Type: Announcement
Subject : Proposed Acquisition of 40% Equity Interest in Modal Ehsan Sdn Bhd ("Proposed Acquisition")
 
Contents :
1.0 Introduction
Metacorp Berhad ("Metacorp" or "the Company") wishes to announce that the Company had on 10 April 2006 entered into a Shares Sale Agreement ("SSA") with the parties as set out below to acquire 40% equity interest in Modal Ehsan Sdn Bhd (400238-T) ("Modal Ehsan") comprising 8,666,667 ordinary shares of RM1/- each ("Sale Shares") for a total consideration of RM10,400,000/- (Ringgit Malaysia : Ten Million and Four Hundred Thousand) only :-

	Name	No. of Sale	%Paid-UpCapital
a.	Puan Sri Datin Vimala A/P J. Govindasamy	4,333,334	20
b.	Hadiah binti Zalani	2,600,000	12
c.	Festus A/L A. Christ Dhas	1,733,333	8

(Collectively referred to as "Vendors").

2.0 Details of the Proposed Acquisition
2.1 Information on Modal Ehsan
Modal Ehsan is a private limited company incorporated in Malaysia on 29 August 1996. The authorised share capital of Modal Ehsan is RM25,000,000/- divided into 25,000,000 ordinary shares of RM1/- each of which 21,666,667 shares of RM21,666,667/- are issued and fully paid-up.

Modal Ehsan is principally involved in property development. It is currently undertaking a mixed property development project in Kajang, Selangor Darul Ehsan known as Taman Sutera ("Project").

Modal Ehsan is a 60% subsidiary of ACP Industries Berhad ("ACPI") which in turn is an associate company of Metacorp.

2.2 Liabilities Assumed
There are no liabilities to be assumed arising from the acquisition.

2.3 Salient Terms of the SSA
The principal terms and conditions of the Proposed Acquisition as contained in the SSA are, inter alia, as follows:-
(a) The obligations of all parties under the SSA are conditional upon:-

(i) the approval, or no objection, of the Foreign Investment Committee of the Prime Minister's Department, Malaysia to the Proposed Acquisition in accordance with the provisions of SSA ("Approval") being obtained by Metacorp on or before 3 months from the date of SSA, or such other date as may be agreed upon between the parties ("Cut-Off Date"); and

(ii) the approval of the shareholders of Metacorp in general meeting to the Proposed Acquisition in accordance with the provision of SSA, if required, being obtained by Metacorp on or before the Cut-Off Date.

(collectively "Conditions")

(b) The consideration for the Sale Shares is RM10,400,000/- (Ringgit Malaysia : Ten Million and Four Hundred Thousand) or RM1.20 per Sale Share ("Purchase Consideration").

(c) The Purchase Consideration is to be paid in cash to the Vendors, as follows :-

(i) Upon the execution of the SSA, Metacorp must pay a sum of RM1,560,000/-, as a refundable deposit and towards satisfaction of 15% of the Purchase Consideration.

(ii) Upon the satisfaction of the Conditions and subject to warranties given by the Vendors, Metacorp shall on the business day falling 7 days thereafter or such other date as may be agreed upon between the parties ("Completion Date") pay to the Vendors' Solicitors, as stakeholders the sum of RM8,840,000/-, being the balance 85% of the Purchase Consideration ("Balance").

(d) On the Completion Date, the Vendors must deliver to Metacorp the share transfer forms duly completed and executed in favour of Metacorp together with the relevant share certificates and duly completed stamp proforma, all other papers and documents relating to Modal Ehsan which are in the possession of or control of any of the Vendors, and the letter of resignation from Julian Sylvester Theravian, one of the director of Modal Ehsan together with his written acknowledgement that he has no claim against Modal Ehsan in respect of any breach of contract, compensation for loss of office, redundancy or unfair dismissal or on any other grounds whatsoever.

(e) In the event Metacorp shall fail to pay the Balance on or before the Completion Date, the Vendors shall grant to Metacorp an extension of 30 days from the Completion Date provided that Metacorp shall pay to the Vendors interest at the rate of 8% per annum calculated on daily basis on the Balance or any sums as are outstanding.
(f) The Sale Shares are sold free from all liens, charges, pledges and encumbrances and with full legal and beneficial title, with all rights attaching thereto (including all dividends and distributions declared in respect thereof) with effect from the date of the SSA, and on the basis of the warranties given by the Vendors.
(g) Metacorp is not obliged to complete the purchase unless the sale and purchase of all the Sale Shares is completed simultaneously.

3.0 Details of the Purchase Consideration
3.1 Basis of arriving at the Purchase Consideration
The Purchase Consideration was arrived at on a willing buyer-willing seller basis after taking into consideration the net tangible assets of Modal Ehsan.

3.2 Mode of payment
The Purchase Consideration for the Proposed Acquisition will be satisfied entirely by cash from internally generated funds of the Metacorp Group.

4.0 Rationale
The Proposed Acquisition is considered in view of the attractive investment potential of the property development project undertaken by Modal Ehsan. With the Proposed Acquisition, Metacorp Group is expected to expand its property related activities in Klang Valley and thus enabling Metacorp Group to achieve economies of scale and to leverage on its expertise to achieve operating efficiency in property development.

5.0 Financial Effects
5.1 Share Capital and Substantial Shareholders' Shareholdings
The Proposed Acquisition will not have any effect on the share capital and substantial shareholdings of Metacorp as it is financed entirely by cash.

5.2 Net Assets
The proforma effect of the Proposed Acquisition on the audited consolidated net assets of Metacorp as at 31 March 2005 is shown in Table 1 below.

5.3 Earnings
The proposal is not expected to have a material impact on the earnings of Metacorp for the financial year ending 31 March 2007. However, the proposed acquisition is expected to contribute positively to the earnings of Metacorp in the next three years.

6.0 Prospects and Risk Factors
The current Gross Development Value ("GDV") for the Project is expected to generate attractive profit margin.

Like all other businesses, the overall economic and governmental policies of the country would affect the financial and business prospect of the Project. The Project is also subject to certain risks inherent in property development including competition and weak demand for properties.

7.0 Approvals Required
The Proposed Acquisition is not subject to the approval of the shareholders of Metacorp since the percentage ratio for the transaction is below 15%. However, the Proposed Acquisition is subject to the approval or no objection of the Foreign Investment Committee of the Prime Minister's Department, Malaysia.

8.0 Departures From Guidelines
To the best knowledge of the Board of Directors of Metacorp, the Proposed Acquisition is not expected to depart from the Securities Commission's Policies and Guidelines on Issue/Offer of Securities.

9.0 Estimated Time Frame of Completion
The Proposed Acquisition is expected to be completed within 6 months from the date of the SSA.

10.0 Directors' and Substantial Shareholders' Interest
Save as disclosed below, none of the Directors, substantial shareholders of the Company and/or persons connected to them have any interest, direct or indirect, in the Proposed Acquisition.

(i) Dato' Dr. Nik Hussain bin Abdul Rahman ("Dato' Dr. Nik") who is the Group Executive Chairman/Non-Independent Executive Director of Metacorp and Dato' Azmil Khalili bin Dato' Khalid ("Dato' Azmil") who is the Group Managing Director/Non-Independent Executive Director of Metacorp are also the Executive Chairman and Executive Vice Chairman of ACPI respectively.
(ii) Dato' Dr. Nik and Dato' Azmil do not have direct interest in ACPI. Dato' Dr. Nik's interest in ACPI is only via MTD Capital Bhd's ("MTD") major shareholdings of approximately 75% in Metacorp which in turn is a major shareholder of ACPI (29.02% shareholdings).

(iii) Employees Provident Fund Board ("EPF") is a shareholder of Metacorp and a major shareholder of ACPI. EPF is not the largest shareholder of ACPI. It is not a party to the Proposed Acquisition and it is a statutory institution which manages funds belonging to the public.
(iv) MTD has direct shareholdings of 0.82% and indirect shareholdings of 74.17% in Metacorp through its wholly-owned subsidiary, Lambang Simfoni Sdn Bhd. Dato' Dr. Nik is deemed indirectly interested in ACPI by virtue of his spouse shareholdings in MTD, his and his children's major shareholdings in Nikvest Sdn Bhd, a major shareholder with 21.75% shareholdings in MTD.

11.0 Directors' Statement
The Directors of Metacorp are of the opinion that the Proposed Acquisition is in the best interest of the Group.

12.0 Documents for Inspection
A copy of the SSA will be available for inspection at the Registered Office of Metacorp for a period of six (6) months from the date of this announcement.

This announcement is dated 12 April 2006.

 Table 1 - Proforma Effect of Net Asset

	Audited As At 31/3/2005	After The Proposed Acquisition
	RM (000)	RM (000)
Share Capital	339,638	339,638
Share Premium	-	-
Reserves	1,070	1,070
Retained Profits	113,240	113,240
Shareholders equity	453,948	453,948
Minority Interests	1,993	1,993
Net Assets	455,941	455,941
Net Assets per Share	0.67	0.67

Please visit Bursa Malaysia web site for detailed information.
http://announcements.bursamalaysia.com