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Related Party Transaction

BackAug 07, 2008
General Announcement
Reference No DE-080807-41960

Company Name
:
DAYANG ENTERPRISE HOLDINGS BERHAD 
Stock Name
:
DAYANG
Date Announced
:
07/08/2008


Type
:
Announcement
Subject
:
RELATED PARTY TRANSACTION

Contents
:
1. Introduction

Pursuant to paragraph 10.08 of the Bursa Malaysia Listing Requirements, the Board of Dayang Enterprise Holdings Bhd ("DEHB") wishes to announce that its wholly owned subsidiary Dayang Enterprise Sdn Bhd ("DESB") has on 6 August 2008 acquired plant & machinery located at lot CL205318752 Jalan Patau-Patau, 87000 Federal Territory of Labuan from a related party, S.K. Ling & Sons Sdn, Bhd, ("SKLS") for a total cash consideration of Ringgit Malaysia Four Hundred and Ninety-Five Thousand only (RM495,000.00) ("the Purchase Consideration").

2. Information of SKLS

SKLS was incorporated on 10 May 1983 under the Companies Act 1965. SKLS is wholly owned by Mr Ling Suk Kiong and family. The principal activity of SKLS is equipment and machinery rental.

3. Information of DESB

DESB was incorporated on 20 August 1980 under the Companies Act 1965. DESB is engaged in the business of offshore maintenance and construction services and is principally involved in the provision of offshore topside maintenance services, minor fabrication works and offshore hook-up and commissioning.

4. Details of the Plant and Machinery Acquired

The plant and machinery consist of the following :-
a) 5 units Ingersoll-Rand Air Compressor
b) 5 units of Graco Airless spray pump
c) 12 units of 600 lbs Clemco Blasting pot
d) 6 units of Phoenix Model 15D Electrode oven
e) 3 units of Clemco mini Blasting pot
f) 3 units of Miller 500 Welding machine
g) 2 units of Rockwell Cold Cut machine

5. Purchase Consideration
The Purchase Consideration is arrived based on a willing-buyer willing-seller basis after taking into consideration the valuation by valuer, Knight Frank dated 20 May 2008 of RM550,000.00. The Purchase Consideration of RM495,000.00 represents a discount of RM55,000.00 or 10% discount from valuation.

6. Information of the Related Parties
1) SKLS is the owner of the plant and machinery.
2 Mr Ling's interests are as follows;
a) a director of DEHB, DESB and SKLS
b) he has a direct interest of 35,136,092 shares (9.98%) in DEHB
c) he has direct interest of 50,000 shares (50%) in SKLS
3) Spouse of Mr Ling, Ms Wong Siew Hong's interests are as follows:
a) a director of SKLS
b) she has a direct interest of 50,000 shares (50%) in SKLS
4) Sister of Mr Ling, Ms Ling Siuk Chea is a director of SKLS.

7. Funding
The Purchase Consideration shall be satisfied entirely by internally generated funds.

8. Rationale
The proposed acquisition will enable DESB to own the plant and machinery currently being used in its operations instead of renting from related party, SKLS. The acquisition is viewed positively as a long term investment for Dayang Group in terms of rental savings.

9. Financial Effects
The acquisition will not have any material effect on the share capital, net assets, substantial shareholders' shareholdings and earnings of the Dayang Group for the financial period ending 31 December 2008.

10. Directors and Major Shareholders' Interest
Save for Mr Ling Suk Kiong and his son Mr Joe Ling Siew Loung @ Lin Shou Long, none of the directors and major shareholders of the Company and/or persons connected to them has any interest, direct or indirect in the proposed acquisition.

11. Statement by the Board of Directors
The Board of Directors ( with the exception of Mr Ling Suk Kiong and Mr Joe Ling Siew Loung @ Lin Shou Long) who had abstained from the board deliberations pertaining to the acquisition of the plant and machinery located at Lot CL205318752 Jalan Patau-Patau, 87000 Federal Territory of Labuan, having considered all aspects of the Proposed Acquisition, is of the opinion that the acquisition is at arm's length basis fair and reasonable and not to the detriment of the minority shareholders.

12. Approval Required
The acquisition does not require the approval of shareholders of DEHB and/or other relevant government authorities.

Dated this 7 August 2008.