We refer to our Company’s announcement dated 1 April 2024 in respect of the Proposed Acquisition (“Announcement”).

Unless otherwise stated, all capitalised words and abbreviations used herein shall have the same meaning as those defined in the Announcement.

The Company wishes to furnish the following additional information in connection with the Proposed Acquisition, as required by Bursa Securities pursuant to its query letter dated 2 April 2024 (Ref No. IQL-02042024-00001):-

1. The net assets of Sanshin based on the latest audited financial statements, which was as at 31 December 2022 was RM42.13 million.

2. The cash consideration of RM13.44 million shall be payable on the completion date being: (a) a date falling on the fifth (5th) business day following the business day immediately after the date on or by which all the conditions precedent in the SPA have been fulfilled or waived; or (b) such other date as the parties may agree in writing.

3. The Purchase Consideration was derived on a price earnings multiple of 10.0 times based on Sanshin’s audited profit after tax of RM1,343,826 for the financial year ended 31 December 2022. 

The Purchase Consideration is approximately 68.10% lower than the net assets of Sanshin as at 31 December 2022 based on its audited financial statements for the financial year ended 31 December 2022 and approximately 45.96% lower than its adjusted net assets based on its unaudited financial statements as at 31 December 2023.

The comparable transactions considered by Betamek with reference to the sale of its own shares or the shares of its wholly-owned subsidiary, being the closest comparable business to Sanshin, as follows:-

(a) Iskandar Holdings Sdn Bhd acquired 35% equity interest in Betamek Electronics (M) Sdn Bhd (“BESB”), a wholly-owned subsidiary of Betamek, from Huang Yen-Ling, the spouse of the late Lin Shih-Hsien at a consideration sum of RM38.5 million. The purchase consideration was arrived at on a willing-buyer-willing-seller basis, after taking into consideration the profit after tax (“PAT”) of BESB for the financial year ended 2021 (“FYE 2021”) of RM12.2 million, over which the purchase consideration represented 9 times the PAT of BESB for FYE 2021; and

(b) The price earnings multiple of Betamek’s initial public offering price of approximately 16.7 times based on Betamek’s earning per share for FYE 2022 of approximately 2.99 sen, against Betamek’s enlarged share capital of 450,000,000 shares upon listing.

The ascribed price-earnings multiple of 10.0 times in respect of the purchase consideration for Sanshin is within the range of the 2 comparable transactions listed above.

4. The applications to the Ministry of Investment, Trade and Industry of Malaysia and the Malaysian Investment Development Authority are expected to be submitted within three months from 29 March 2024, being the date of signing of the SPA.

This announcement is dated 3 April 2024.