Boustead Holdings Berhad ("BHB" Or "Company") Proposed Joint Venture Between Bhb And Vereinigte Deutsche Nickel-Werke Ag ("vdn")
1. INTRODUCTION
BHB is pleased to announce that the Company has entered into a shareholders' agreement with VDN today to undertake a joint venture for the development of a Centre of Competence for the Malaysian and Asian coinage industry ("Proposed JV"). Further details on the Proposed JV are set out in the ensuing sections.
2. THE PROPOSED JV
The Proposed JV shall be facilitated via a newly formed joint venture company ("JV Co") which would undertake the development of a Centre of Competence for the local and Asian coinage industry comprising the following:-
- a blanking facility for the production of coin blanks
- a deminting and recycling facility
- a research and development and quality assurance Centre
- an engraving and tool making Centre
Under the shareholders' Agreement, within 14 days from it becoming unconditional BHB and VDN shall subscribe for shares in the JV Co at par as follows:-
| Shareholders |
No. of shares
|
 |
%
|
| BHB |
4,000,000
|
|
50
|
| VDN |
4,000,000
|
|
50
|
|
8,000,000
|
|
100
|
The parties may subscribe for the new shares in JV Co. by payment in cash.
VDN, a corporation incorporated in Germany has a subscribed capital stock of DM25,425,000 and is involved in the following core activities:
? manufacture of strip, wire and bars of nickel, copper and nickel alloys
? recycling non-ferrous metals and refining of precious metals
? manufacture of coin blanks out of non-ferrous and precious metals like gold, silver and platinum
The VDN Group has worldwide interests with investments in more than 10 countries.
4. RATIONALE FOR THE PROPOSED JV
BHB is a well-diversified Group with a diverse range of business. The Proposed JV would provide an opportunity to the BHB to further broaden and enhance its earnings base in the long term. In particular, the Proposed JV would complement BHB Group's existing coinage business. One of the companies in the BHB Group is Boustead Mint Sdn Bhd, a 100% owned subsidiary. The Proposed JV is also part of the overall Vision of BHB to make Malaysia a Center of Competence in the coinage industry in the region and the world.
5. EFFECTS OF THE PROPOSED JV
The Proposed JV will not have any effect on the issued share capital of BHB nor will it have any material effect on the consolidated net tangible assets of BHB as at 30 June 1998. It is not expected to have any material effect on the consolidated earnings of BHB for the year ending 31 December 1999 but is expected to contribute positively to the future earnings of BHB Group.
6. APPROVAL REQUIRED
The Proposed JV is conditional upon, inter-alia the approval of the Foreign Investment Committee.
7. DIRECTORS' AND SUBSTANTIAL SHAREHOLDERS' INTERESTS AND PERSONS CONNECTED TO THEM
None of the Directors and substantial shareholders of BHB and persons connected with them has any interest whether direct or indirect in the Proposed JV.
