IOI,acquire Menara Citibank for RM749.331 million

summarise by author:
menara citibank value at 586.731m + 458m - 295.4m = 749.331m
assumption of RM160m grade A medium term note-inverfin MTN, interest rate is 4.79%

【edit on 2008 nov 28 , to the best interest of shareholder, agreement is canceled , therefore down payment of RM73,362,600 forfeited. 】


1. INTRODUCTION
The Board of Directors of IOI Corporation Berhad (“IOI” or the “Company”) (the “Board”) is pleased to announce that the Company, had on 29 August 2008, entered into a conditional sale and purchase agreement (“SPA”) with Menara Citi Holding Company Sdn Bhd (“Citi Holding”), CapitaLand Limited (“CapitaLand”) and Amsteel Corporation Berhad (“Amsteel”) (collectively known as the “Vendors”) to acquire the entire equity interest in Inverfin Sdn Bhd (“ISB” or the “Acquiree Company”) comprising of 10,000,003 ordinary shares of RM1.00 each in ISB (“ISB Share(s)”) (“Sale Shares”) for a total cash consideration of RM586,731,176 (“Purchase Price”) subject to the terms and conditions of the SPA.


Vendors(%) of ISB
Citi Holding 50
CapitaLand 30
Amsteel 20

Inverfin Sdn Bhd (“ISB”)ISB does not have any subsidiary or associated companies. The audited net profit after taxation for the financial year ended (“FYE”) 31 December 2007 was approximately RM20.375 million whilst the audited net asset value of ISB as at 31 December 2007 was approximately RM295.4 million.

2.3 INFORMATION ON THE MENARA CITIBANK
ISB is the sole and legal beneficial owner of Menara Citibank which is located at 165, Jalan Ampang, Kuala Lumpur and held under Strata Geran 43731/M1-A/B1-B5, 1-51/1 Section 63, Lot 313, No. Petak 1 dalam Tingkat No. B1-B5, 1-51, Bangunan No. M1-A together with accessory parcels Nos. TKB5-A4, TKB4-A8, TKB2-A16, TKB1-A20, A21, A22, A23, A24, TK5-A25, TKB3-A12, Bandar Kuala Lumpur Daerah and Negeri Wilayah Persekutuan Kuala Lumpur. It is situated in the heart of Kuala Lumpur’s Golden Triangle and is 500 meters from Malaysia’s most prominent retail and office icon, the KLCC Petronas Twin Towers. Menara Citibank is erected on a parcel of freehold land measuring 12,694 sq. meter (“sq. mt.”) (or approximately 136,637 square feet (“sq. ft.” )) and is a 50-storey office building together with five (5) levels of basement car parks shared with Nikko Hotel.

Menara Citibank is a Grade A office building and was issued a certificate of fitness for occupation in September 1998. It has a strata floor area of 100,115 sq. mt. (or approximately 1,077,629 sq. ft.) and a net lettable area of 68,156 sq. m. (733,626 sq. ft.) which can be potentially increased to 70,492 sq m or 758,769 sq. ft. Currently, it enjoys a 99% occupancy rate.

The net book value of the Menara Citibank based on the latest audited accounts for the FYE 31 December 2007 is RM458 million and the gross rental revenue is approximately RM43.3 million (excluding the revenue from the car-park of RM3.3 million).

The Property is currently charged as security for the RM160 million nominal value of Medium Term Notes (“MTNs”) 2007/2014 issued by ISB on 30 August 2007.

2.4 BASIS OF ARRIVING AT THE PURCHASE PRICE
The Purchase Price for the Proposed Acquisition was arrived based on the net asset value of ISB as at 31 July 2008 after adjusting for the agreed gross acquisition value of Menara Citibank of RM733.626 million subject to the terms and conditions of the SPA. The agreed gross acquisition value of Menara Citibank is based on RM1,000 per sq. ft. over the present net lettable area of 733,626 sq. ft.


TABLE 1 : FINANCIAL HIGHLIGHTS OF ISB Financial period ended 31 December 2007 2007
Audited
RM’000
Revenue 46,658
Gross Profit 34,588
Operating Profit 34,827
Profit before tax 22,760
Profit after tax 20,375
Shareholders’ funds 295,362
Borrowings 160,253