CONNECTED TRANSACTION The board of directors (the "Directors") of
Guoco Group Limited (the "Company") wishes to announce that First
Bedok Land Pte Ltd. ("FBL"), an indirect subsidiary of the Company,
proposes to award the Construction Contract (as defined below) (the "Transaction")
to Sim Lian - Guobena JV Pte Ltd. ("SL-Guobena"), a joint venture
company incorporated in Singapore in which Mr. Quek Leng Chan ("Mr.
Quek"), the chairman of the Company and chief executive officer of
First Capital Corporation Ltd ("FCC"), a 58 per cent. owned subsidiary
of the Company, has an indirect interest through his substantial shareholding
in Hong Leong Company (Malaysia) Berhad ("HLCM") which is a substantial
shareholder of the Company and FCC. FBL is a 80 per cent. owned subsidiary
of FCC, a company listed on the Stock Exchange of Singapore Limited. The construction contract is a "Design and Build"
contract (the "Construction Contract") for a 720-unit condominium
housing development project situated at a land of approximately 41,316
square metres known as Lot 3895 pt Mukim 28 URA Land Parcel 490 at Bedok
Reservoir Road in the District of Bedok, Singapore (the "Bedok Reservoir
Parcel"). The development of the Bedok Reservoir Parcel was awarded
to FCC by the Urban Redevelopment Authority of Singapore on 15th March,
1996. Design Link Architects ("Design Link") and Smallwood,
Reynolds, Stewart, Stewart & Associates Pte Ltd. ("Smallwood")
together have been selected as the architect and design consultant for
the Construction Contract. In consultation with FCC, Design Link and OTN
Building Cost Consultants Pte Ltd. ("OTN"), the cost consultants
and quantity surveyors appointed by FCC, short-listed a total of four contractors
and invited them to submit their quotations for the Construction Contract
in a Design and Build tender. Finally, the lowest quotation of S$149 million
was received from SL-Guobena. The terms of the Construction Contract will
cover a period of 36 months. It is expected that the construction will
be completed by April 2000. Payment to the contractor will be made against
the issue of architect's certificates for each stage of completion of construction.
Both Design Link and OTN recommended the Construction Contract to be awarded
to SL-Guobena as set out in their respective reports dated 11th October,
1996 and 2nd October, 1996. Based on Design Link's and OTN's recommendations,
FBL proposes to award the Construction Contract to SL-Guobena. Design Link,
Smallwood and OTN are independent third parties which are not connected
with the Directors, chief executive and substantial shareholders of the
Company or any of its subsidiaries or their respective associates (as defined
in the Rules Governing the Listing of Securities on The Stock Exchange
of Hong Kong Limited (the "Lising Rules")). The Directors consider
that the Transaction is on normal commercial terms and in the interests
of the Company and its shareholders as a whole. SL-Guobena is a joint venture company incorporated in
Singapore in which Guobena Sdn Bhd ("Guobena") and Sim Lian Construction
Co. (Pte) Ltd. ("Sim Lian") each has a 50 per cent. interest.
Guobena is a company in which HLCM, a substantial shareholder of the Company,
indirectly controls more than 35 per cent. of the voting rights at a general
meeting. Sim Lian is an independent third party which is not connected
with the Directors, chief executive and substantial shareholders of the
Company or any of its subsidiaries or their respective associates (as defined
in the Listing Rules). SL-Guobena has experience in undertaking and completing
large scale construction projects in Singapore including the project Loyang
Villas which has recently been completed and the project Westville in Jurong
which is progressing on schedule. Under the Listing Rules, the Transaction constitutes a
connected transaction for the Company and is therefore subject to, inter
alia, approval by shareholders of the Company other than Mr. Quek and his
associates (as defined in the Listing Rules) (the "Independent Shareholders")
at a special general meeting of the Company to be convened. Under the Companies Act (Cap. 50) of Singapore, the Transaction
is also subject to the approval by the shareholders of FCC other than Mr.
Quek and Guoco Investment Pte Ltd., a wholly owned subsidiary of the Company,
at an extraordinary general meeting of FCC to be convened on or around
25th April, 1997. An independent committee of the Directors comprising Messrs.
Sat Pal Khattar and Harry Wilkinson (the "Independent Board Committee")
will be formed to consider the Transaction and to advise the Independent
Shareholders in this regard. Pacific Challenge Capital Limited ("Pacific
Challenge") has been appointed to advise the Independent Board Committee
as to the fairness and reasonableness of the Transaction. A circular containing further details of the Transaction,
the opinions and advice of the Independent Board Committee and Pacific
Challenge, together with a notice to convene the Special General Meeting,
will be despatched to the shareholders of the Company as soon as practicable. Hong Kong, 21st April, 1997.
ANNOUNCEMENTS
< < Back to Announcements