Rimbunan Sawit Berhad ("RSB" or "Company) wishes to announce that RSB's wholly-owned subsidiary, Nescaya Palma Sdn Bhd (“NPSB”) had on 16 April 2012 entered into an Agreement with Bong Hon Voo and Yaw Chee Weng (collectively known as “the Vendors”) to acquire from the Vendors the entire 2,400 issued and paid-up ordinary shares of RM1.00 each (“Sale Shares”) in the capital of Formasi Abadi Sdn Bhd (“FASB”) and FASB’s undertaking’s, properties and assets, present and future, at the purchase consideration of RM35,832,561 [“Acquisition”].
(1) Information on the Vendors

Bong Hon Voo (Malaysian) and Yaw Chee Weng (Malaysian), both of 295, 1^st and 2^nd Floors, Lorong 9, Section 9, Rubber Road, 93400 Kuching, Sarawak. The Sale Shares are held by the Vendors legally and beneficially.

(2) Information on FASB

FASB is a company incorporated in Malaysia and having its registered office at 295, 1^st and 2^nd Floors, Lorong 9, Section 9, Rubber Road, 93400 Kuching, Sarawak. FASB involved in the business of land and general investment and is, as at the date of the Agreement, the registered proprietor of all that parcel of land situate at Sungai Tutuh, Melinau Area, containing an area of 3,386 hectares more or less and described as Lot 4 Apoh Land District (“the said Land”).

The directors and substantial shareholders together with their respective shareholdings in FASB as at 16 April 2012 are as follows:

Name	Age	Nationality	NRIC No.	No. of shares	(%)
Bong Hon Voo	53	Malaysian	581109-13-5223	1,200	50
Yaw Chee Weng	48	Malaysian	640324-13-5573	1,200	50

The purchase consideration for the Acquisition is Ringgit Malaysia Thirty Five Million Eight Hundred Thirty Two Thousand and Five Hundred Sixty One only (RM35,832,561) was arrived at based on a “willing-buyer willing-seller” basis after taking into consideration the nominal value of the Sale Shares and the indicative market value of the surrounding lands. The Net Book Value of the Land based on the latest Audited Financial Statements of FASB for the financial year ended 31 August 2011 is RM2,885,457. The Sale Shares and the Land are free from all encumbrances.

The said purchase consideration will be satisfied by utilizing internal generated fund and shall be payable to the Vendors in the following manner:

• the sum of RM8,710,064 upon the execution of the Agreement;
• the sum of RM25,122,497 to the Vendors solicitor as stakeholder within seven (7) months from the date of the Agreement, to be released to the Vendors upon registration of the Sale Shares in favour of NPSB or its nominee; and
• the balance of RM2,000,000 (“Retention Sum”) shall be paid after the completion of the timber extraction from the said Land. In the event that the Vendors complete their harvesting activities earlier than the stipulated period of two (2) years after the date of the Agreement, and upon a written notification to that effect from the Vendors as well as the Vendors having vacated the said Land, NPSB shall thereafter without delay remit the said Retention Sum to the Vendors.

       

Feasibility study have been undertaken by the Company in respect of the said Land on 19 December 2011.

(5) Effect of the Acquisition

The Acquisition is expected to contribute positively towards NPSB and RSB Group’s earnings.

The Acquisition is not expected to have any material effect on the earnings, net assets and gearings of the Company for the financial year ending 31 December 2012, share capital and substantial shareholders’ shareholding of the Company.

(6) Particulars of all liabilities, including contingent liabilities and guarantees to be assumed by NPSB, arising from the Acquisition

There is no liability, including contingent liabilities and guarantees to be assumed by NPSB, arising from the Acquisition.

(7) Whether the Acquisition is subject to the approval of shareholders and the relevant government authorities and the estimated time frame for submission of the application to the relevant authorities

The Acquisition is not subject to the approval of shareholders and the relevant government authorities.

(8) Directors’ and/or Major Shareholders’ Interest

None of the Directors and/or Major Shareholders RSB and/or persons connected with them have any interest, direct or indirect, in the Acquisition.

(9) Rationale for Acquisition including any benefit which is expected to accrue to RSB Group as a result of Acquisition

The Acquisition is consistent with RSB’s plans to continue to expand its oil palm cultivation business by acquiring new land bank in Malaysia. The Acquisition represents a strategic investment by NPSB and is expected to contribute positively to the earnings as well as the shareholders’ value of the RSB Group in the medium to long term.

(10) The salient features of the Agreement, if any, and the time and place where the documents may be inspected

The Acquisition shall be on the following bases:

a) that from the date of the Agreement and pending registration of the Sale Shares in favour of NPSB or the nominee or nominees, FASB shall not issue or agree to issue any shares or any securities convertible to shares or give or agree to give any options in respect of any shares nor issue or agree to issue or give any option in respect of any debentures or other securities;
b) that it shall not for so long as the Agreement has not been terminated whether by itself or its attorney (if any) cause FASB to charge, transfer, sell, convey or otherwise deal with the said Land in any manner whatsoever so as to encumber, encroach upon or divest FASB of its rights, title and interest to the said Land;
c) that it shall not for so long as the Agreement has not been terminated whether by itself or its attorney (if any) cause FASB to transfer, sell, convey or otherwise deal with the said Land in any manner whatsoever so as to divest FASB of its rights, title and interest to the said Land;
d) NPSB shall be solely liable and responsible for the payment of all charges, fees and dues from the relevant authorities in relation to the said Land from the date of the Agreement;
e) if the Vendors fail/refuse or is otherwise unable to transfer the Sale Shares to NPSB in accordance with the terms contained in the Agreement, NPSB shall be entitled to terminate the Agreement whereupon the Vendors shall forthwith refund all payments made by NPSB plus an equivalent sum as pre-estimated liquidated damages and thereafter the Agreement shall be deemed to be terminated and neither party shall thereafter have any claim against the other, without prejudice to the rights of NPSB for specific performance of the Agreement;
f) notwithstanding any other terms and conditions contained in the Agreement and/or any rights NPSB have as the shareholders of FASB and/or any other rights NPSB may have by virtue of the Companies Act, 1965, NPSB agree and undertake that the Vendors shall be entitled to continue harvesting timber unrestricted in the said Land and all proceeds therefrom to be paid and/or remitted to the Vendors and/or their nominees through FASB until after the payment of the second payment, and thereafter the Vendors shall be entitled to continue harvesting timber in said Land as aforesaid for a further period of two (2) years after the date of the Agreement provided the Vendors shall take reasonable precautions in order not to interfere with NPSB’s plantation operations; and
g) notwithstanding any terms contained in the Agreement, NPSB shall not be entitled to interfere with the Vendors’ timber harvesting operations or area to be logged and Vendors shall likewise not be entitled to interfere with the NPSB’s plantation operations in the logged over areas.

The Agreement, feasibility study report and all other relevant documents in connection with the Acquisition are available for inspection at RSB’s registered office at No. 85 & 86, Pusat Suria Permata, Jalan Upper Lanang 12A, 96000 Sibu, Sarawak from Monday to Saturday (except public holidays) during normal business hours, for a period of three (3) months from the date of this announcement.

(11) The date on which the terms of the Acquisition were agreed upon

The terms of the Acquisition were agreed upon on 16 April 2012.

(12) Directors’ Statement

Having considered the rationale and all other aspects of the Acquisition, the Board is of the opinion that the Acquisition is in the best interest of RSB Group.

(13) Prospect

The Acquisition is expected to contribute positively to the earnings of the RSB Group. The Board believes that with the increase in the size of the land bank pursuant to the Acquisition, it will put the RSB Group on a strong footing to become one of the major players in the oil palm cultivation business in Malaysia.

(14) Risk Factor

The Board does not foresee any material risks pursuant to the Acquisition except for the inherent risk factors associated with the plantation industry in which the RSB Group is already involved. Nonetheless, any risk arise from the Acquisition will be addressed as part of the RSB Group’s ordinary course of business.

   
(15) Estimated timeframe for completion of the Acquisition

The Acquisition is expected to be completed by December 2012, barring unforeseen circumstances.


(16) Highest Percentage ratio of the Acquisition

The highest percentage ratio applicable to the Acquisition pursuant to Paragraph 10.02(g) of the Main Market Listing Requirements is 8.39%.

   
This announcement is dated 16 April 2012.