PRG Holdings Berhad Annual Report 2019

ANNUAL REPORT 2019 189 NOTES TO THE FINANCIAL STATEMENTS 31 DECEMBER 2019 cont’d 38. SIGNIFICANT EVENTS DURING THE FINANCIAL YEAR (continued) (iii) On 16 January 2019, the Company obtained approval from its shareholders to dispose up to 60,480,000 ordinary shares in FHL, representing up to 12% equity interest in FHL, to buyer(s) to be identified and at price(s) to be determined later in the open market and/or via direct business transactions, in cash (“Disposal Mandate”). The Disposal Mandate from its shareholders is valid for a period of 12 months from 16 January 2019. On 30 May 2019, the Company had disposed of 13,000,000 ordinary shares in FHL, representing 2.58% equity interest in FHL via direct business transactions for a total cash consideration of HKD26,000,000 (equivalent to RM13,900,000) at HKD2.00 (equivalent to RM1.0692) per share. On 4 June 2019, the Company had sold 1,052,000 ordinary shares in FHL, representing 0.21% equity interest in FHL in the open market for a total cash consideration of HKD2,998,200 (equivalent to RM1,601,000) at HKD2.85 (equivalent to RM1.5216) per share. Upon completion of the above disposals of ordinary shares in FHL, the Company’s shareholdings in FHL was reduced from 317,520,000 ordinary shares representing 63% to 303,468,000 representing 60.21%. (iv) On 12 March 2019, a sale and purchase agreement (“S&P Agreement”) was entered into among Furniweb Holdings Limited (“FHL”), Triumph Star Global Limited (the “Vendor”) and Ms. Jim Ka Man, the guarantor. Pursuant to the S&P Agreement, FHL has conditionally agreed to purchase and the Vendor has conditionally agreed to sell the entire issued share capital of Meinaide Holdings Group Limited (“MHGL”) for the consideration of HKD140,000,000, which shall be satisfied by FHL by way of allotment and issue of 56,000,000 shares of FHL at the issue price of HKD2.50 per share to the Vendor or its nominee credited as fully paid upon completion in accordance with the terms and conditions of the S&P Agreement. Following the fulfilment of all the relevant conditions of the S&P Agreement, the acquisition was completed on 28 June 2019. Upon completion of the acquisition, the Company’s shareholdings in FHL was diluted from 60.21% to 54.19% due to the enlarged total ordinary shares in FHL. Accordingly, MHGL and its wholly-owned subsidiaries comprising Meinaide Technology Development Limited, Perfect Moral Ventures Limited and Jiangmenshi Meinaide Technology Company Limited have become indirect 54.19%-owned subsidiaries of the Company. (v) On 18 June 2019, PRG Property Sdn. Bhd. (“PRG Property”), a wholly-owned subsidiary of the Company, had received a letter of intent from Liveintent Sdn. Bhd. (“Liveintent”) for a conditional offer to purchase 150,000 ordinary shares in Premier De Muara Sdn. Bhd. (“PDMSB”), representing 60% equity interest in PDMSB. On 26 July 2019, the Company, PRG Property and PDMSB had entered into a conditional share sale agreement (“SSA”) with Liveintent for the proposed disposal of 150,000 ordinary shares representing 60% equity interest in PDMSB by PRG Property to Liveintent for a cash consideration of RM7,200,000. On 19 February 2020, the Company, PRG Property, PDMSB and Liveintent had executed a supplemental agreement to vary the clauses in relation to the manner of payment of the consideration and to extend the Cut- Off Date for a further period of 6 months to fulfil the Conditions Precedent as stated in the SSA. (vi) On 16 September 2019, Furnitech Components (Vietnam) Co., Ltd. (“FCV”) had entered into a binding term sheet with an independent third party potential purchaser for the acquisition of entire 100% equity interest in FCV from the current owners of FCV. FCV is a 45.06%-owned associate of the Group, principally engaged in the manufacture and sale of metal components for furniture. The proposed disposal is subject to among others, the signing of definitive agreements, the terms of which are to be agreed by related parties. (vii) On 4 October 2019, the Company announced that FHL had entered into a binding term sheet with an independent third party potential purchaser on 4 October 2019 for the sale of Premier Elastic Webbing & Accessories (Vietnam) Co., Ltd. (“PEWA”), a subsidiary of FHL, principally engaged in the manufacture and sale of narrow elastic fabrics. A deposit of USD193,000 was paid by the potential purchaser to FHL and the balance consideration will be determined at a later stage by the parties. The proposed disposal is subject to, among others, the signing of a definitive capital transfer agreement, the terms of which are to be agreed by FHL and the potential purchaser. On 13 January 2020, PRG announced that PEWA, Furniweb Vietnam Shareholdings Co., Ltd. (“Furniweb Vietnam”) (an indirect wholly-owned subsidiary of FHL) and Webtex Trading Sdn. Bhd. (“Webtex”) (an indirect wholly-owned subsidiary of FHL) had on 10 January 2020 entered into a capital transfer agreement with Four K Investment Limited for the transfer of the entire registered and paid-in charter capital of USD2,100,000 of PEWA, which is contributed and held as to 57.14% by Furniweb Vietnam and 42.86% by Webtex for a cash consideration of VND68,212,569,000 (equivalent to approximately USD2,946,000).