JAG BERHAD ("JAG" OR "COMPANY") PROPOSED DIVERSIFICATION OF THE EXISTING BUSINESS OF JAG AND ITS SUBSIDIARIES ("JAG GROUP" OR "GROUP") TO INCLUDE PROPERTY DEVELOPMENT AND PROPERTY INVESTMENT ("PROPOSED DIVERSIFICATION")
  1. INTRODUCTION

    On behalf of the Board of Directors of JAG ("Board"), TA Securities Holdings Berhad ("TA Securities") wishes to announce that the Company proposes to undertake the diversification of the existing business of JAG Group to include property development and property investment ("Property Business").

    Further details of the Proposed Diversification are set out in the ensuing sections of this announcement.

  2. DETAILS OF THE PROPOSED DIVERSIFICATION

    JAG is principally an investment holding company and is also engaged in the business of computer software development, maintenance and support services. The core business of the JAG Group is in recycling and manufacturing activities of extraction, production and refinery of ferrous, non-ferrous and precious metals via the recovery and reclamation of industrial and electronic waste and the trading of ferrous and non-ferrous metals ("Recycling Business"). The Group is also involved in computer software development, maintenance and support services, provision of marketing support, system integration and network solutions as well as operating 24-hour coin-operated (self-operated) laundry business in Malaysia.

    JAG Land Sdn Bhd ("JAG Land"), a wholly-owned subsidiary of JAG was incorporated on 6 February 2015 and its intended activities are to buy, sell, rent and operate self-owned or leased real estate land as well as property development.

    On 28 January 2016, the Board announced that JAG Land had on the same date entered into a sale and purchase agreement with Chewway Heavy Machinery Sdn Bhd, for the purpose of purchasing a parcel of freehold land held under H.S. (D) 137367, PT 133653 Mukim Klang, District of Klang, State of Selangor measuring approximately 13,489.50 square meters in an area bearing postal address Lot No. 10428, Jalan Sg Jati/KS7, Kg Jawa, 41000 Klang, Selangor Darul Ehsan ("Land") for a total purchase consideration of RM9,873,668 ("Acquisition of Land"). The Acquisition of Land was completed on 3 August 2016. The Land was subsequently transferred and registered in the name of JAG Land on 24 August 2016.

    The Acquisition of Land was intended for property investment and/or property development purposes. On 23 August 2016, JAG Land submitted a development order ("Development Order") to the local council, Majlis Perbandaran Klang ("MPK") for a proposed mixed development on the Land comprising shop offices, office suites and residential apartments ("Proposed Development Project"). The Development Order was approved by MPK on 23 November 2016 and it is valid for a period of 12 months. JAG Land shall be the developer for the Proposed Development Project and will apply for other requisite approvals from the relevant authorities.

    As at 30 December 2016, (being the latest practicable date ("LPD") prior to this announcement), JAG Land is in the process of preparing the submission of the building plans for approvals by the relevant authorities which is expected to be submitted in the second (2nd) quarter of 2017. Upon obtaining the approvals for the building plans from the relevant authorities, applications for the developer's license and sales and advertising permit for the Proposed Development Project will be submitted to the Ministry of Urban Wellbeing, Housing and Local Government.

    In addition, JAG Land is in the midst of exploring, discussing and negotiating with other parties for JAG Land to acquire more lands and/or to undertake other property development projects via joint ventures, the details of which have yet to be determined as at this juncture.

    Premised on the above, the Group's (via JAG Land) maiden venture into the Property Business via the Proposed Development Project is expected to provide an additional source of revenue and earnings to the Group. Notwithstanding the Proposed Diversification, the Group intends to continue with its existing business (as mentioned above) in largely the same manner.

    The Proposed Diversification is subject to the approval of the Company's shareholders at an extraordinary general meeting ("EGM") to be convened, and if approved, the JAG Group's business operations in the future will mainly be comprised the Recycling Business and Property Business.

  3. Information on the Land

    The Land is currently vacant, owned and registered under JAG Land. Further information on the Land is as follows:

    Details of land title and postal address

    :

    H.S. (D) 137367, PT 133653 Mukim Klang, District of Klang, State of Selangor bearing postal address of Lot No. 10428, Jalan Sg Jati / KS7, Kg Jawa, 41000 Klang, Selangor Darul Ehsan.

    Total land area

    :

    Measuring approximately 13,489.5 square meters in an area.

    Land tenure

    :

    Freehold

    Net book value based on the latest audited financial statements

    :

    RM9,873,668 based on the purchase consideration of the Land set out in Section 1 of this announcement.

    Express condition

    :

    Nil(1)

    Restriction of Interest

    :

    None

    Category of land use

    :

    Nil(2)

    Endorsements

    :

    Prohibitory orders (Perintah Larangan)(3)which were registered on 11 May 2009, 30 December

    2009, 19 April 2010, 6 July 2011 and 23 November

    2011 (all expired).

    Encumbrances

    :

    The Land is currently free from any encumbrances with no restriction in interest.

    Existing and proposed use

    :

    The Land is currently a piece of vacant land.

    The proposed use of the Land is set out in Section

    2.2 of this announcement.

    Notes:

  4. As at the LPD, JAG Land is in the midst of changing the express condition from "Nil" to "Bangunan/ Bangunan Perniagaan" in accordance with the Development Order and letter dated 19 September 2016 from Pejabat Tanah dan Daerah Klang.

  5. The Land will be used for the Proposed Development Project in accordance with the Development Order.

  6. As at the LPD, the prohibitory orders remained intact with the Land title. Nevertheless, pursuant to Section 338 of the National Land Code,1965, a prohibitory order is effective for a period of six months, unless extended by the court on application and therefore, all the prohibitory orders on the Land title would have ceased to be in force and lapsed. On 23 December 2016, JAG Land through its solicitors had written to Pejabat Tanah Dan Galian Selangor to request for removal of the expired prohibitory orders.

    The location of the Land is illustrated in the diagram below:

  7. Information on the Proposed Development Project

  8. The Proposed Development Project will comprise three (3) phases as follows:

    1. Phase 1:

    2. Six (6) units of four-storey shop-offices with estimated gross floor area of 46,208 square feet ("sqft") ("Shop-Offices"); and

    3. a four (4)-storey podium carpark and amenities from ground floor to third floor.

    4. Phase 2:

    5. one (1) block of seven-storey office tower with a total of 69 units office suites of between 491 sqft to 6,052 sqft ("Office Suites"), one facilities floor and a three-storey carpark, to be erected additionally on the four-storey podium carpark via Phase 1.

    6. Phase 3:

    7. two (2) blocks of 17-storey residential apartments with a total of

    8. 238 residential units of 913 sqft and 1,018 sqft ("Residential Apartments") with one residents' facilities floor, which will be built on top of a seven-storey podium carpark and amenities.

      All the Shop-Offices, Office Suites and Residential Apartments are intended to be made available for sale to third parties. JAG Land may consider to retain some units of Shop-Offices, Office Suites and Residential Apartments to be rented out to third party tenants. The number of Shop-Offices, Office Suites and Residential Apartments to be retained for rent by JAG Land cannot be determined at this juncture and will be subject to, amongst others, the demand for Shop-Offices, Office Suites and Residential Apartments in the Proposed Development Project upon launch and the then prevailing market conditions.

      The Proposed Development Project has an estimated gross development value ("GDV") of between RM155 million to RM170 million (subject to economic conditions) with an estimated gross development cost ("GDC") of RM135 million and an estimated gross development profit of between RM20 million to RM35 million.

      The estimated GDV, GDC and gross development profit as mentioned above are indicative values and may be subject to change resulting from amongst others, variations to the final design, construction costs, the pricing, timing and demand for the properties in the Proposed Development Project upon launch and the then prevailing market conditions.

      The construction of the Proposed Development Project is expected to commence by the fourth quarter of 2017 (i.e. after obtaining all relevant authorities' approvals such as those set out in Section 2 of this announcement and shareholders' approval for the Proposed Diversification) and it is expected to be completed within four (4) years.

    JAG Bhd published this content on 03 January 2017 and is solely responsible for the information contained herein.
    Distributed by Public, unedited and unaltered, on 26 January 2017 15:58:04 UTC.

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