Termination Of Agreement To Acquire Additional 50% In Sawyer Falls Co L.L.C. (“SFC”)
25 Feb, 2002
Further to the Company’s announcements on 18th, 20th and 27th of July 2001 and 10th September 2001 on the increased investments in SFC, the Board of Directors of Inno-Pacific Holdings Ltd (the “Company”) wishes to announce that the Company and Newton Centre Development Ltd (“Newton”) have mutually agreed to terminate the agreement 7th September 2001 with effect from 25th February 2002. On 7th September 2001, the Company had entered into an agreement with Newton to acquire 33.3 percent of the issued and paid-up common units of US$1.00 each in SFC, for a total consideration of US$1.75 million (S$3.06 million). The Company has paid US$175,000 to Newton as partial consideration. The Company had on 18th July 2001 entered into an agreement with Messrs. Lim Sin Khong and Lim Kian Peng to acquire 16.7 percent of the issued and paid-up common units of US$1.00 each in SFC for a total consideration of US$1.2 million (S$2.2million). The Company has paid US$84,000 as partial consideration. If the agreements of 18th July 2001 and 7th September 2001 were completed, SFC would have become a wholly-owned subsidiary of the Company. The Company has decided to terminate the agreement of 7th September 2001 with Newton because the U.S. and the global economy have slowed down considerably following the 11 September 2001 terrorist attacks in the United States. Accordingly the risk to the Company to own 100 percent of SFC and to meet the ensuing commitments for the development of the property owned by SFC have also increased proportionately. Following the termination of the agreement of 7th September 2001, the Company owns 66.7 percent of the issued and paid-up common units of SFC. Pursuant to the (termination) agreement on 25 February 2002 with Newton, it was agreed that Newton shall manage SFC and be responsible for all the ensuing financial and project commitments of SFC. The Company shall have no further obligation to finance SFC. Furthermore, Newton has undertaken to use its best effort to procure the termination of the agreement of 18 July 2001 between the Company and Messr. Lim Sin Khong and Lim Kian Peng. SFC is a Washington State, USA, limited liability company and has at the date of the termination agreement, issued and paid up capital of US$4.49 million consisting of 10,000 common units and 4.48 million preferred units of US$1.00 each. SFC’s only asset is a 450 acres development property known as Fennel Creek located in Pierce County, Washington, USA. The property has been sub-divided into 979 lots for single family unit development and 6 acres of the property for commercial uses. As at 31 December 2000, the audited NTA of the IPH Group was S$26.1 million. Hence, on a pro forma basis, the termination of the agreement of 7th September 2001 would have had no material impact on the IPH Group’s audited NTA as at 31 December 2001 had the Acquisition taken place on that date.