wah seong corporation berhad (495846-a) stock name - Bursa Malaysia

WAH SEONG CORPORATION BERHAD (495846-A) STOCK NAME TYPE SUBJECT

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WASEONG GENERAL ANNOUNCEMENT TRANSACTIONS (CHAPER 10 OF LISTING REQUIREMENTS) - NON RELATED PARTY TRANSACTIONS WAH SEONG CORPORATION BERHAD (“WSC” OR “COMPANY”) - ACQUISITION OF 100% EQUITY INTEREST IN MUTARES HOLDING-16 AG BY WASCO COATINGS GERMANY GMBH, AN INDIRECT WHOLLY-OWNED SUBSIDIARY OF THE COMPANY

INTRODUCTION The Board of Directors of WSC wishes to announce that Wasco Coatings Germany GmbH (formerly known as PROMOVIA Einundneuzigste Verwaltungsgesellschaft mbH) (Company No. HRB 20431) (“WC Germany” or “Purchaser”), a company incorporated under the German law and registered with the Commercial Register of the Local Court in Stralsund and an indirect wholly-owned subsidiary of WSC has on 14 February 2017 entered into a Share Purchase Agreement (“SPA”) with mutares AG (Company No. HRB 172278) (“Seller”), a company incorporated under the German law registered with the Commercial Register of the Local Court of Munich for the acquisition of 100% equity interest in mutares Holding-16 AG (Company No. HRB 18386) (“MH-16”) for a total cash consideration of EURO Nineteen Million Five Hundred Thousand (€19,500,000.00) only (“Purchase Price”) (“Acquisition”).

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INFORMATION ON MH-16 MH-16 is a stock corporation incorporated under the German law with its registered office in Weissenfels, Germany. The total share capital of MH-16 is EURO Fifty Thousand (€50,000.00) only represented by 50,000 no par bear shares. MH-16 is principally engaged in corporate consulting (except legal and tax consulting), management of its own assets, in particular acquisition, management, holding and exploitation of real estate and corporate participations of all kinds, as well as, provision of other related services that do not require special permits. The Seller is the sole shareholder of MH-16. MH-16 is the sole shareholder of Eupec PipelineServices GmbH (Company No. HRB 8760) (“EUPEC Germany”), a limited liability company incorporated under the German law with its registered office in Fährhafen Sassnitz, Verwaltungsgebäude 1, 18546 Sassnitz, Germany and registered with the Commercial Register of the Local Court of Stralsund. The total share capital of EUPEC Germany is 50,000.00 Deutsche Mark (equivalent to €25,564.60). EUPEC Germany is principally engaged in the coating of pipes with typical insulating material for construction sites, the subsequent isolation of pipe welds of factory coated pipes at the construction site in Germany and abroad, as well as, trading in pipeline commodities and insulating materials for construction sites. (The Seller and EUPEC Germany are referred to as “German EUPEC Group Companies” or individually a “German EUPEC Group Company”)

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INFORMATION ON WC GERMANY WC Germany was incorporated on 25 July 2016 and having its registered office at Hafeneingangsgebäude 20, Fährhafen Sassnitz-Mukran, 18546 Sassnitz, Germany. The total share capital of WC Germany is EURO Twenty Five Thousand (€25,000.00) only comprising 25,000 shares of EURO One (€1.00) each. WC Germany is principally engaged in the provision of pipe coatings services for the oil and gas industry and trading in all associated goods and services.

Wah Seong Corporation Berhad (Company No. 495846-A) - Acquisition of 100% Equity Interest in mutares Holding-16 AG by Wasco Coatings Germany GmbH, an indirect wholly-owned subsidiary of the Company

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INFORMATION ON THE SELLER The Seller was incorporated on 1 February 2008 and having its registered office at Arnulfstraße 19, 80335 Munich, Germany. The total registered share capital of the Seller is EURO Fifteen Million Four Hundred Ninety Six Thousand Two Hundred and Ninety Two (€15,496,292.00) only. The Seller is principally engaged in corporate consulting (except legal and tax consulting), management of its own assets, in particular acquisition, management, holding and exploitation of real estate and corporate participations of all kinds, as well as, provision of other related services that do not require special permits.

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SALIENT TERMS OF SPA Some salient features of the SPA are as follows:(a)

The Seller sells according to the terms and conditions of the SPA (i) 50,000 no par bear shares in MH-16 (“Shares”) and (ii) any and all claims the Seller is entitled to against the German EUPEC Group Companies (“Seller Claims”) to Purchaser.

(b)

Subject to the conditions precedent of the payment of the Purchase Price by the Purchase, the Seller shall transfer and assign the Shares and the Seller Claims to the Purchaser. The transfer shall take economic effect as of the Closing (as defined hereinafter).

(c)

The sale and transfer of the Shares shall include all ancillary rights pertaining thereto, including shareholder contributions made by the Seller into free capital reserves and profits generated. Profits distributed before the signing date of the SPA will remain with the Seller.

(d)

The Purchase Price shall be allocated as follows:(i) EURO One Million Nine Hundred Seventy Thousand Fifteen and Sixty Five Cents (€1,970,015.65) only allocated to the Seller Claims at nominal value; and (ii) EURO Seventeen Million Five Hundred Twenty Nine Thousand Nine Hundred Eighty Four and Thirty Five Cents (€17,529,984.35) only allocated to the Shares.

(e)

The Purchase Price shall be paid by the Purchaser directly and/or on behalf of the Purchaser by Nord Stream 2 AG, a company incorporated in Switzerland with its registered address at Baarerstrasse 52, 6300 Zug, Switzerland (“NS2 AG” or “Customer”) to a designated bank account of the Seller (“Seller’s Bank Account”).

(f)

Immediately upon both parties having signed the SPA, the Purchaser shall ensure that full payment of the Purchase Price is paid to the Seller’s Bank Account on the signing date (“Signing Date”) within three (3) hours after the signing of the SPA. The point in time when the full payment of the Purchase Price has been made by the Purchaser to the Seller shall constitute the “Closing”.

(g)

Subject to occurrence of Closing, the Purchaser assumes the Seller’s obligations under the letter of comfort issued by the Seller to EUPEC Germany. The said undertaking shall be construed as an undertaking for the benefit of a third party. Subject to the occurrence of Closing, the Purchaser undertakes towards the Seller to hold the Seller harmless and fully indemnify the Seller on first demand in respect of any and all claims raised or resulting out of or being in connection with the preceding letter of comfort.

(h)

The Seller shall instruct the bank maintaining the Seller’s Bank Account to confirm immediately upon receipt of the payment of the Purchase Price by facsimile to the Purchaser and Seller, that the Purchase Price has been paid and that the Closing has occurred. The date on which Closing has been taken place shall be the “Closing Date”.

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6.

(i)

In the event that the Closing has not taken place on the Signing Date within three (3) hours after the signing of the SPA, the SPA shall cease to be valid unless the Seller has sent a written notice to the Purchaser that the Seller agrees to a proposal by the Purchaser to extend the time period until when Closing has to take place.

(j)

The Seller shall use best endeavours to ensure that at Closing Date, the members of the management board and the supervisory board of MH-16 (“MH-16 Directors”) will have resigned from their position. If such resignation should prove not possible before the Closing Date, the Seller shall ensure that for the time after the Closing Date, MH-16 Directors shall make use of their empowerments as organs of MH-16 solely in accordance with the specific instructions of the Purchaser.

(k)

The Seller shall use best endeavours to ensure that at Closing Date, the members of the management of EUPEC Germany (“EUPEC Germany Management”) will have resigned from their position. If such resignation should prove not possible before the Closing Date, the Seller shall ensure that for the time after the Closing Date, EUPEC Germany Management shall make use of their empowerments as organs of EUPEC Germany solely in accordance with the specific instructions of the Purchaser.

(l)

The Seller undertakes and ensures that at Closing Date, all agreements entered into by the German EUPEC Group Companies and any of their or the Seller’s affiliates will be terminated and that all mutual claims resulting therefrom except for the Seller Claims will be settled.

BASIS OF ARRIVING AT THE CONSIDERATION AND SOURCE OF FUNDING The Purchase Price was arrived at based on willing buyer willing seller basis after taking into consideration the requirements of the Nord Stream 2 Project. The Purchase Price will be funded through project financing by the Customer.

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LIABILITIES TO BE ASSUMED Save for the obligations and liabilities in and arising from the Acquisition, pursuant to or in connection with the SPA, there are no other liabilities including contingent liabilities and guarantees to be assumed by WSC and its subsidiaries (“WSC Group”).

8.

RATIONALE OF THE ACQUISITION Wasco Coatings Europe B.V. (Company No. 08134516) (“WCEu”), a company incorporated in The Netherlands and the Company’s indirect wholly-owned subsidiary, had on 6 September 2016 entered into a contract with NS2 AG for the provision of concrete weight coating and storing of pipes for the Nord Stream 2 Project for a contract value of approximately EURO Six Hundred Million (€600,000,000.00). Nord Stream 2 is a planned pipeline through the Baltic Sea, which will transport natural gas over 1,200km from the world’s largest gas reserves in Russia via the most efficient route to consumers in Europe. It involves two parallel 48 inch lines, each starting from southwest of St Petersburg (a Russian port city on Baltic Sea) and ending at German coast, Greifswald. The Acquisition would enable WC Germany to use the existing plant and machinery in Mukran, Germany to perform its pipe coating activities for the purposes of the Nord Stream 2 Project.

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9. 9.1

FINANCIAL EFFECTS OF THE ACQUISITION Share Capital and Substantial Shareholdings The Acquisition will not have any effect on the share capital and substantial shareholdings of WSC as the Total Purchase Consideration will be satisfied entirely by cash.

9.2

Net Assets (“NA”) The Acquisition will not have material effect on the consolidated NA of WSC Group for the financial year ending 31 December 2017.

9.3

Earnings The Acquisition is expected to have positive effect on the earnings of WSC Group for the financial year ending 31 December 2017.

9.4

Gearings The Acquisition is not expected to have material effect on the gearings of WSC Group for the financial year ending 31 December 2017

10.

RISK FACTORS As German EUPEC Group Companies are involved in the provision of pipe coatings services for the oil and gas industry, the risks arising from the Acquisition are normal risks associated with the core business of WSC Group i.e. pipe coating.

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COMPLETION The Acquisition was completed on 14 February 2017.

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APPROVALS OF AUTHORITIES

SHAREHOLDERS

AND

THE

RELEVANT

GOVERNMENTAL

The Acquisition is not subject to the approval of the shareholders of WSC or any governmental authorities.

13.

DIRECTORS’ AND MAJOR SHAREHOLDERS’ INTERESTS None of the directors, major shareholders and/or persons connected to them have any interest, direct or indirect, in the Acquisition.

14.

STATEMENT BY DIRECTOR The Board of Directors of the Company, having considered all aspects of the Acquisition, is of the opinion that the Acquisition is in the best interest of the WSC Group.

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HIGHEST PERCENTAGE RATIO Pursuant to Paragraph 10.02(g) of the Main Market Listing Requirements of Bursa Malaysia Securities Berhad, the highest percentage ratio applicable to the Acquisitions is 23.4%, based on the latest audited consolidated financial statements of WSC for the financial year ended 31 December 2015. 4


17.

DOCUMENTS FOR INSPECTION The SPA is available for inspection at the registered office of the Company during normal office hours from Mondays to Fridays (except public holidays) at Suite 19.01, Level 19, The Gardens North Tower, Mid Valley City, Lingkaran Syed Putra, 59200 Kuala Lumpur for a period of three (3) months from the date of this announcement.

This announcement is dated 15 February 2017.

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