prg holdings berhad joint venture agreement 1. introduction

PRG HOLDINGS BERHAD

JOINT VENTURE AGREEMENT

1. INTRODUCTION

The Board of Directors (“Board”) of PRG Holdings Berhad (“PRG” or the “Company”)

wishes to announce that Premier Construction Sdn Bhd (“PCSB” or “Proprietor”), a wholly-

owned subsidiary of PRG Property Sdn Bhd which in turn is a wholly-owned subsidiary of

the Company, has on 30 March 2021 entered into a joint venture agreement (“JVA”) with

Semangat Hikmat Sdn Bhd (“SHSB” or “Developer”) for the proposed development of the

land located in Taman Gading, Batu Gajah, Mukim Sungai Terap, Daerah Kinta, Perak

(“Land”) for residential developments scheme together with all the necessary infrastructure

and public utilities, upon the terms and conditions stipulated in the JVA (“Proposed Joint

Venture”).

(PCSB and SHSB are referred to individually as the “Party” and collectively as the

“Parties”.)

2. DETAILS OF THE PROPOSED JOINT VENTURE

(i) The Proprietor is the registered owner of the Land and form part of the Proprietor’s

housing project known as “Taman Gading, Batu Gajah” (“Project”).

(ii) The approved Building Plans and Layout Plans for the Project was approved under

the company known as Premier Aspirasi (Batu Gajah) Sdn Bhd (“PABG”).

(iii) The Land are not charged to any financial institution or third party, however there

is/are private caveat(s) entered by Forte Emerald Sdn Bhd (“Caveator”] against some

of the titles of the Land.

(iv) The Developer has all the necessary knowledge, expertise and experience in the field

of property development and related business and is able to provide technical,

commercial, financial and management expertise and is in a position to undertake the

overall development of the Land.

(v) The Developer has offered and the Proprietor has agreed to enter into the JVA

whereby the Proprietor is to contribute the Land and shall thereto be entitled to the

Proprietor’s entitlement (as provided in the JVA) whilst the Developer is to at its own

cost and expense develop the Land for residential developments scheme together with

all the necessary infrastructure and public utilities in accordance with the duly

approved Building Plans and the Layout Plans of the Project (“Development”) and

market the Development in accordance with the terms and conditions of the JVA.

3. INFORMATION OF THE PARTIES

PCSB

PCSB was incorporated in Malaysia as a private limited company on 9 September 2013. As

at the date of this announcement, PRG Property Sdn Bhd, a wholly-owned subsidiary of

PRG, is entitled to the entire 5,000,000 issued shares of PCSB.

The Directors of PCBS are Dato’ Wee Cheng Kwan and Cheah Hannon. The principal

activity of PCSB is to engage as a contractor for civil and building construction works.

SHSB

SHSB was incorporated in Malaysia as a private limited company on 2 December 2005.

SHSB is principally involved in property construction and development.

The issued share capital of SHSB is RM600,000.00 comprising 600,000 ordinary shares.

The directors and shareholders of SHSB are Loo Leep Chye and Loo Xin Theng holdings

540,000 ordinary shares and 60,000 ordinary shares respectively.

4. SALIENT TERMS OF THE JVA

The salient terms of the JVA include, amongst others, the following:

4.1 Agreement to develop

In consideration of the Developer agreeing to advance and pay to the Proprietor the

deposit pursuant to the JVA and subject to the various agreements, undertakings,

covenants and obligations of the Parties, the Proprietor agrees to allow the Developer,

its agent and servants to enter the Land together with its tools implement and

equipment and the sole and exclusive rights to develop the Land at its own cost and

expense and in various stages or phases thereof and in such manner as the Developer

in its absolute discretion deem appropriate, and to commence, complete and to market

the Development and to collect all sales revenue therefrom in accordance with the

approved Layout Plans and Building Plans and such other plans or any amendment(s)

thereof as may be approved by the relevant authorities but subject always to the terms

and conditions of the JVA.

4.2 Proprietor’s and Developer’s Entitlement

The Proprietor shall be entitled to the Proprietor’s entitlement and the Developer shall

be entitled to the Developer’s entitlement as stated in the JVA.

4.3 Matters related to the Development

(i) The JVA is made in subject to the approved Building Plans and Layout Plans

known as Taman Gading, Batu Gajah, provided always that the Developer

shall be entitled from time to time and at any given time to make any

alteration, amendment, variation or modification to the approved Building

Plans and/or Layout Plans relating to the Development but subject to the terms

and conditions of the JVA.

(ii) The Proprietor shall procure a written consent from PABG to allow the

Developer to take over the development of the Project and shall assist in

procuring the development order from the relevant authority to enable the

Developer to commence the Development on the Land provided always that

the Proprietor shall authorise and/or assist the Developer to act on its behalf

to obtain the approved Layout Plans and Building Plans from the relevant

authority and all the costs incurred shall be borne by the Developer.

(iii) Subject to the approved Building Plans and/or Layout Plans for the

Development and compliance with the requirements of the relevant

authorities, the Developer shall commence, construct and complete on the

Land such number of residential units in accordance with approval of the

relevant authorities.

(iv) The Developer shall have the sole discretion to decide the date of

commencement of the Development provided that all the requisite consent and

development order have been obtained.

(v) The Developer shall have the sole and absolute discretion as to the design,

quality, specifications, style and price of the properties of the Development

scheme.

(vi) The Developer acknowledges and agrees with the Proprietor that it shall carry

out the development works subject to the following: -

(a) The Developer shall ensure that the development works are carried out

in accordance with the Building Plans and the Layout Plans,

specifications and the various provisions of the JVA and in total

compliance with all the terms and conditions imposed or to be imposed

by the authorities from time to time. In the event that the authorities

rejecting any of the plans or approving the same subject to certain

amendments being made such rejection or conditional approval shall not

vitiate the JVA in any way whatsoever and the Developer shall forthwith

prepare alternative or amended plans as the case may be for submission

to the authorities for approval.

(b) The Developer shall comply with all development and construction laws

applicable from time to time and at any time.

(vii) The Developer shall not be allowed to charge the Land to any persons and/or

financial institution for financing.

4.4 Removal of Caveat

(i) The Proprietor shall cause the Caveator to deposit letter of confirmation with

the Developer’s Solicitors confirming the final amount owed by the Proprietor

to the Caveator and undertaking that they shall have no claim whatsoever on

the Land upon settlement of the amount owing to the Caveator;

(ii) The Proprietor shall cause the Caveator to deposit duly executed withdrawal of

caveat form with the Proprietor’s Solicitors as stakeholders, with authority to

release the said withdrawal forms to the Developer’s Solicitors upon the receipt

of the letter of undertaking from Developer to pay the Proprietor a sum of

RM37,324.00 per title as stated in the JVA.

4.5 Proprietor’s Entitlement

The Proprietor shall be entitled to a total sum of RM8,000,000.00 only that shall be

derived from the gross sale proceed and which shall be paid in the following manners.

4.6 Deposit and Payments

(i) Upon the execution of the JVA, the Developer shall pay to the Proprietor a

sum of RM50,000.00 Only [“Deposit”] by way of deposit and part payment

towards the Proprietor’s Entitlement made in advance from the Developer to

the Proprietor;

(ii) The Developer shall pay to the Proprietor a further sum of RM3,200,000.00

only as part payments towards Proprietor’s entitlement within 12 months from

the date of the JVA;

(iii) The Developer shall pay to the Proprietor a further sum of RM3,200,000.00

only as part payments towards Proprietor’s entitlement within 24 months from

the date of the JVA;

(iv) The Developer undertakes to pay to the Proprietor the balance sum of

RM1,550,000.00 due to the Proprietor within 36 months from the date of the

JVA.

(v) The Deposit and payments paid pursuant to the above shall be treated and

deemed to be part and/or full settlement of the Proprietor’s Entitlement. In

calculating the Proprietor’s Entitlement, the Proprietor’s Entitlement shall be

adjusted by setting off or deducting the Deposit paid by the Developer to or

on behalf of the Proprietor.

4.7 Proprietor’s Land Cost

The Proprietor’s Entitlement shall be inclusive of the land costs amounting to

RM30,000.00 per lot and therefore, in respect of the development falling within the

Housing Developers (Control and Licensing) Act 1966, the Developer undertakes to

pay to the Proprietor the said sum as land costs per housing unit sold from the

Developments scheme within fourteen (14) days of receipt of payments into the

Housing Development Account from the end-financier of the progress claims by the

Developer against the end-purchasers.

4.8 Director Guarantee

Simultaneously upon the signing of the JVA, the Developer shall secure and provide

the personal guarantee by its director, Loo Leep Chye for the payment of the

Proprietor’s Entitlement (including the land costs as stipulated in the JVA) in the

event the Developer default in payment to the Proprietor.

4.9 Interest

(i) In the event the Developer fails to pay any part of the Proprietor’s Entitlement

in accordance with the time frame stipulated in the JVA, the Developer shall

pay to the Proprietor interest at the rate of 8% per annum calculated on a

monthly basis for every month on such part of the Proprietor’s Entitlement

which had become due to the Proprietor, commencing from the day next

following the due date of payment of such part of the Proprietor’s Entitlement

until full payment of such sum which has become due.

(ii) The provision of interest on late payment shall not mean or to be construed as

or be deemed to amount to the allowance of an indefinite extension by the

Proprietor to the Developer to pay to the Proprietor the Proprietor’s

Entitlement and the Developer shall make all payments comprising the

Proprietor’s Entitlement in accordance with the provision of the JVA provided

always the Proprietor shall be at liberty to terminate the JVA in the event that

the Developer default in the payment of such sum after the expiry of 3 months

from the stipulated date of payment.

4.10 The Developer’s Entitlement/Units

(i) The Developer shall be entitled to all the residential units developed on the

Land under the Development (“Developer’s Entitlement”) and shall be at

liberty to deal with all the Developer’s entitlement as it deems reasonable and

proper.

4.11 Sale of the Land

(i) The Developer shall be entitled to officially launch for sale the Land, whether

in a single phase or in multiple phases, to the general public and receive all

the sale proceeds from such sale upon such terms and conditions as the

Developer shall deem reasonable and the Developer shall execute the sale

and purchase agreements (SPA) or any such agreements and/or transfers in

relation thereto as the attorney for the Proprietor.

(ii) Subject to the terms and conditions of the JVA and subject to the compliance

of all obligations and undertakings by the Developer in accordance with the

JVA, the Proprietor consents to the sale of the Land by the Developer in such

manner as the Developer shall deem fit and the Developer shall have full

discretion: -

(a) in the marketing and advertisement for sale of the Land; and

(b) in determining the purchase price and discount for each of the

Developer’s Entitlement and such purchase price may also be varied

from time to time by the Developer in its sole discretion shall deem fit.

(iii) The Proprietor in compliance with the Housing Development (Control and

Licensing) Regulations 1989, hereby:

(a) agrees to the sale of the Lands for the purpose of housing development

concerned herein; and

(b) undertakes to abide by the provisions of Regulations 10 and 11 of the

Housing Developers (Control and Licensing) Regulations 1989.

4.12 Power of Attorney

(i) The Proprietor shall grant a power of attorney to the Developer to allow the

Developer to act as the attorney of the Proprietor to, inter alia,

(a) to sign and deliver all Building Plans, Layout Plans, applications and

any other documents in connection with the Development and/or the

Land or any part thereof and/or in order to apply and obtain the relevant

requisite consent;

(b) to sign and/or submit all Building Plans and/or Layout Plans or any

documents in relation thereto including the alterations, amendments,

variations or revision thereof;

issuance of the certificate of compliance and completion to the

residential units by the authorities;

(d) to execute and sign the SPA and/or any such agreements and/or any

deed of assignments and/or transfers and/or all documents for consents

in relation thereto with individual end purchasers of the Developer’s

Units.

(ii) The Developer undertakes to exercise the Power of Attorney granted by the

Proprietor to the Developer for the purposes of the Development in

accordance with the terms and conditions of the JVA, to carry out the

development works including making applications for the relevant approvals

and to carry out and perform such other acts and obligations of the Proprietor

in accordance with the provisions of the JVA.

5. FINANCIAL EFFECTS ON PRG

5.1 Share Capital and Substantial Shareholders’ Shareholdings

The JVA will not have any effect on the share capital and substantial shareholders’

shareholdings of the Company.

5.2 Earnings and Net Assets

The JVA will not have any material effect on the earnings or net assets of PRG and

its subsidiaries for the financial year ending 31 December 2021.

5.3 Gearing

The JVA will not have any effect on the gearing of PRG.

6. RATIONALE

As the Developer has all the necessary knowledge, expertise and experience in the field of

property development and related business and is able to provide technical, commercial,

financial and management expertise, the Board believes the Develop is suitable and in better

position to undertake and complete the development of the Land.

7. RISK FACTORS

The Proposed Joint Venture is subject to the terms and conditions of the JVA. There is no

assurance that the Proposed Joint Venture will not be exposed to risks such as termination

of the JVA and inability to fulfil the terms and conditions of the JVA apart from the risks

inherent in the property development industry.

The Board will endeavour to take all necessary steps to ensure that the terms and conditions

of the JVA which are within the control of the Group are met on a timely basis and will take

necessary steps to mitigate the risks as and when arises.

8. APPROVALS REQUIRED

The JVA is not subject to the approval of PRG’s shareholders.

9. INTERESTS OF DIRECTORS, MAJOR SHAREHOLDERS AND/OR PERSONS

CONNECTED WITH THEM

None of the Directors and/or major shareholders of PRG and/or persons connected with

them has any interest, direct or indirect, in the JVA.

10. STATEMENT BY DIRECTORS

Having considered all the relevant aspects including the rationale and benefits of the

Proposed Joint Venture, the Board is of the opinion that the JVA is in the best interest of

PRG Group.

11. HIGHEST PERCENTAGE RATIO APPLICABLE PURSUANT TO PARAGRAPH

10.02(G) OF BURSA MALAYSIA SECURITIES BERHAD MAIN MARKET

LISTING REQUIREMENTS

The highest percentage ratio applicable to the JVA pursuant to paragraph 10.02(g) of Bursa

Malaysia Securities Berhad’s Main Market Listing Requirements is 5.04%.

12. DOCUMENTS AVAILABLE FOR INSPECTION

A copy of the JVA is available for inspection at the registered office of the Company at

Suite 11.1A, Level 11, Menara Weld, 76 Jalan Raja Chulan, 50200 Kuala Lumpur during

normal office hours from Monday to Friday (except public holidays) for a period of 3

months from the date of this announcement.

This announcement is dated 30 March 2021.