disposal of 132.395- 

Acre Land. As at 15 May 2001, the shareholders’ advances granted by 

Bukit Gambir to Budiman amounted to RM9.783 million; 

13

(ii) 

The Bukit Gambir Loan 1; and 

(iii) 


4.5 Salient Terms of the Second Proposed Acquisition of Budiman Shares 

(a) 


The 1,300,000 Shares in Budiman to be acquired by LHHB pursuant to the Second 

Proposed Acquisition of Budiman Shares will be acquired free from all claims, 

charges, liens, pledges or any other encumbrances and with all rights and 

advantages attaching thereto or accruing thereon as at and from the date of the Sale 

and Purchase Agreement, including all rights to dividends and other distributions 

declared, made and paid thereafter. 

(b) 

LHHB to Settle Amalan’s Advances to Budiman 

As at 15 May 2001, Amalan’s advances to Budiman amounted to RM7.709 

million (“Amalan’s Advances”). LHHB will settle Amalan’s Advances. 

(c) 

Mode of Satisfaction of Purchase Consideration and Amalan’s Advances 

Both the purchase consideration for the Second Proposed Acquisition of Budiman 

Shares of RM3,926,000 (“Purchase Consideration”) and the settlement of 

Amalan’s Advances shall be satisfied by LHHB by way of set-off against the 

amount owing by Amalan to LHM. The sum of the Purchase Consideration and 

Amalan’s Advances shall hereinafter be referred to as the . 

Amalan and LHM are controlled by common shareholders, being the Lau brothers, 

as set out in Sections 3.4, 3.5 and 4.8. The Second Proposed Acquisition of 

Budiman Shares is expected to be completed by the third quarter of the year 2001. 

To facilitate the settlement of the Purchase Consideration and Amalan’s Advances 

in the above-mentioned manner, Amalan, LHHB and LHM have executed a Set 

Off Document on 11 April 2001, wherein it is agreed that on the completion date 

of the Second Proposed Acquisition of Budiman Shares, the parties will set off the 

following sums representing the Set-Off Amount:- 

(i) 

(ii) 

(iii) 

LHHB will set off the Set-Off Amount against LHM and the outstanding 

loans from LHHB to LHM shall be correspondingly reduced by the Set- 

Off Amount. As at 31 March 2001, the outstanding loans from LHHB to 

LHM amounted to RM79.266 million. The balance after setting off the 

Set-Off Amount on completion and taking into account real property gains 

tax payable by Amalan, is expected to be approximately RM67.916 

million; 

LHM will set off the Set-Off Amount against Amalan and the outstanding 

loans from LHM to Amalan shall be correspondingly reduced by the Set- 

Off Amount. As at 15 May 2001, the outstanding loans from LHM to 

Amalan amounted to RM21.707 million. The balance after setting off the 

Set-Off Amount on completion and taking into account real property gains 

tax payable by Amalan, is expected to be approximately RM10.357 

million; and 

Thereafter, the Purchase Consideration and Amalan’s Advances shall be 

deemed to have been paid and fully settled by LHHB to Amalan. 

14


(a) 


The parties will procure OCBC, as the existing chargee of the Budiman Land, 

to:- 

(i) 

(ii) 

(iii) 


Accept RM10 million as the agreed redemption sum for the 119.82-Acre 

Land; and 

Grant to Bukit Gambir a loan of not less than RM10 million (“Bukit 

Gambir Loan 2”) towards completion of the Proposed Disposal of 

119.82-Acre Land and settlement of the agreed redemption sum. 

(b) 



(i) 

(ii) 

Procure the Land Registry of Johor to release and deliver to OCBC the 

block titles and master titles to the 119.82-Acre Land once such titles 

have been issued; and 


be required by OCBC for securing the Bukit Gambir Loan 2 subject to:- 

(A) 

(B) 


repayment of the Bukit Gambir Loan 2; and 

Bukit Gambir indemnifying Budiman against any loss arising 


(c) 



estimated to amount to RM0.738 million, will be borne by Bukit Gambir. 

(d) 


As it is the intention of Bukit Gambir not to have the subdivided lots comprised in 

the 119.82-Acre Land transferred to Bukit Gambir after the separate individual 

titles thereto have been issued, and to develop, sell and transfer such subdivided 

lots without Bukit Gambir being first registered as the proprietor thereof, Budiman 

shall upon completion of the Proposed Disposal of 119.82-Acre Land, grant to 

Bukit Gambir an irrevocable power of attorney empowering Bukit Gambir to do all 

acts in relation to the 119.82-Acre Land as fully and effectually in all respects as 


(e) 


The disposal consideration shall be satisfied by Bukit Gambir in the following 

manner:- 

(i) 

The Bukit Gambir Loan 2 within three (3) months from the date on which 

the Sale and Purchase Agreement in respect of the Proposed Disposal of 

119.82-Acre Land becomes unconditional; and 

15

(ii) 

The balance of RM12,965,180.48 by the issuance of new Shares by 

Newco at the initial public offering price (“Consideration Shares”). The 

initial public offering price and the basis therefor and hence the number of 

Consideration Shares, will be determined after Newco has obtained the 

SC’s approval for its proposed listing on the KLSE. Budiman undertakes 

to sell 40% of the Consideration Shares to Bumiputra parties approved by 

the Ministry of International Trade & Industry. 

Newco expects to submit its application to the SC by July 2001. In the 

event that the proposed listing of Newco does not take place, the Proposed 

Disposal of 119.82-Acre Land will be aborted. 

(f) 

Rights Attaching to Consideration Shares 

The Consideration Shares shall rank pari passu in all respects with the other Shares 

of Newco and shall be similarly listed and quoted on the KLSE. 

4.7 Inter-Conditionality 

The First Proposed Acquisition of Budiman Shares, Proposed Disposal of Atlasprise 

Shares, Proposed Disposal of 73.845-Acre Land and Proposed Disposal of 132.395-Acre 

Land are inter-conditional with one another. 

The Second Proposed Acquisition of Budiman Shares is not inter-conditional with any of 

the other Proposals. 

The Proposed Disposal of 119.82-Acre Land is not inter-conditional with any of the other 

Proposals. 

4.8 Related-Party Transactions 


Shares, Proposed Disposal of 73.845-Acre Land, Proposed Disposal of 132.395-Acre Land 

and Proposed Disposal of 119.82-Acre Land are related-party transactions because Mr. 

Yeo Soo Sia @ Yeo Soo Seng is a director and substantial shareholder of Budiman, Bukit 

Gambir, Jayaplus and Pathalon, as well as a director of Atlasprise. 

The Second Proposed Acquisition of Budiman Shares is a related-party transaction for the 

following reasons:- 

(a) 

(b) 

(c) 

Datuk Lau Chong Wang is the Chairman and Managing Director of LHHB and a 

substantial shareholder of LHHB through his interest in LHM. He is a director 

and substantial shareholder of LHM. He is also a substantial shareholder of 

Amalan, and a director and an indirect substantial shareholder of Budiman through 

his interest in LHHB; 

Dato Lau Eng Guang is an Executive Director of LHHB and a substantial 

shareholder of LHHB. He is a director and substantial shareholder of LHM. He is 

also a substantial shareholder of Amalan; 

Datuk Lau Tuang Nguang is an Executive Director of LHHB and a substantial 

shareholder of LHHB. He is a substantial shareholder of Amalan and a director of 

Budiman; 

16

(d) 

(e) 

(f) 

(g) 

(h) 

(i) 

Mr. Lau Bong Wong is a substantial shareholder of LHHB through his interest in 

LHM. He is a director and substantial shareholder of LHM. He is also a 

substantial shareholder of Amalan, and a director and an indirect substantial 

shareholder of Budiman through his interest in LHHB; 

Mr. Lau Chia Nguang is a director and substantial shareholder of LHM, and a 

substantial shareholder of Amalan; 

Datuk Lau Chir Nguan is a director and substantial shareholder of both LHM and 

Amalan; 

Mr. Lau Hai Nguan is a director and substantial shareholder of LHM, and a 

substantial shareholder of Amalan; 

Datuk Lau Chong Wang, Dato Lau Eng Guang, Datuk Lau Tuang Nguang, Mr. 

Lau Bong Wong, Mr. Lau Chia Nguang, Datuk Lau Chir Nguan, Mr. Lau Hai 

Nguan and Mr. Lau Chun Yuen (who is a director of LHHB) are brothers; and 

LHM is a substantial shareholder of LHHB and an indirect substantial shareholder 

of Budiman through its interest in LHHB. 

5. BASIS OF DETERMINING THE CONSIDERATION FOR THE PROPOSALS 

5.1 First and Second Proposed Acquisition of Budiman Shares 

The purchase consideration for each of the First and Second Proposed Acquisition of 

Budiman Shares of RM3,926,000 was arrived at on a willing-buyer willing-seller basis 

after taking into consideration the estimated NTA of Budiman as at 31 March 2001 of 

RM9.218 million after adjusting for the revaluation surplus of RM10.443 million arising 

from the revaluation of the Budiman Land, as well as the various land disposals. The 

adjusted estimated NTA is RM19.661 million. 20% of the adjusted estimated NTA 

therefore amounts to RM3.932 million. 

The adjusted estimated NTA of Budiman as at 31 March 2001 takes into account a 

valuation of the 73.845-Acre Land, 132.395-Acre Land and 119.82-Acre Land collectively 

carried out by Colliers Jordan Lee & Jaafar (JH) Sdn. Bhd., an independent firm of 

professional valuers, on 28 February 2001 using the comparison method, and checked by 

the residual method, pursuant to which the said firm determined the aggregate open market 

value of the said lands with the benefit of the Budiman Approval, to be RM62,500,000 or 

approximately RM4.40 per square foot. A copy of the valuer’s letter in relation to the said 

valuation is set out in Appendix 5. 

The purchase consideration represents a discount of RM0.006 million or 0.16% to the 

relevant proportion of the adjusted estimated NTA of Budiman as at 31 March 2001. 

The Vendors’ total cost of investment in the 1,300,000 Budiman Shares proposed to be 

acquired by LHHB pursuant to the First Proposed Acquisition of Budiman Shares, since the 

date of incorporation of Budiman, is RM1,300,000. 

Amalan’s cost of investment in the 1,300,000 Budiman Shares proposed to be acquired by 

LHHB pursuant to the Second Proposed Acquisition of Budiman Shares, since the date of 

incorporation of Budiman, is RM1,300,000. 

17

5.2 Proposed Disposal of Atlasprise Shares 

The disposal consideration for the Proposed Disposal of Atlasprise Shares of RM465,000 is 

based on the par value of the Shares concerned, and was arrived at on a willing-buyer 

willing-seller basis after taking into consideration the unaudited NTA of Atlasprise as at 30 

November 2000 of RM1.886 million and after adjusting for the loss on revaluation of 

RM3.660 million arising from the revaluation of the Atlasprise Land. The adjusted 

unaudited NTA is negative RM1.774 million. 31% of the adjusted unaudited NTA 

therefore amounts to negative RM0.550 million. 

The loss on revaluation was derived based on a valuation of the Atlasprise Land carried out 

by Colliers Jordan Lee & Jaafar (JH) Sdn. Bhd., an independent firm of professional 

valuers, on 28 February 2001 using the comparison method, pursuant to which the said firm 

determined the open market value of the Atlasprise Land with the benefit of the Atlasprise 

Approvals in Principle, to be RM17,000,000 or approximately RM1.70 per square foot. A 

copy of the valuer’s letter in relation to the said valuation is set out in Appendix 6. 

The disposal consideration represents a premium of RM1.015 million to the relevant 

proportion of the adjusted unaudited NTA of Atlasprise as at 30 November 2000. 

The total cost of investment to LHHB of the 465,000 Atlasprise Shares is RM465,000. 

LHHB made the investment on 22 May 1997. As at 15 May 2001, the net book value of 

the investment was RM465,000. The Proposed Disposal of Atlasprise Shares will therefore 

not generate any gain or loss to LHHB. 

5.3 Proposed Disposal of 73.845-Acre Land, Proposed Disposal of 132.395-Acre Land and 

Proposed Disposal of 119.82-Acre Land 

The respective disposal consideration for the Proposed Disposal of 73.845-Acre Land, 

Proposed Disposal of 132.395-Acre Land and Proposed Disposal of 119.82-Acre Land was 

arrived at on a willing-buyer willing-seller basis after taking into consideration their 

respective open market values with the benefit of the Budiman Approval. 



independent firm of professional valuers, on 28 February 2001 using the comparison 

method, and checked by the residual method, pursuant to which the said firm determined the 

aggregate open market value of the said lands with the benefit of the Budiman Approval, to 

be RM62,500,000 or approximately RM4.40 per square foot. A copy of the valuer’s letter 

in relation to the said valuation is set out in Appendix 5. Based on this valuation, the 

disposal consideration for each of the said lands was determined by apportioning the 

aggregate open market value of the said lands. 

Budiman had acquired the Budiman Land on 25 April 1997 for a consideration of 

RM117.591 million. The total estimated cost of investment to Budiman of the Budiman 

Land as at 31 March 2001 is RM153.470 million. On a proportionate basis, the total 

estimated cost of investment to Budiman of the 73.845-Acre Land, 132.395-Acre Land and 

119.82-Acre Land as at 31 March 2001 is RM58.512 million. 

The table below sets out the respective disposal consideration, open market value and 

estimated net book value of the 73.845-Acre Land, 132.395-Acre Land and 119.82-Acre 

Land, as well as the estimated gain to Budiman on the disposals. 

18

73.845-Acre 132.395-Acre 119.82-Acre 

Land 

Land 

Land 

RM RM RM 

Disposal consideration 14,153 25,375 22,965 

Open market value based on valuation by Colliers 

Jordan Lee & Jaafar (JH) Sdn. Bhd. dated 28 

February 2001 

14,155 25,378 22,967 

Estimated net book value as at 31 March 2001 13,252 23,758 21,502 

Estimated gain to Budiman on disposal 901 1,617 1,463 

6. RATIONALE FOR THE PROPOSALS 

The Proposed Disposal of Atlasprise Shares, Proposed Disposal of 73.845-Acre Land, Proposed 

Disposal of 132.395-Acre Land and Proposed Disposal of 119.82-Acre Land will raise gross 

proceeds of approximately RM46.068 million for the LHHB Group, excluding:- 

(a) 

(b) 

(c) 

The proceeds to be raised from the sale of the Consideration Shares arising from the 

Proposed Disposal of 119.82-Acre Land, which the Company is currently unable to 

determine as the initial public offering price of Newco Shares has yet to be determined; 

The expenses of the Proposals; and 

After deducting the purchase consideration for the First Proposed Acquisition of Budiman 

Shares. 

The breakdown of the proceeds is as follows:- 

Proposal 

Cash Proceeds 

(RM’000) 

Proposed Disposal of Atlasprise Shares 465 

Proposed Disposal of 73.845-Acre Land 14,153 



49,994 

Less: First Proposed Acquisition of Budiman Shares (3,926) 

46,068 

The disposal proceeds will improve the Group’s cash flow for the financial year ending 31 March 

2002 and allow the Group to reduce its bank borrowings which amounted to RM308.406 million as 

at 31 March 2001. The interest saving arising from the repayment of bank borrowings is expected 

to be approximately RM2.465 million per annum assuming an average borrowing cost of 8.3% per 

annum (based on the actual interest rate currently charged by OCBC). At the same time, the First 

and Second Proposed Acquisition of Budiman Shares will enable LHHB to retain a significant stake 

of 90.1% in Budiman and hence the remainder of the Budiman Land amounting to 529.15 acres. 

19

7. SOURCES OF FUNDS AND UTILISATION OF PROCEEDS 

7.1 Sources of Funds 

As shown in Section 6 above, the purchase consideration for the First Proposed Acquisition 

of Budiman Shares will be set off against the proceeds from the Proposed Disposal of 

Atlasprise Shares, Proposed Disposal of 73.845-Acre Land, Proposed Disposal of 132.395- 

Acre Land and Proposed Disposal of 119.82-Acre Land. As stated in Section 4.5(c) above, 

the Second Proposed Acquisition of Budiman Shares will be funded by LHHB by way of 

set-off against the amount owing by Amalan to LHM. 

7.2 Utilisation of Proceeds 

Utilisation 

Cash Proceeds 

(RM’000) 

Setting off shareholders’ advances granted by Jayaplus and Bukit Gambir to Budiman * 15,075 

Repayment of LHHB Group’s bank borrowings # 29,700 

Working capital 943 

Expenses of the Proposals 350 

Total 46,068 

The proceeds from the Proposals as stated in Section 6 above will be utilised in the 

following manner:- 

Notes:- 

* Based on the total estimated shareholders’ advances on completion of the Proposed Disposal 

of 73.845-Acre Land and Proposed Disposal of 132.395-Acre Land, as stated in Sections 

4.3(e)(i) and 4.4(e)(i) above. 

# As stated in Sections 4.3(e)(ii) and 4.4(e)(ii) above. 

8. EFFECTS OF THE PROPOSALS 

8.1 Share Capital 

The Proposals will not have any effect on the share capital of LHHB. 

8.2 Substantial Shareholders 

The Proposals will not have any effect on the substantial shareholders of LHHB. 

8.3 Earnings 

The Proposals are expected to be completed in the financial year ending 31 March 2002, in 

the third quarter of the calendar year 2001. On completion of the Proposals, LHHB is 

expected to realise an estimated gain of approximately RM3.631 million at the LHHB 

Group level. This will translate into an increase of approximately 1.55 sen in LHHB’s 

consolidated net EPS for the financial year ending 31 March 2002. 

20

8.4 NTA and Gearing 

Based on the audited consolidated accounts of LHHB as at 31 March 2000 and the 

estimated accounts of Budiman and Atlasprise as at 30 September 2001, the pro-forma 

effects of the Proposals on the NTA and gearing ratio of LHHB are shown in the table 

below. 

As at 

(A) (B) (C) 

31.03.2000 

RM’000 RM’000 RM’000 RM’000 

Share Capital 151,568 151,568 151,568 151,568 

Share Premium 23,534 23,534 23,534 23,534 

Revaluation reserves - 3,970 3,970 2,507 

Foreign Exchange Fluctuation Reserve (9,894) (9,894) (9,894) (9,894) 

Unappropriated Profit 52,688 * 50,766 # 50,716 @ 51,770 

Shareholders’ Funds 217,896 219,945 219,895 219,485 

Less: Intangibles (58,262) (58,262) (58,262) (58,262) 

NTA 159,634 161,683 161,633 161,223 

NTA per Share (RM) 1.05 1.07 1.07 1.06 

Total Borrowings 329,156 299,296 299,296 289,296 

Gearing Ratio (times) 1.51 1.36 1.36 1.32 

Notes:- 

(A) 

(B) 

(C) 

After all the Proposals except the Second Proposed Acquisition of Budiman Shares and the 

Proposed Disposal of 119.82-Acre Land 

After (A) and the Second Proposed Acquisition of Budiman Shares 

After (B) and the Proposed Disposal of 119.82-Acre Land 

* Assuming a consolidated gain on disposal of RM2.218 million net of expenses relating to all 

the Proposals except the Second Proposed Acquisition of Budiman Shares. Apart from the 

said gain, the unappropriated profit of RM50.766 million takes into account the relevant 

portions of the estimated profits of Budiman and Atlasprise for the six (6) months ending 30 

September 2001, as well as the interest expense arising from the existing bank borrowings for 

the said period of six (6) months. 

# Assuming expenses of RM50,000 relating to the Second Proposed Acquisition of Budiman 

Shares 

@ 

Assuming a consolidated gain on disposal after tax of RM1.053 million 

Apart from the proportionate share of Budiman’s liabilities attaching to the 40% equity 

interest to be acquired by LHHB pursuant to the First and Second Proposed Acquisition of 

Budiman Shares, no other liabilities will be assumed by LHHB arising from the Proposals. 

9. CONDITIONS PRECEDENT 

9.1 Inter-Conditional Proposals 



Land are inter-conditional and are subject to the following conditions precedent which have 

to be fulfilled within four (4) months from the date of the respective Sale and Purchase 

Agreements or such extended period as may be mutually agreed to by the parties:- 

21

(a) 

(b) 

(c) 

(d) 

The approval of the FIC; 

The approval of the shareholders of LHHB; 

The approval of the shareholders of Bukit Gambir, Jayaplus, Pathalon and 

Budiman; 

The approval of OCBC for:- 

(i) 

The Proposed Disposal of 73.845-Acre Land and Proposed Disposal of 

132.395-Acre Land; 

(ii) The fixing of the respective redemption sums in respect of the 73.845- 

Acre Land and 132.395-Acre Land; and 

(iii) The granting of the Jayaplus Loan and the Bukit Gambir Loan 1. 

The approval of the FIC was obtained on 25 April 2001 and was subject to the following 

conditions, amongst others:- 

(A) 

(B) 

(C) 

The approval of the shareholders of LHHB is to be obtained at an EGM wherein 

all interested parties are to abstain from voting; 

Competent independent advice is provided to the shareholders of LHHB and the 

appointment of the Independent Adviser is subject to the approval of the FIC; and 

The circular to the shareholders of LHHB shall contain the details of the relevant 

Proposals and the interested parties, and the circular is subject to clearance by the 

FIC. 

The FIC had approved the appointment of Arab-Malaysian as Independent Adviser to the 

shareholders of LHHB and cleared this Circular vide its letters dated 23 May 2001. 



Land will be completed simultaneously within three (3) months from the date of fulfillment 

of the last of the conditions precedent stated above. 

9.2 Second Proposed Acquisition of Budiman Shares 


the other Proposals and is subject to the following conditions precedent which have to be 

fulfilled within four (4) months from the date of the Sale and Purchase Agreement, being 11 

April 2001, or such extended period as may be mutually agreed to by the parties:- 

(a) 

(b) 

(c) 


The approval of the shareholders of LHHB; and 

The approval of the shareholders of Amalan. 

Completion of the Second Proposed Acquisition of Budiman Shares will take place within 

fourteen (14) days from the date of fulfillment of the last of the conditions precedent stated 

above. 

22

9.3 Proposed Disposal of 119.82-Acre Land 


Proposals and is subject to the following conditions precedent which have to be fulfilled 

within twelve (12) months from the date of the Sale and Purchase Agreement or such 

extended period as may be mutually agreed to by the parties:- 

(a) 

(b) 

(c) 

(d) 



The approval of the shareholders of Budiman; 


(i) 

(ii) 

(iii) 

The Proposed Disposal of 119.82-Acre Land; 

The fixing of the redemption sum in respect of the 119.82-Acre Land; and 

The granting of the Bukit Gambir Loan 2; and 

(e) 

The approval of the SC for the proposed listing of Newco and the proposed 

acquisition of the 119.82-Acre Land by Bukit Gambir. 

10. DIRECTORS’ AND SUBSTANTIAL SHAREHOLDERS’ INTERESTS 

As disclosed in Section 4.8 above, Mr. Yeo Soo Sia @ Yeo Soo Seng is a director and substantial 

shareholder of Budiman, Bukit Gambir, Jayaplus and Pathalon. He is also a director of Atlasprise. 

He is therefore deemed interested in the First Proposed Acquisition of Budiman Shares, Proposed 

Disposal of Atlasprise Shares, Proposed Disposal of 73.845-Acre Land, Proposed Disposal of 

132.395-Acre Land and Proposed Disposal of 119.82-Acre Land. As such, he has abstained and 

will continue to abstain from all deliberations and voting on the aforesaid Proposals at Board 

meetings of Budiman, Bukit Gambir, Jayaplus, Pathalon and Atlasprise. He will also abstain from 

voting in respect of his direct and indirect shareholdings, on the shareholders’ resolutions of 

Budiman, Bukit Gambir, Jayaplus and Pathalon pertaining to the aforesaid Proposals. 

In view of the interests of Datuk Lau Chong Wang, Dato Lau Eng Guang, Datuk Lau Tuang 

Nguang and Mr. Lau Chun Yuen in the Second Proposed Acquisition of Budiman Shares as 

disclosed in Section 4.8 above, they have abstained and will continue to abstain from all 

deliberations and voting on the Second Proposed Acquisition of Budiman Shares at Board meetings 

of LHHB. They will also abstain from voting at the forthcoming EGM of LHHB on the resolution 

pertaining to the Second Proposed Acquisition of Budiman Shares in respect of their direct and 

indirect shareholdings in LHHB. 

Mr. Lau Bong Wong and LHM will abstain from voting at the forthcoming EGM of LHHB on the 

resolution pertaining to the Second Proposed Acquisition of Budiman Shares in respect of their 

direct and indirect shareholdings in LHHB. 

Save as disclosed above, none of the directors or substantial shareholders of LHHB or persons 

deemed to be connected to them has any interest, direct or indirect, in the Proposals. 

23

11. INDEPENDENT ADVISER 

In view of the interests of the various parties as explained in Section 10 above, the Board has 

appointed Arab-Malaysian to act as Independent Adviser to the shareholders of LHHB on the 

Proposals. 

The Independent Advice Letter containing Arab-Malaysian’s evaluation and recommendation on the 

Proposals is set out in Part B of this Circular. You are advised to read both Part A and Part B of 

this Circular carefully before taking any action to vote on the resolutions pertaining to the Proposals 

to be tabled at the forthcoming EGM. 

12. DIRECTORS’ RECOMMENDATION 

Having considered the rationale for and effects of the Proposals, the Board is of the opinion that the 

Proposals are in the best interests of the LHHB Group and accordingly recommends (save for Datuk 

Lau Chong Wang, Dato Lau Eng Guang, Datuk Lau Tuang Nguang and Mr. Lau Chun Yuen who 

are interested in the Second Proposed Acquisition of Budiman Shares) that you vote in favour of the 

resolutions to be tabled at the forthcoming EGM 

13. EXTRAORDINARY GENERAL MEETING 

An EGM, notice of which is enclosed with this Circular, is to be held at Mutiara, Level 2, The 

Puteri Pan Pacific Hotel, Jalan Salim, 80730 Johor Bahru, Johor Darul Takzim on Wednesday, 27 

June 2001 at 11.00 a.m. for the purpose of considering and, if thought fit, passing the resolutions to 

give effect to the Proposals. 

If you are unable to attend and vote in person at the EGM, you are requested to complete, sign and 

return the enclosed Form of Proxy in accordance with the instructions therein contained, as soon as 

possible, so as to arrive at the Registered Office of the Company no later than 48 hours before the 

time fixed for the EGM or any adjournment thereof. The completion and return of the Form of 

Proxy will not preclude you from attending and voting in person at the EGM should you 

subsequently decide to do so. 

14. FURTHER INFORMATION 

Shareholders are requested to refer to the Appendices for further information. 

Yours faithfully, 

For and on behalf of the Board 

LIM MENG BIN 

Director 

24

PART B 

INDEPENDENT ADVICE LETTER TO THE SHAREHOLDERS OF LHHB 

25

Registered Address: 22nd Floor, Bangunan Arab-Malaysian, Jalan Raja Chulan, 50200 Kuala Lumpur, Malaysia. 

Postal Address: P. O. Box 10233, 50708 Kuala Lumpur, Malaysia. 

Tel: 03-2382633, 2382644, 2382655 Fax: 03-2382842 Telex: MA 31167 & 31169 ABMAL 

Arab-Malaysian Banking Group Website: http://ambg.com.my • http://www.mol-usa.com/ambg/ambg.html 

12 June 2001 

To: 

The Shareholders of Leong Hup Holdings Berhad 

Dear Sir/Madam, 

I. PROPOSED ACQUISITION BY LEONG HUP HOLDINGS BERHAD (“LHHB”) OF AN 

ADDITIONAL 20% EQUITY INTEREST IN PANGKAL BUDIMAN SDN. BHD. 

(“BUDIMAN”) COMPRISING 1,300,000 ORDINARY SHARES OF RM1.00 EACH 

FROM BUKIT GAMBIR COMPANY SDN. BHD. (“BUKIT GAMBIR”), JAYAPLUS 

BAKTI SDN. BHD. (“JAYAPLUS”) AND PATHALON INDUSTRIES SDN. BHD. FOR A 

CASH CONSIDERATION OF RM3,926,000 

II. 

III. 

IV. 

PROPOSED DISPOSAL BY LHHB OF 31% EQUITY INTEREST IN ATLASPRISE SDN. 

BHD. COMPRISING 465,000 ORDINARY SHARES OF RM1.00 EACH TO BUKIT 

GAMBIR FOR A CASH CONSIDERATION OF RM465,000 


MUKIM OF PULAI, DISTRICT OF JOHOR BAHRU, STATE OF JOHOR TO 

JAYAPLUS FOR A CONSIDERATION OF RM14,153,428.08 TO BE SATISFIED BY 

THE SETTING OFF OF ALL THE SHAREHOLDERS’ ADVANCES GRANTED BY 

JAYAPLUS TO BUDIMAN AND THE BALANCE IN CASH 



GAMBIR FOR A CONSIDERATION OF RM25,375,355.28 TO BE SATISFIED BY THE 

SETTING OFF OF ALL THE SHAREHOLDERS’ ADVANCES GRANTED BY BUKIT 

GAMBIR TO BUDIMAN AND THE BALANCE IN CASH 

V. PROPOSED ACQUISITION BY LHHB OF AN ADDITIONAL 20% EQUITY INTEREST 

IN BUDIMAN COMPRISING 1,300,000 ORDINARY SHARES OF RM1.00 EACH FROM 

AMALAN TEPAT SDN. BHD. (“AMALAN”) FOR A CONSIDERATION OF 

RM3,926,000 TO BE SATISFIED BY WAY OF SET-OFF AGAINST THE AMOUNT 

OWING BY AMALAN TO LEONG HUP MANAGEMENT SDN. BHD. 

Branch Offices : JOHOR BAHRU: Tel: 07-3348766 Fax: 07-3348799 • KOTA KINABALU: Tel: 088-221728 Fax: 088-221050 • KUCHING: Tel: 082- 

244791 Fax: 082-414944 • PULAU PINANG: Tel: 04-2261818 Fax: 04-2297634 • 

26

VI. 



GAMBIR FOR A CONSIDERATION OF RM22,965,180.48 TO BE SATISFIED BY RM10 

MILLION CASH AND BY THE ISSUANCE OF NEW ORDINARY SHARES OF RM1.00 

EACH WORTH RM12,965,180.48 AT THE INITIAL PUBLIC OFFERING PRICE BY 

THE PROPOSED NEW HOLDING COMPANY OF BUKIT GAMBIR WHICH IS IN THE 

COURSE OF PREPARING AN APPLICATION TO THE SECURITIES COMMISSION 


1. INTRODUCTION 

On 19 March 2001, your Board had made an announcement to the KLSE that LHHB and its 

subsidiary Budiman had on 19 March 2001 entered into the following agreements respectively:- 

(a) 

A conditional Sale and Purchase Agreement for the proposed acquisition by LHHB from 

Bukit Gambir, Jayaplus and Pathalon (collectively “Vendors”) of an additional 20% 

equity interest in Budiman comprising 1,300,000 ordinary shares of RM1.00 each 

(“Shares”) for a total cash consideration of RM3,926,000 (“First Proposed Acquisition 

of Budiman Shares”). 

LHHB currently has a 50.1% equity interest in Budiman comprising 3,256,500 Shares. 

The First Proposed Acquisition of Budiman Shares will increase LHHB’s equity interest in 

Budiman to 70.1% comprising 4,556,500 Shares; 

(b) 

A conditional Sale and Purchase Agreement for the proposed disposal by LHHB to Bukit 

Gambir of 31% equity interest in Atlasprise comprising 465,000 Shares for a total cash 

consideration of RM465,000 (“Proposed Disposal of Atlasprise Shares”). 

LHHB currently has a 55.0% equity interest in Atlasprise comprising 825,000 Shares. The 

Proposed Disposal of Atlasprise Shares will reduce LHHB’s equity interest in Atlasprise to 

24.0% comprising 360,000 Shares. Atlasprise will therefore cease to be a subsidiary of 

LHHB upon completion of the Proposed Disposal of Atlasprise Shares, and will instead 


Bukit Gambir currently has a 20.0% equity interest in Atlasprise comprising 300,000 

Shares. Upon completion of the Proposed Disposal of Atlasprise Shares, Bukit Gambir 

will have a 51.0% equity interest in Atlasprise comprising 765,000 Shares. Atlasprise will 

therefore become a subsidiary of Bukit Gambir. 

(c) 

(d) 

A conditional Sale and Purchase Agreement for the proposed disposal by Budiman to 

Jayaplus of 73.845 acres of freehold land (“73.845-Acre Land”) as comprised in the two 

(2) pieces of land held under H.S.(D) 235359, P.T.D. 71014 and H.S.(D) 235361, P.T.D. 

71016 in Mukim of Pulai, District of Johor Bahru, State of Johor (collectively “Budiman 

Land”), for a total consideration of RM14,153,428.08 to be satisfied by the setting off of 

all the shareholder’s advances granted by Jayaplus to Budiman as at the completion date of 

the Sale and Purchase Agreement, the Jayaplus Loan and the balance in cash (“Proposed 

Disposal of 73.845-Acre Land”); 


Gambir of 132.395 acres of freehold land as comprised in the Budiman Land (“132.395- 

Acre Land”), for a total consideration of RM25,375,355.28 to be satisfied by the setting 

off of all the shareholder’s advances granted by Bukit Gambir to Budiman as at the 

completion date of the Sale and Purchase Agreement, the Bukit Gambir Loan 1 and the 

balance in cash (“Proposed Disposal of 132.395-Acre Land”); and 

27

(e) 


Gambir of 119.82 acres of freehold land as comprised in the Budiman Land (“119.82-Acre 

Land”), for a total consideration of RM22,965,180.48 to be satisfied by the Bukit Gambir 

Loan 2 and by the issuance of new Shares worth RM12,965,180.48 (“Consideration 

Shares”) by the proposed new holding company of Bukit Gambir (“Newco”) which is in 

the course of preparing an application to the Securities Commission (“SC”) for listing on 

the Kuala Lumpur Stock Exchange (“KLSE”) (“Proposed Disposal of 119.82-Acre 

. The Consideration Shares are to be issued by Newco to Budiman at the initial 

public offering price. 

On 11 April 2001, the Board had further announced that LHHB had, on 11 April 2001, entered into 

a conditional Sale and Purchase Agreement for the proposed acquisition by LHHB from Amalan of 

an additional 20% equity interest in Budiman comprising 1,300,000 Shares for a total consideration 

of RM3,926,000 to be satisfied by way of set-off against the amount owing by Amalan to LHM 

(“Second Proposed Acquisition of Budiman Shares”). The consideration is therefore an amount 

owing from LHHB to LHM, and will be set off against the amount owing from LHM to LHHB. 

Together with the First Proposed Acquisition of Budiman Shares, the Second Proposed Acquisition 

of Budiman Shares will increase LHHB’s equity interest in Budiman to 90.1% comprising 

5,856,500 Shares. 


Proposed Disposal of 73.845-Acre Land, Proposed Disposal of 132.395-Acre Land, Second 

Proposed Acquisition of Budiman Shares and Proposed Disposal of 119.82-Acre Land shall 

hereinafter be collectively referred to as the “Proposals”. 


Proposed Disposal of 73.845-Acre Land, Proposed Disposal of 132.395-Acre Land and Proposed 

Disposal of 119.82-Acre Land are related-party transactions because Mr. Yeo Soo Sia @ Yeo Soo 

Seng is a director and substantial shareholder of Budiman, Bukit Gambir, Jayaplus and Pathalon, as 

well as a director of Atlasprise. 

The Second Proposed Acquisition of Budiman Shares is a related-party transaction for the following 

reasons:- 

(a) 

(b) 

(c) 

(d) 

(e) 

(f) 

Datuk Lau Chong Wang is the Chairman and Managing Director of LHHB and a 

substantial shareholder of LHHB through his interest in LHM. He is a director and 

substantial shareholder of LHM. He is also a substantial shareholder of Amalan, and a 

director and an indirect substantial shareholder of Budiman through his interest in LHHB; 

Dato Lau Eng Guang is an Executive Director of LHHB and a substantial shareholder of 

LHHB. He is a director and substantial shareholder of LHM. He is also a substantial 

shareholder of Amalan; 

Datuk Lau Tuang Nguang is an Executive Director of LHHB and a substantial shareholder 

of LHHB. He is a substantial shareholder of Amalan and a director of Budiman; 

Mr. Lau Bong Wong is a substantial shareholder of LHHB through his interest in LHM. 

He is a director and substantial shareholder of LHM. He is also a substantial shareholder 

of Amalan, and a director and an indirect substantial shareholder of Budiman through his 

interest in LHHB; 

Mr. Lau Chia Nguang is a director and substantial shareholder of LHM, and a substantial 


Datuk Lau Chir Nguan is a director and substantial shareholder of both LHM and Amalan; 

28

(g) 

(h) 

(i) 

Mr. Lau Hai Nguan is a director and substantial shareholder of LHM, and a substantial 


Datuk Lau Chong Wang, Dato Lau Eng Guang, Datuk Lau Tuang Nguang, Mr. Lau Bong 

Wong, Mr. Lau Chia Nguang, Datuk Lau Chir Nguan, Mr. Lau Hai Nguan and Mr. Lau 

Chun Yuen (who is a director of LHHB) are brothers; and 

LHM is a substantial shareholder of LHHB and an indirect substantial shareholder of 

Budiman through its interest in LHHB. 

Accordingly, pursuant to the requirements of Section 10.08 of the KLSE Listing Requirements and 

Chapter 20 of the SC’s Policies and Guidelines on Special Requirements for Related-Party 

Transactions, your Board had appointed Arab-Malaysian Merchant Bank Berhad (“Arab- 

Malaysian”) as Independent Adviser to the shareholders of LHHB. 

Arab-Malaysian was not in any way involved in the negotiations on the terms and conditions of the 

Proposals and accordingly our evaluation of the Proposals will be based on information provided by 

LHHB and discussions with the management of LHHB. 

The purpose of this Independent Advice Letter is to provide the shareholders of LHHB with an 

independent evaluation of the Proposals and Arab-Malaysian’s recommendation in relation to the 

resolutions pertaining to the Proposals to be tabled at the forthcoming EGM. 

This Independent Advice Letter is prepared solely for the use of the shareholders of LHHB 

for the purpose of considering the merits of the Proposals and should not be used or relied 

upon by any other party. 

SHAREHOLDERS OF LHHB ARE ADVISED TO READ BOTH THIS INDEPENDENT 

ADVICE LETTER AND THE LETTER FROM THE BOARD AND TO CONSIDER 

CAREFULLY THE RECOMMENDATIONS CONTAINED IN BOTH LETTERS 

BEFORE VOTING ON THE RESOLUTIONS TO GIVE EFFECT TO THE PROPOSALS 

AT THE FORTHCOMING EGM OF THE COMPANY. 

2. LIMITATIONS TO THE EVALUATION OF THE PROPOSALS 

Arab-Malaysian was not involved in any negotiations on the terms and conditions of the Proposals 

and accordingly our evaluation of the Proposals is based on information provided by LHHB and 

discussions with the management of LHHB. In performing our evaluation, we have relied on the 

following sources of information:- 

(a) 

(b) 

(c) 

(d) 

Information contained in Part A of this Circular and the Appendices thereto; 

The Sale and Purchase Agreements dated 19 March 2001 in relation to the First Proposed 

Acquisition of Budiman Shares, Proposed Disposal of Atlasprise Shares, Proposed 

Disposal of 73.845-Acre Land, Proposed Disposal of 132.395-Acre Land and Proposed 

Disposal of 119.82-Acre Land; 

The Sale and Purchase Agreement and the Set Off Document, both dated 11 April 2001, in 

relation to the Second Proposed Acquisition of Budiman Shares; 

The valuation reports dated 28 February 2001 prepared by Colliers Jordan Lee & Jaafar 

(JH) Sdn. Bhd. in respect of the following properties:- 

(i) 

(ii) 

The 73.845-Acre Land, 132.395-Acre Land and 119.82-Acre Land collectively; 

and 

The Atlasprise Land; 

29

(e) 

(f) 

Other relevant information furnished to us by the management of LHHB; and 

Other publicly available information. 

We have not independently verified such information for its reasonableness, reliability, accuracy 

and/or completeness but have obtained confirmation from the Board that all material facts and 

information required for the purpose of our evaluation have been disclosed to us. The Board has 

also accepted responsibility for the accuracy of the information provided herein and confirmed that 

after making all reasonable enquiries and to the best of their knowledge and belief, there are no 

other facts the omission of which would make any information provided herein misleading. 

It is not within our terms of reference to express any opinion on the commercial merits of the 

Proposals and this remains the sole responsibility of the Board. We also wish to emphasise that our 

role as Independent Adviser does not extend to conducting any valuation in respect of Budiman, 

Atlasprise, the 73.845-Acre Land, 132.395-Acre Land or 119.82-Acre Land. Our appointment also 

does not require us to express an opinion on the future plans of LHHB or to consider the specific 

investment objectives, financial situation and particular needs of any individual shareholder or 

group of shareholders. In preparing this letter of advice, we have paid attention to those factors 

which we believe are of general importance to an assessment of the Proposals and therefore of 

general concern to the general body of shareholders, and our evaluation is rendered solely for the 

benefit of the shareholders of LHHB as a whole. 

We recommend that any individual shareholder or group of shareholders who may require advice in 

relation to the Proposals in the context of their individual objectives, financial situation and 

particular needs should consult their stockbroker, bank manager, solicitor, accountant or other 

professional adviser. We shall not be liable for any damage or loss of any kind sustained or 

suffered by any individual shareholder or group of shareholders in reliance on the opinion stated 

herein for any purpose whatsoever which is particular to such shareholder or group of shareholders. 

3. DETAILS OF THE PROPOSALS 

3.1 First Proposed Acquisition of Budiman Shares 

3.1.1 Information on Budiman 

Budiman was incorporated in Malaysia under the Companies Act, 1965 on 26 July 

1994 as a private limited company. The current principal activity of Budiman is 

oil palm plantation, whilst its proposed future principal activity is property 

development. The principal asset of Budiman is the Budiman Land. Budiman does 

not have any subsidiary or associate company. 

The present authorised share capital of Budiman is RM10,000,000 comprising 

10,000,000 Shares, of which 6,500,000 Shares have been issued and are fully 

paid-up. 

30

The shareholders and directors of Budiman and their respective shareholdings as at 

15 May 2001 are set out in the table below. 



Shareholders 

Bukit Gambir 780,000 12.0 - - 

Jayaplus 455,000 7.0 - - 

Pathalon 65,000 1.0 * 455,000 7.0 

LHHB 3,256,500 50.1 - - 

Amalan Tepat Sdn. Bhd. 1,300,000 20.0 - - 

Chee Kim Hoon 643,500 9.9 - - 

Maharani Properties Sdn. Bhd. - - * 455,000 7.0 

Kim Yin & Sons Holdings Sdn. Bhd. - - * 455,000 7.0 

Binaik Sdn. Bhd. - - * 455,000 7.0 

Tan Lian Choo - - * 455,000 7.0 


Hasrin bin Busno - - # 520,000 8.0 

Lee Geok Kim - - * 455,000 7.0 

Lee Choon Jin - - * 455,000 7.0 

Foo Yin Yin - - * 455,000 7.0 

Leong Hup Management Sdn. Bhd. - - @ 3,256,500 50.1 


Lau Bong Wong - - @ 3,256,500 50.1 

Amnah bte Ibrahim - - ^ 1,300,000 20.0 

Total 6,500,000 100.0 

Directors 


Lau Bong Wong - - @ 3,256,500 50.1 

Datuk Lau Tuang Nguang - - - - 

Datuk Haji Esa bin Ahmad - - - - 

Chee Kim Hoon 643,500 9.9 - - 


Notes:- 

* Deemed interest through Jayaplus. 

# Deemed interest through Jayaplus and Pathalon. 

@ Deemed interest through LHHB 

^ Deemed interest through Amalan Tepat Sdn. Bhd. 

For the financial year ended 31 March 2000, Budiman recorded a profit after 

taxation of RM0.556 million. Its audited NTA value as at 31 March 2000 was 

RM9.043 million. For the financial year ended 31 March 2001, Budiman recorded 

an unaudited profit after taxation of RM0.267 million. 

3.1.2 Salient Terms 

(a) 


The 1,300,000 Shares in Budiman to be acquired by LHHB pursuant to 

the First Proposed Acquisition of Budiman Shares will be acquired free 

from all encumbrances and with all rights attaching thereto or accruing 

thereon as at and from the date of the Sale and Purchase Agreement, 

including all rights to dividends and other distributions declared, made and 

paid thereafter. 

(b) 

LHHB to Discharge Director’s Personal Guarantee 

LHHB is required to procure the discharge of the joint and several 

personal guarantee executed by Mr. Yeo Soo Sia @ Yeo Soo Seng, the 

director representing the Vendors on the Board of Directors of Budiman, 

in favour of OCBC to secure facilities extended by OCBC to Budiman, 

31

upon the completion of the First Proposed Acquisition of Budiman Shares. 

The facilities extended by OCBC to Budiman comprise an overdraft 

facility of RM10 million and a term loan of RM55 million. The facilities 

are currently secured by a charge over the Budiman Land, a joint and 

several directors’ guarantee and a corporate guarantee by LHHB. 

(c) 

Mode of Satisfaction of Purchase Consideration 

The purchase consideration shall be wholly satisfied by the payment of 

cash on completion as no deposit is payable. The First Proposed 

Acquisition of Budiman Shares is expected to be completed by the third 

quarter of the year 2001. 

3.1.3 Basis of Determining the Purchase Consideration 

The purchase consideration for the First Proposed Acquisition of Budiman Shares 

of RM3,926,000 was arrived at on a willing-buyer willing-seller basis after taking 

into consideration the estimated NTA of Budiman as at 31 March 2001 of 

RM9.218 million after adjusting for the revaluation surplus of RM10.443 million 

arising from the revaluation of the Budiman Land, as well as the various land 

disposals. The adjusted estimated NTA is RM19.661 million. 20% of the adjusted 

estimated NTA therefore amounts to RM3.932 million. 

The adjusted estimated NTA of Budiman as at 31 March 2001 takes into account a 

valuation of the 73.845-Acre Land, 132.395-Acre Land and 119.82-Acre Land 

collectively carried out by Colliers Jordan Lee & Jaafar (JH) Sdn. Bhd., an 

independent firm of professional valuers, on 28 February 2001 using the 

comparison method, and checked by the residual method, pursuant to which the 

said firm determined the aggregate open market value of the said lands with the 

benefit of the Budiman Approval, to be RM62,500,000 or approximately RM4.40 

per square foot. A copy of the valuer’s letter in relation to the said valuation is set 

out in Appendix 5. 

The purchase consideration represents a discount of RM0.006 million or 0.16% to 

the relevant proportion of the adjusted estimated NTA of Budiman as at 31 March 

2001. 

The Vendors’ total cost of investment in the 1,300,000 Budiman Shares proposed 

to be acquired by LHHB pursuant to the First Proposed Acquisition of Budiman 

Shares, since the date of incorporation of Budiman, is RM1,300,000. 

3.2 Proposed Disposal of Atlasprise Shares 

3.2.1 Information on Atlasprise 

Atlasprise was incorporated in Malaysia under the Companies Act, 1965 on 24 

January 1997 as a private limited company. The current principal activity of 

Atlasprise is oil palm plantation, whilst its proposed future principal activity is 

property development. The principal assets of Atlasprise are as follows:- 

(a) 

Two (2) pieces of freehold land held under Grant No. 10427, Lot No. 

1158 and Certificate of Title 6386, Lot No. 1730 in Mukim of Pengerang, 

District of Kota Tinggi, State of Johor measuring in total approximately 

117.625 acres (“Industrial Land”). Atlasprise had obtained the approval 

in principle of the Johor State Authority on 12 November 1998 for an 

industrial development on the Industrial Land; and 

32

(b) 

Two (2) pieces of freehold land held under E.M.R. 494, Lot No. 375 and 

Certificate of Title 6387, Lot No. 1732 in Mukim of Pengerang, District 

of Kota Tinggi, State of Johor measuring in total approximately 112.125 

acres (“Agricultural Land”). Atlasprise had obtained the approval in 

principle of the Johor State Authority on 19 August 1999 for a leisure 

farm development on the Agricultural Land. 

The proposed development on the Industrial Land comprises a total of 62 detached 

and semi-detached industrial lots, whilst the proposed development on the 

Agricultural Land comprises 90 homestead lots. The respective proposed 

developments have yet to commence as the time of their commencement would 

depend on the conditions in the property market. 

The Industrial Land and the Agricultural Land shall hereinafter be collectively 

referred to as the “Atlasprise Land”, and the respective approvals in principle of 

the Johor State Authority mentioned above shall hereinafter be collectively referred 

to as the “Atlasprise Approvals in Principle”. 

A valuation of the Atlasprise Land was carried out by Colliers Jordan Lee & 

Jaafar (JH) Sdn. Bhd., an independent firm of professional valuers, on 28 February 

2001 using the comparison method, pursuant to which the said firm determined the 

open market value of the Atlasprise Land with the benefit of the Atlasprise 

Approvals in Principle, to be RM17,000,000 or approximately RM1.70 per square 

foot. As the unaudited net book value of the Atlasprise Land as at 30 November 

2000 (being the reference date used for arriving at the consideration for the 

Proposed Disposal of Atlasprise Shares) was RM20.660 million, the loss on 

revaluation amounted to RM3.660 million. The loss on revaluation will not be 

incorporated into the accounts of Atlasprise, as the sole purpose of the revaluation 

was to establish a market value for the Atlasprise Land and hence the adjusted 

NTA value of Atlasprise. The audited net book value of the Atlasprise Land as at 

31 March 2000 was RM19.659 million. 

The Atlasprise Land is currently charged to Arab-Malaysian Finance Berhad for 

securing the credit facilities granted to Atlasprise towards completion of the 

purchase of the Atlasprise Land. 

Atlasprise does not have any subsidiary or associate company. 

The present authorised share capital of Atlasprise is RM5,000,000 comprising 

5,000,000 Shares, of which 1,500,000 Shares have been issued and are fully paidup. 

33

The shareholders and directors of Atlasprise and their respective shareholdings as 

at 15 May 2001 are set out in the table below. 



Shareholders 

LHHB 825,000 55.0 - - 

Bukit Gambir 300,000 20.0 - - 



Leong Hup Management Sdn. Bhd. - - * 825,000 55.0 


Lau Bong Wong - - * 825,000 55.0 

Total 1,500,000 100.0 

Directors 




Yeo Soo Sia @ Yeo Soo Seng - - - - 

Note:- 

* Deemed interest through LHHB. 

For the financial year ended 31 March 2000, Atlasprise recorded a profit after 

taxation of RM0.084 million. Its audited NTA value as at 31 March 2000 was 

RM1.847 million. For the financial year ended 31 March 2001, Atlasprise 

recorded an unaudited profit after taxation of RM0.072 million. 


(a) 

Shares Disposed Of Free from Encumbrances 

The 465,000 Shares in Atlasprise to be disposed of by LHHB to Bukit 

Gambir pursuant to the Proposed Disposal of Atlasprise Shares will be 

disposed of free from all encumbrances and with all rights attaching 

thereto or accruing thereon as at and from the date of the Sale and 

Purchase Agreement, including all rights to dividends and other 

distributions declared, made and paid thereafter. 

LHHB currently has a 55.0% equity interest in Atlasprise comprising 

825,000 Shares. The Proposed Disposal of Atlasprise Shares will reduce 

LHHB’s equity interest in Atlasprise to 24.0% comprising 360,000 

Shares. Atlasprise will therefore cease to be a subsidiary of LHHB upon 

completion of the Proposed Disposal of Atlasprise Shares, and will instead 


Bukit Gambir currently has a 20.0% equity interest in Atlasprise 

comprising 300,000 Shares. Upon completion of the Proposed Disposal of 

Atlasprise Shares, Bukit Gambir will have a 51.0% equity interest in 

Atlasprise comprising 765,000 Shares. Atlasprise will therefore become a 

subsidiary of Bukit Gambir. 

34

(b) 

Bukit Gambir to Discharge LHHB’s Corporate Guarantee 

Bukit Gambir is required to procure the discharge of all corporate 

guarantees provided by LHHB for the benefit of Atlasprise. As at 15 May 

2001, the corporate guarantees provided by LHHB for the benefit of 

Atlasprise amounted to RM10 million. 

(c) 

Advances Given by LHHB to Atlasprise 

Bukit Gambir will not be required to pay LHHB for 31/55 (based on the 

percentage of equity interest in Atlasprise to be disposed of by LHHB to 

Bukit Gambir) of the advances given by LHHB to Atlasprise (“LHHB 

Advances”) upon completion of the Proposed Disposal of Atlasprise 

Shares. As at 15 May 2001, the LHHB Advances amounted to RM7.423 

million. However, if upon the expiry of two (2) years from the date on 

which Bukit Gambir is registered as the owner of the Atlasprise Shares 

which are the subject of the Proposed Disposal of Atlasprise Shares, the 

amounts of shareholders’ advances made by LHHB and Bukit Gambir 

respectively to Atlasprise are not proportionate to their respective 

shareholdings in Atlasprise, Bukit Gambir will reimburse LHHB such 

excess shareholder’s advances on a Ringgit for Ringgit basis so that the 

resultant shareholders’ advances are proportionate to their respective 

shareholdings in Atlasprise. 

The reason why the parties had agreed that Bukit Gambir will not be 

required to pay LHHB for 31/55 of the LHHB Advances upon completion 

of the Proposed Disposal of Atlasprise Shares is because as a result of the 

loss arising from the revaluation of the Atlasprise Land, the adjusted NTA 

value of Atlasprise is negative and the consideration for the Proposed 

Disposal of Atlasprise Shares is at a premium to the adjusted NTA value 

of Atlasprise. 

(d) 


The disposal consideration shall be wholly satisfied by the payment of 

cash on completion as no deposit is payable. The Proposed Disposal of 

Atlasprise Shares will not generate any gain or loss to LHHB as the 

consideration of RM465,000 is equivalent to the net book value of the 

465,000 Atlasprise Shares which are the subject of the Proposed Disposal 

of Atlasprise Shares. 

3.2.3 Basis of Determining the Disposal Consideration 

The disposal consideration for the Proposed Disposal of Atlasprise Shares of 

RM465,000 is based on the par value of the Shares concerned, and was arrived at 

on a willing-buyer willing-seller basis after taking into consideration the unaudited 

NTA of Atlasprise as at 30 November 2000 of RM1.886 million and after 

adjusting for the loss on revaluation of RM3.660 million arising from the 

revaluation of the Atlasprise Land. The adjusted unaudited NTA is negative 

RM1.774 million. 31% of the adjusted unaudited NTA therefore amounts to 

negative RM0.550 million. 

The loss on revaluation was derived based on a valuation of the Atlasprise Land 

carried out by Colliers Jordan Lee & Jaafar (JH) Sdn. Bhd., an independent firm 

of professional valuers, on 28 February 2001 using the comparison method, 

pursuant to which the said firm determined the open market value of the 

Atlasprise Land with the benefit of the Atlasprise Approvals in Principle, to be 

35

RM17,000,000 or approximately RM1.70 per square foot. A copy of the valuer’s 

letter in relation to the said valuation is set out in Appendix 6. 

The disposal consideration represents a premium of RM1.015 million to the 

relevant proportion of the adjusted unaudited NTA of Atlasprise as at 30 

November 2000. 

The total cost of investment to LHHB of the 465,000 Atlasprise Shares is 

RM465,000. LHHB made the investment on 22 May 1997. As at 15 May 2001, 

the net book value of the investment was RM465,000. The Proposed Disposal of 

Atlasprise Shares will therefore not generate any gain or loss to LHHB. 


3.3.1 Information on 73.845-Acre Land 

The 73.845-Acre Land forms part of the Budiman Land. The Budiman Land 

comprises two (2) pieces of freehold agricultural land held under H.S.(D) 235359, 

P.T.D. 71014 and H.S.(D) 235361, P.T.D. 71016 in Mukim of Pulai, District of 

Johor Bahru, State of Johor measuring in total approximately 855.21 acres. 

Budiman had obtained the final approval of the Johor State Authority on 22 

October 1999 for the alteration of the category of land use of the Budiman Land 

and the subdivision thereof into individual lots for the purpose of a mixed 

development (“Budiman Approval”). The proposed development on the 

Budiman Land comprises a total of 11,132 units of development comprising terrace 

houses, semi-detached houses, detached houses, apartments, flats and shops. The 

proposed development has yet to commence as the time of commencement would 

depend on the conditions in the property market. The balance of the Budiman Land 

after the Proposed Disposal of 73.845-Acre Land, Proposed Disposal of 132.395- 

Acre Land and Proposed Disposal of 119.82-Acre Land would be 529.15 acres. 

The Budiman Land is currently charged to OCBC Bank (Malaysia) Berhad 

(“OCBC”) for securing the credit facilities granted to Budiman towards 

completion of the purchase of the Budiman Land. 


(a) 


The parties will procure OCBC, as the existing chargee of the Budiman 

Land, to:- 

(i) 

(ii) 

(iii) 


Accept RM7.054 million as the agreed redemption sum for the 

73.845-Acre Land; and 

Grant to Jayaplus a loan of not less than RM7.054 million 

(“Jayaplus Loan”) towards completion of the Proposed Disposal 

of 73.845-Acre Land and settlement of the agreed redemption 

sum. 

36

(b) 



(i) 

(ii) 

Procure the Land Registry of Johor to release and deliver to 

OCBC all the separate individual titles to the subdivided lots 

comprised in the 73.845-Acre Land once such titles have been 

issued; and 

Execute any third party charges or such other security documents 

as may be required by OCBC for securing the Jayaplus Loan 

subject to:- 

(A) 

(B) 

OCBC agreeing that Budiman will not be held liable for 

the repayment of the Jayaplus Loan; and 

Jayaplus indemnifying Budiman against any loss arising 


(c) 


The premium and surveyors’ fees in respect of the 73.845-Acre Land, 

which are estimated to amount to RM0.686 million, will be borne by 

Jayaplus. 

(d) 


As it is the intention of Jayaplus not to have the subdivided lots comprised 

in the 73.845-Acre Land transferred to Jayaplus after the separate 

individual titles thereto have been issued, and to develop, sell and transfer 

such subdivided lots without Jayaplus being first registered as the 

proprietor thereof, Budiman shall upon completion of the Proposed 

Disposal of 73.845-Acre Land, grant to Jayaplus an irrevocable power of 

attorney empowering Jayaplus to do all acts in relation to the 73.845-Acre 

Land as fully and effectually in all respects as Budiman itself could do. 

(e) 


The disposal consideration shall be satisfied by Jayaplus in the following 

manner on completion:- 

(i) 

(ii) 

(iii) 

Setting off all the shareholders’ advances granted by Jayaplus to 

Budiman as at the completion date of the Proposed Disposal of 

73.845-Acre Land. As at 15 May 2001, the shareholders’ 

advances granted by Jayaplus to Budiman amounted to RM5.292 

million; 

The Jayaplus Loan; and 


37


The respective disposal consideration for the Proposed Disposal of 73.845-Acre 

Land, Proposed Disposal of 132.395-Acre Land and Proposed Disposal of 119.82- 

Acre Land was arrived at on a willing-buyer willing-seller basis after taking into 

consideration their respective open market values with the benefit of the Budiman 

Approval. 



independent firm of professional valuers, on 28 February 2001 using the 

comparison method, and checked by the residual method, pursuant to which the 

said firm determined the aggregate open market value of the said lands with the 

benefit of the Budiman Approval, to be RM62,500,000 or approximately RM4.40 

per square foot. A copy of the valuer’s letter in relation to the said valuation is set 

out in Appendix 5. Based on this valuation, the disposal consideration for each of 

the said lands was determined by apportioning the aggregate open market value of 

the said lands. 

Budiman had acquired the Budiman Land on 25 April 1997 for a consideration of 

RM117.591 million. The total estimated cost of investment to Budiman of the 

Budiman Land as at 31 March 2001 is RM153.470 million. On a proportionate 

basis, the total estimated cost of investment to Budiman of the 73.845-Acre Land, 

132.395-Acre Land and 119.82-Acre Land as at 31 March 2001 is RM58.512 

million. 

The table below sets out the respective disposal consideration, open market value 

and estimated net book value of the 73.845-Acre Land, 132.395-Acre Land and 

119.82-Acre Land, as well as the estimated gain to Budiman on the disposals. 

73.845-Acre 132.395-Acre 119.82-Acre 

Land 

Land 

Land 

RM RM RM 

Disposal consideration 14,153 25,375 22,965 

Open market value based on valuation by Colliers 

Jordan Lee & Jaafar (JH) Sdn. Bhd. dated 28 

February 2001 

14,155 25,378 22,967 

Estimated net book value as at 31 March 2001 13,252 23,758 21,502 

Estimated gain to Budiman on disposal 901 1,617 1,463 

38



The 132.395-Acre Land forms part of the Budiman Land. Information on the 

Budiman Land has been provided in Section 3.3.1 above. 


(a) 



Land, to:- 

(i) 

(ii) 

(iii) 


Accept RM12.646 million as the agreed redemption sum for the 


Grant to Bukit Gambir a loan of not less than RM12.646 million 

(“Bukit Gambir Loan 1”) towards completion of the Proposed 

Disposal of 132.395-Acre Land and settlement of the agreed 

redemption sum. 

(b) 



(i) 

(ii) 


OCBC all the separate individual titles to the subdivided lots 

comprised in the 132.395-Acre Land once such titles have been 

issued; and 


as may be required by OCBC for securing the Bukit Gambir Loan 

1 subject to:- 

(A) 

(B) 


the repayment of the Bukit Gambir Loan 1; and 

Bukit Gambir indemnifying Budiman against any loss 

arising from such security arrangement. 

(c) 




Bukit Gambir. 

(d) 


As it is the intention of Bukit Gambir not to have the subdivided lots 

comprised in the 132.395-Acre Land transferred to Bukit Gambir after 

the separate individual titles thereto have been issued, and to develop, 

sell and transfer such subdivided lots without Bukit Gambir being first 

registered as the proprietor thereof, Budiman shall upon completion of 

the Proposed Disposal of 132.395-Acre Land, grant to Bukit Gambir an 

39

irrevocable power of attorney empowering Bukit Gambir to do all acts in 

relation to the 132.395-Acre Land as fully and effectually in all respects 

as Budiman itself could do. 

(e) 


The disposal consideration shall be satisfied by Bukit Gambir in the 

following manner on completion:- 

(i) 

(ii) 

(iii) 

Setting off all the shareholders’ advances granted by Bukit 

Gambir to Budiman as at the completion date of the Proposed 

Disposal of 132.395-Acre Land. As at 15 May 2001, the 

shareholders’ advances granted by Bukit Gambir to Budiman 

amounted to RM9.783 million; 

The Bukit Gambir Loan 1; and 



The basis of determining the disposal consideration is set out in Section 3.3.3 

above. 


3.5.1 Information on Budiman 

Information on Budiman has been provided in Section 3.1.1 above. 


(a) 


The 1,300,000 Shares in Budiman to be acquired by LHHB pursuant to 

the Second Proposed Acquisition of Budiman Shares will be acquired free 

from all claims, charges, liens, pledges or any other encumbrances and 

with all rights and advantages attaching thereto or accruing thereon as at 

and from the date of the Sale and Purchase Agreement, including all rights 

to dividends and other distributions declared, made and paid thereafter. 

(b) 

LHHB to Settle Amalan’s Advances to Budiman 

As at 15 May 2001, Amalan’s advances to Budiman amounted to 

RM7.709 million (“Amalan’s Advances”). LHHB will settle Amalan’s 

Advances. 

40

(c) 

Mode of Satisfaction of Purchase Consideration and Amalan’s 

Advances 

Both the purchase consideration for the Second Proposed Acquisition of 

Budiman Shares of RM3,926,000 (“Purchase Consideration”) and the 

settlement of Amalan’s Advances shall be satisfied by LHHB by way of 

set-off against the amount owing by Amalan to LHM. The sum of the 

Purchase Consideration and Amalan’s Advances shall hereinafter be 

referred to as the “Set-Off Amount”. Amalan and LHM are controlled 

by common shareholders, being the Lau brothers, as set out in Sections 

3.4, 3.5 and 4.8 of Part A of this Circular. The Second Proposed 

Acquisition of Budiman Shares is expected to be completed by the third 

quarter of the year 2001. 

To facilitate the settlement of the Purchase Consideration and Amalan’s 

Advances in the above-mentioned manner, Amalan, LHHB and LHM 

have executed a Set Off Document on 11 April 2001, wherein it is agreed 

that on the completion date of the Second Proposed Acquisition of 

Budiman Shares, the parties will set off the following sums representing 

the Set-Off Amount:- 

(i) 

(ii) 

(iii) 

LHHB will set off the Set-Off Amount against LHM and the 

outstanding loans from LHHB to LHM shall be correspondingly 

reduced by the Set-Off Amount. As at 31 March 2001, the 

outstanding loans from LHHB to LHM amounted to RM79.266 

million. The balance after setting off the Set-Off Amount on 

completion and taking into account real property gains tax 

payable by Amalan, is expected to be approximately RM67.916 

million; 

LHM will set off the Set-Off Amount against Amalan and the 

outstanding loans from LHM to Amalan shall be correspondingly 

reduced by the Set-Off Amount. As at 15 May 2001, the 

outstanding loans from LHM to Amalan amounted to RM21.707 

million. The balance after setting off the Set-Off Amount on 

completion and taking into account the real property gains tax 

payable by Amalan, is expected to be approximately RM10.357 

million; and 

Thereafter, the Purchase Consideration and Amalan’s Advances 

shall be deemed to have been paid and fully settled by LHHB to 

Amalan. 

3.5.3 Basis of Determining the Purchase Consideration 

The basis of determining the purchase consideration for the Second Proposed 

Acquisition of Budiman Shares is similar to that for the First Proposed Acquisition 

of Budiman Shares, and is set out in Section 3.1.3 above. 

41



The 119.82-Acre Land forms part of the Budiman Land. Information on the 

Budiman Land has been provided in Section 3.3.1 above. 


(a) 



Land, to:- 

(i) 

(ii) 

(iii) 


Accept RM10 million as the agreed redemption sum for the 


Grant to Bukit Gambir a loan of not less than RM10 million 

(“Bukit Gambir Loan 2”) towards completion of the Proposed 

Disposal of 119.82-Acre Land and settlement of the agreed 

redemption sum. 

(b) 



(i) 

(ii) 


OCBC the block titles and master titles to the 119.82-Acre Land 

once such titles have been issued; and 


as may be required by OCBC for securing the Bukit Gambir Loan 

2 subject to:- 

(A) 

(B) 


the repayment of the Bukit Gambir Loan 2; and 

Bukit Gambir indemnifying Budiman against any loss 

arising from such security arrangement. 

(c) 




Bukit Gambir. 

(d) 


As it is the intention of Bukit Gambir not to have the subdivided lots 

comprised in the 119.82-Acre Land transferred to Bukit Gambir after the 

separate individual titles thereto have been issued, and to develop, sell 

and transfer such subdivided lots without Bukit Gambir being first 

registered as the proprietor thereof, Budiman shall upon completion of 

the Proposed Disposal of 119.82-Acre Land, grant to Bukit Gambir an 

irrevocable power of attorney empowering Bukit Gambir to do all acts in 

42

elation to the 119.82-Acre Land as fully and effectually in all respects as 


(e) 


The disposal consideration shall be satisfied by Bukit Gambir in the 


(i) 

(ii) 

The Bukit Gambir Loan 2 within three (3) months from the date 

on which the Sale and Purchase Agreement in respect of the 

Proposed Disposal of 119.82-Acre Land becomes unconditional; 

and 

The balance of RM12,965,180.48 by the issuance of new Shares 

by Newco at the initial public offering price (“Consideration 

Shares”). The initial public offering price and the basis therefor 

and hence the number of Consideration Shares, will be 

determined after Newco has obtained the SC’s approval for its 

proposed listing on the KLSE. Budiman undertakes to sell 40% 

of the Consideration Shares to Bumiputra parties approved by the 

Ministry of International Trade & Industry. 

Newco expects to submit its application to the SC by July 2001. 

In the event that the proposed listing of Newco does not take 

place, the Proposed Disposal of 119.82-Acre Land will be 

aborted. 

(f) 

Rights Attaching to Consideration Shares 

The Consideration Shares shall rank pari passu in all respects with the 

other Shares of Newco and shall be similarly listed and quoted on the 

KLSE. 


The basis of determining the disposal consideration is set out in Section 3.3.3 

above. 

3.7 Inter-Conditionality 



Land are inter-conditional with one another. 


the other Proposals. 


Proposals. 

43

4. RATIONALE FOR THE PROPOSALS 

The Proposed Disposal of Atlasprise Shares, Proposed Disposal of 73.845-Acre Land, Proposed 

Disposal of 132.395-Acre Land and Proposed Disposal of 119.82-Acre Land will raise gross 

proceeds of approximately RM46.068 million for the LHHB Group, excluding:- 

(a) 

(b) 

(c) 

The proceeds to be raised from the sale of the Consideration Shares arising from the 

Proposed Disposal of 119.82-Acre Land, which the Company is currently unable to 

determine as the initial public offering price of Newco Shares has yet to be determined; 


After deducting the purchase consideration for the First Proposed Acquisition of Budiman 

Shares. 


Proposal 

Cash Proceeds 

(RM’000) 





49,994 


46,068 

The disposal proceeds will improve the Group’s cash flow for the financial year ending 31 March 

2002 and allow the Group to reduce its bank borrowings which amounted to RM308.406 million as 

at 31 March 2001. The interest saving arising from the repayment of bank borrowings is expected 

to be approximately RM2.465 million per annum assuming an average borrowing cost of 8.3% per 

annum (based on the actual interest rate currently charged by OCBC). At the same time, the First 

and Second Proposed Acquisition of Budiman Shares will enable LHHB to retain a significant stake 

of 90.1% in Budiman and hence the remainder of the Budiman Land amounting to 529.15 acres. 

5. SOURCES OF FUNDS AND UTILISATION OF PROCEEDS 

5.1 Sources of Funds 

As shown in Section 4 above, the purchase consideration for the First Proposed Acquisition 

of Budiman Shares will be set off against the proceeds from the Proposed Disposal of 


Acre Land and Proposed Disposal of 119.82-Acre Land. As stated in Section 3.5.2(c) 

above, the Second Proposed Acquisition of Budiman Shares will be funded by LHHB by 

way of set-off against the amount owing by Amalan to LHM. 

44

5.2 Utilisation of Proceeds 

Utilisation 

Cash Proceeds 

(RM’000) 

Setting off shareholders’ advances granted by Jayaplus and Bukit Gambir to Budiman * 15,075 

Repayment of LHHB Group’s bank borrowings # 29,700 

Working capital 943 

Expenses of the Proposals 350 

Total 46,068 

The proceeds from the Proposals as stated in Section 4 above will be utilised in the 


Notes:- 

* Based on the total estimated shareholders’ advances on completion of the Proposed Disposal 

of 73.845-Acre Land and Proposed Disposal of 132.395-Acre Land, as stated in Sections 

4.3(e)(i) and 4.4(e)(i) above. 

# As stated in Sections 4.3(e)(ii) and 4.4(e)(ii) above. 

6. CONDITIONS PRECEDENT 

6.1 Inter-Conditional Proposals 



Land are inter-conditional and are subject to the following conditions precedent which have 

to be fulfilled within four (4) months from the date of the respective Sale and Purchase 

Agreements or such extended period as may be mutually agreed to by the parties:- 

(a) 

(b) 

(c) 

(d) 



The approval of the shareholders of Bukit Gambir, Jayaplus, Pathalon and 

Budiman; 


(i) 

The Proposed Disposal of 73.845-Acre Land and Proposed Disposal of 

132.395-Acre Land; 

(ii) The fixing of the respective redemption sums in respect of the 73.845- 

Acre Land and 132.395-Acre Land; and 

(iii) The granting of the Jayaplus Loan and the Bukit Gambir Loan 1. 

45

The approval of the FIC was obtained on 25 April 2001 and was subject to the following 

conditions, amongst others:- 

(A) 

(B) 

(C) 

The approval of the shareholders of LHHB is to be obtained at an EGM wherein 

all interested parties are to abstain from voting; 

Competent independent advice is provided to the shareholders of LHHB and the 

appointment of the Independent Adviser is subject to the approval of the FIC; and 

The circular to the shareholders of LHHB shall contain the details of the relevant 

Proposals and the interested parties, and the circular is subject to clearance by the 

FIC. 

The FIC had approved the appointment of Arab-Malaysian as Independent Adviser to the 

shareholders of LHHB and cleared this Circular vide its letters dated 23 May2001. 



Land will be completed simultaneously within three (3) months from the date of fulfillment 

of the last of the conditions precedent stated above. 



the other Proposals and is subject to the following conditions precedent which have to be 

fulfilled within four (4) months from the date of the Sale and Purchase Agreement, being 11 

April 2001, or such extended period as may be mutually agreed to by the parties:- 

(a) 

(b) 

(c) 


The approval of the shareholders of LHHB; and 

The approval of the shareholders of Amalan. 

Completion of the Second Proposed Acquisition of Budiman Shares will take place within 

fourteen (14) days from the date of fulfillment of the last of the conditions precedent stated 

above. 



Proposals and is subject to the following conditions precedent which have to be fulfilled 

within twelve (12) months from the date of the Sale and Purchase Agreement or such 

extended period as may be mutually agreed to by the parties:- 

(a) 

(b) 

(c) 

(d) 



The approval of the shareholders of Budiman; 


(i) 

The Proposed Disposal of 119.82-Acre Land; 

46

(ii) 

(iii) 

The fixing of the redemption sum in respect of the 119.82-Acre Land; and 

The granting of the Bukit Gambir Loan 2; and 

(e) 

The approval of the SC for the proposed listing of Newco and the proposed 

acquisition of the 119.82-Acre Land by Bukit Gambir. 

7. DIRECTORS’ AND SUBSTANTIAL SHAREHOLDERS’ INTERESTS 

As stated in Section 1 above, Mr. Yeo Soo Sia @ Yeo Soo Seng is a director and substantial 

shareholder of Budiman, Bukit Gambir, Jayaplus and Pathalon. He is also a director of Atlasprise. 

He is therefore deemed interested in the First Proposed Acquisition of Budiman Shares, Proposed 

Disposal of Atlasprise Shares, Proposed Disposal of 73.845-Acre Land, Proposed Disposal of 

132.395-Acre Land and Proposed Disposal of 119.82-Acre Land. As such, he has abstained and 

will continue to abstain from all deliberations and voting on the aforesaid Proposals at Board 

meetings of Budiman, Bukit Gambir, Jayaplus, Pathalon and Atlasprise. He will also abstain from 

voting in respect of his direct and indirect shareholdings, on the shareholders’ resolutions of 

Budiman, Bukit Gambir, Jayaplus and Pathalon pertaining to the aforesaid Proposals. 

In view of the interests of Datuk Lau Chong Wang, Dato Lau Eng Guang, Datuk Lau Tuang 

Nguang and Mr. Lau Chun Yuen in the Second Proposed Acquisition of Budiman Shares as 

disclosed in Section 1 above, they have abstained and will continue to abstain from all deliberations 

and voting on the Second Proposed Acquisition of Budiman Shares at Board meetings of LHHB. 

They will also abstain from voting at the forthcoming EGM of LHHB on the resolution pertaining to 

the Second Proposed Acquisition of Budiman Shares in respect of their direct and indirect 

shareholdings in LHHB. 

Mr. Lau Bong Wong and LHM will abstain from voting at the forthcoming EGM of LHHB on the 

resolution pertaining to the Second Proposed Acquisition of Budiman Shares in respect of their 

direct and indirect shareholdings in LHHB. 

Save as disclosed above, none of the directors or substantial shareholders of LHHB or persons 

deemed to be connected to them has any interest, direct or indirect, in the Proposals. 

8. EVALUATION OF THE PROPOSALS 

In our evaluation of the Proposals, we have taken the following into consideration:- 

(a) 

(b) 

(c) 

(d) 

Rationale for the Proposals; 

Basis of determining the consideration for the Proposals; 

Mode of financing the First and Second Proposed Acquisition of Budiman Shares; and 

Financial effects of the Proposals. 

8.1 Rationale for the Proposals 

The rationale for the Proposals is stated to be as follows:- 

“The Proposed Disposal of Atlasprise Shares, Proposed Disposal of 73.845-Acre Land, 

Proposed Disposal of 132.395-Acre Land and Proposed Disposal of 119.82-Acre Land 

will raise gross proceeds of approximately RM46.068 million for the LHHB Group, 

excluding:- 

47

(a) 

(b) 

(c) 

The proceeds to be raised from the sale of the Consideration Shares arising from 

the Proposed Disposal of 119.82-Acre Land, which the Company is currently 

unable to determine as the initial public offering price of Newco Shares has yet 

to be determined; 


After deducting the purchase consideration for the First Proposed Acquisition of 

Budiman Shares. 


Proposal 

Cash Proceeds 

(RM’000) 





49,994 


46,068 

The disposal proceeds will improve the Group’s cash flow for the financial year ending 

31 March 2002 and allow the Group to reduce its bank borrowings which amounted to 

RM308.406 million as at 31 March 2001. The interest saving arising from the repayment 

of bank borrowings is expected to be approximately RM2.465 million per annum 

assuming an average borrowing cost of 8.3% per annum (based on the actual interest 

rate currently charged by OCBC). At the same time, the First and Second Proposed 

Acquisition of Budiman Shares will enable LHHB to retain a significant stake of 90.1% in 

Budiman and hence the remainder of the Budiman Land amounting to 529.15 acres.” 

Pursuant to the Proposals, the LHHB Group will reduce its equity interest in Atlasprise and 

dispose of 326.06 acres of the Budiman Land, and at the same time increase its equity 

interest in Budiman. 

Excluding the proceeds to be raised from the sale of the Consideration Shares arising from 

the Proposed Disposal of 119.82-Acre Land, which are not ascertainable at this point in 

time as the initial public offering price of Newco Shares has yet to be determined, the 

Proposals will raise gross proceeds of approximately RM46.068 million for the LHHB 

Group. This will improve the Group’s cash flow for the financial year ending 31 March 

2002 and allow the Group to reduce its bank borrowings which amounted to RM308.406 

million as at 31 March 2001. The interest saving arising from the repayment of bank 

borrowings is expected to be approximately RM2.465 million per annum assuming an 

average borrowing cost of 8.3% per annum (based on the actual interest rate currently 

charged by OCBC). 

Apart from the reduction in borrowings and the consequent interest savings, the First and 

Second Proposed Acquisition of Budiman Shares will enable LHHB to retain a 90.1% 

stake in Budiman and hence the remainder of the Budiman Land amounting to 529.15 acres. 

LHHB will therefore continue to participate directly in the future profits of Budiman. 

Based on the foregoing, we are of the view that the rationale for the Proposals is reasonable 

and in the best interests of LHHB and its shareholders. 

48

8.2 Basis of Determining the Consideration for the Proposals 

In any related-party transaction, shareholders should consider the fair value of the 

consideration in order to establish that the transaction is on arms-length terms. 

(a) 

Proposed Disposal of 73.845-Acre Land, Proposed Disposal of 132.395-Acre 

Land and Proposed Disposal of 119.82-Acre Land 

The Budiman Land has been valued by Colliers Jordan Lee & Jaafar (JH) Sdn. 

Bhd. on 28 February 2001 at an open market value of RM4.40 per square foot. In 

arriving at their valuation, the valuers have used the comparison method, and have 

checked their valuation by using the residual method. 

Under the comparison method, sales evidence of similar properties in the locality 

are analysed by the valuers for comparison purposes with adjustments made for 

differences in location, size, shape, physical characteristics, legal and other 

restrictions as well as other factors which have influence on property values in 

order to arrive at the open market value. 

The residual method involves the estimation of the gross realisation value of the 

proposed development based on the proposed development mix and assuming that 

the proposed development will be completely sold over an appropriate period. The 

total development costs to be incurred and the developer’s estimated profit are 

deducted from the gross realisation value. The residual value represents the 

present value of the land and is calculated using an appropriate discount rate after 

taking into account the inherent risks of the project. 

(b) 

First and Second Proposed Acquisition of Budiman Shares 

Property development companies are asset-based companies and are normally 

valued using the NTA method. This method establishes the value of equity based 

on the NTA attributable to the equity holders at a specific point in time. It 

represents the net worth attributable to equity holders. The NTA method is 

appropriate when the value of the company’s assets in some way equates to the 

potential earnings power of the company. Based on this premise, the value of 

property development companies is derived from the open market value of their 

land bank and on-going projects. 

The Board has decided to base the consideration for the First and Second Proposed 

Acquisition of Budiman Shares on the estimated NTA of Budiman as at 31 March 

2001 after adjusting for the revaluation surplus arising from the revaluation of the 

Budiman Land. The basis for the consideration is calculated in the following 

manner:- 

RM’000 RM’000 

Estimated NTA as at 31 March 2001 9,218 

Revaluation surplus from Budiman Land 

Open market value based on valuation by Colliers Jordan Lee & 

Jaafar (JH) Sdn. Bhd. dated 28 February 2001 

163,913 

Less: Estimated net book value as at 31 March 2001 (153,470) 

Revaluation surplus 10,443 

10,443 

Adjusted estimated NTA 19,661 

20% of adjusted estimated NTA 3,932 

Purchase consideration 3,926 

Discount/(Premium) to NTA (6) 

Discount/(Premium) to NTA (%) 0.16% 

49

The purchase consideration represents a discount of RM0.006 million or 0.16% to 

the relevant proportion of the adjusted estimated NTA of Budiman as at 31 March 

2001. 

(c) 

Proposed Disposal of Atlasprise Shares 

The disposal consideration for the Proposed Disposal of Atlasprise Shares is based 

on the par value of the Shares concerned, and was arrived at on a willing-buyer 

willing-seller basis after taking into consideration the unaudited NTA of Atlasprise 

as at 30 November 2000 after adjusting for the loss on revaluation arising from the 

revaluation of the Atlasprise Land. The adjusted unaudited NTA is calculated in 

the following manner:- 

RM’000 RM’000 

Unaudited NTA as at 30 November 2000 1,886 

Loss on revaluation of Atlasprise Land 

Open market value based on valuation by Colliers Jordan Lee & 

Jaafar (JH) Sdn. Bhd. dated 28 February 2001 

17,000 

Less: Unaudited net book value as at 30 November 2000 (20,660) 

Loss on revaluation (3,660) 

(3,660) 

Adjusted unaudited NTA (1,774) 

31% of adjusted unaudited NTA (550) 

Disposal consideration 465 

Premium/(Discount) to NTA 1,015 

Premium/(Discount) to NTA (%) 

N.A. 

The disposal consideration represents a premium of RM1.015 million to the 

relevant proportion of the adjusted unaudited NTA of Atlasprise as at 30 

November 2000. 

The Atlasprise Land was valued by Colliers Jordan Lee & Jaafar (JH) Sdn. Bhd. 

on 28 February 2001 at an open market value of RM1.70 per square foot. The 

valuers have adopted the comparison method in arriving at their valuation. 

Based on the above, we are of the opinion that the consideration for the Proposals is 

reasonable. 

8.3 Mode of Financing the First and Second Proposed Acquisition of Budiman Shares 

The consideration for the First Proposed Acquisition of Budiman Shares amounting to 

RM3.926 million will be set off against the proceeds from the Proposed Disposal of 


Acre Land and Proposed Disposal of 119.82-Acre Land. Based on the foregoing, the First 

Proposed Acquisition of Budiman Shares will not have any effect on the LHHB Group’s 

liquidity position. 

The sum of the purchase consideration for the Second Proposed Acquisition of Budiman 

Shares and Amalan’s Advances (“Set-Off Amount”) shall be satisfied by LHHB by way 

of set-off in the following manner:- 

(a) 

LHHB will set off the Set-Off Amount against LHM and the outstanding loans 

from LHHB to LHM shall be correspondingly reduced by the Set-Off Amount. As 

at 31 March 2001, the outstanding loans from LHHB to LHM amounted to 

RM79.266 million. The balance after setting off the Set-Off Amount on 

completion and taking into account real property gains tax payable by Amalan, is 

expected to be approximately RM67.916 million; 

50

(b) 

(c) 

LHM will set off the Set-Off Amount against Amalan and the outstanding loans 

from LHM to Amalan shall be correspondingly reduced by the Set-Off Amount. 

As at 15 May 2001, the outstanding loans from LHM to Amalan amounted to 

RM21.707 million. The balance after setting off the Set-Off Amount on 

completion and taking into account real property gains tax payable by Amalan, is 

expected to be approximately RM10.357 million; and 

Thereafter, the purchase consideration for the Second Proposed Acquisition of 

Budiman Shares and Amalan’s Advances shall be deemed to have been paid and 

fully settled by LHHB to Amalan. 

In view of the above, the Second Proposed Acquisition of Budiman Shares will also not 

have any effect on the LHHB Group’s liquidity position. 

8.4 Financial Effects of the Proposals 

(a) 

Share Capital 

The Proposals will not have any effect on the share capital of LHHB as they do not 

involve the issuance of any Shares by LHHB. 

(b) 

Substantial Shareholders 

The Proposals will not have any effect on the substantial shareholders of LHHB as 

they do not involve the issuance of any Shares by LHHB. 

(c) 

Earnings 

The Proposals are expected to be completed in the financial year ending 31 March 

2002, in the third quarter of the calendar year 2001. On completion of the 

Proposals, LHHB is expected to realise an estimated gain of approximately 

RM3.631 million at the LHHB Group level. This will translate into an increase of 

approximately 1.55 sen in LHHB’s consolidated net EPS for the financial year 

ending 31 March 2002. 

(d) 

NTA and Gearing 

Based on the audited consolidated accounts of LHHB as at 31 March 2000 and the 

estimated accounts of Budiman and Atlasprise as at 30 September 2001, the proforma 

effects of the Proposals on the NTA and gearing ratio of LHHB are shown 

in the table below. 

As at 

(A) (B) (C) 

31.03.2000 

RM’000 RM’000 RM’000 RM’000 

Share Capital 151,568 151,568 151,568 151,568 

Share Premium 23,534 23,534 23,534 23,534 

Revaluation reserves - 3,970 3,970 2,507 

Foreign Exchange Fluctuation Reserve (9,894) (9,894) (9,894) (9,894) 

Unappropriated Profit 52,688 * 50,766 # 50,716 @ 51,770 

Shareholders’ Funds 217,896 219,945 219,895 219,485 

Less: Intangibles (58,262) (58,262) (58,262) (58,262) 

NTA 159,634 161,683 161,633 161,223 

NTA per Share (RM) 1.05 1.07 1.07 1.06 

Total Borrowings 329,156 299,296 299,296 289,296 

Gearing Ratio (times) 1.51 1.36 1.36 1.32 

51

Notes:- 

(A) 

(B) 

(C) 

After all the Proposals except the Second Proposed Acquisition of Budiman Shares 

and the Proposed Disposal of 119.82-Acre Land 

After (A) and the Second Proposed Acquisition of Budiman Shares 

After (B) and the Proposed Disposal of 119.82-Acre Land 

* Assuming a consolidated gain on disposal of RM2.218 million net of expenses 

relating to all the Proposals except the Second Proposed Acquisition of Budiman 

Shares. Apart from the said gain, the unappropriated profit of RM50.766 million 

takes into account the relevant portions of the estimated profits of Budiman and 

Atlasprise for the six (6) months ending 30 September 2001, as well as the interest 

expense arising from the existing bank borrowings for the said period of six (6) 

months. 

# Assuming expenses of RM50,000 relating to the Second Proposed Acquisition of 


@ 

Assuming a consolidated gain on disposal after tax of RM1.053 million 

Apart from the proportionate share of Budiman’s liabilities attaching to the 40% 

equity interest to be acquired by LHHB pursuant to the First and Second Proposed 

Acquisition of Budiman Shares, no other liabilities will be assumed by LHHB 

arising from the Proposals. 

Based on the above, the Proposals are not expected to have any material adverse financial 

effects on the LHHB Group. 

9. CONCLUSION AND RECOMMENDATION 

As stated in the letter from the Board to you, the Board is of the opinion that the Proposals are in the 

best interests of the LHHB Group and accordingly, the Board has recommended (save for Datuk 

Lau Chong Wang, Dato Lau Eng Guang, Datuk Lau Tuang Nguang and Mr. Lau Chun Yuen who 

are interested in the Second Proposed Acquisition of Budiman Shares) that you vote in favour of the 

resolutions pertaining to the Proposals to be tabled at the forthcoming EGM. 

After taking into consideration the various factors discussed above, we are of the opinion 

that, on the basis of the information available to us, the financial terms of the Proposals are 

fair and reasonable and not detrimental to the shareholders of LHHB and accordingly would 

recommend that you vote in favour of the resolutions pertaining to the Proposals to be tabled 

at the forthcoming EGM. 

Yours faithfully, 

ARAB-MALAYSIAN MERCHANT BANK BERHAD 

PUSHPA RAJADURAI 

Director / Head of Corporate Finance 

TAN KENG LIN 

Director, Corporate Finance 

52

LEONG HUP HOLDINGS BERHAD - Announcements

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