BRAHIM’S HOLDINGS BERHAD
Type Announcement
Subject MEMORANDUM OF UNDERSTANDING
Description BRAHIM’S HOLDINGS BERHAD (“BRAHIM’S” OR THE “COMPANY”)
– MEMORANDUM OF UNDERSTANDING ENTERED BETWEEN BRAHIM’S HOLDINGS BERHAD AND CARPENTER BEEF PTY LTD
1. INTRODUCTION
The Board of Directors of the Company wishes to announce that the Company had on 2 December 2014 entered into a Memorandum of Understanding (“MOU”) with Carpenter Beef Pty Ltd (“CB”) for the purpose entering into a joint venture for the reasons as set out in Section 3(a) below.
2. INFORMATION ON CB
CB was incorporated in Australia, and is operating from Perth, Western Australia. CB supplies cattle to the live export trade and domestic beef to Australia’s supermarkets and supplies high and medium value beef to the major Asian markets.
3. SALIENT TERMS OF THE MOU
(a) Purpose of the MOU
CB is finalising the development of an abattoir (“Cataby Abattoir”) which is designed to meet all China, EU, USDA and Halal requirements. The plant will have a capacity of 100,000 carcasses per annum on a single shift basis, with a 400 head per day capacity. The first stage of completion will produce a 4-way cut facility. Upon additional CAPEX of AUD 15 million, the plant will be fully operational within 6 to 9 months from investment date (“Project”).
Brahim’s and CB (collectively referred to as the “Parties”) are desirous of entering into a business joint venture for the development of the Cataby Abattoir. The Parties have entered into the MOU to set out the broad framework for concluding a joint venture structure to formalize the said investment.
(b) The salient terms of the MOU, which include amongst others, are as follows:
(i) an investment by Brahim’s of 49% in the Cataby Abattoir project with the remaining held by CB. The Parties agree it is essential that the Project receives Jabatan Kemajuan Islam Malaysia’s endorsement and certification and that Brahim’s seeks to enable financial consolidation of the joint venture. In this regard, when it deems expedient to do so, CB will facilitate Brahim to allow majority control of at least 51% to enable performance of the above expectations;
(ii) Brahim’s to be the major off taker for the products produced by Cataby Abattoir;
(iii) CB shall be the responsible party to operate the Cataby Abattoir and overall program management of cattle as feedstock for the abattoir including sourcing, procurement, custom feeding and agistment/holding of cattle; and
(iv) future expansion opportunities to collaborate in breeding capabilities of high, medium and low value cattle, partnership in feedlot development, and management of farmland and open range cattle farming.
4. RATIONALE
The objective of the MOU is to form a joint venture to draw on the inherent competence and synergies of the respective parties revolving around Abattoir and feedlot development and new markets facilitated by Brahim’s supply chain. The MOU will allow Brahim’s to tap into the opportunity of co-owning the Cataby Abattoir, as a Halal Compliance abattoir, with CB as its partner.
5. EFFECT OF THE MOU
The MOU is not expected to immediately have material effects on the earnings per share, net assets per share, gearing, share capital and substantial shareholders’ shareholding of Brahim’s for the financial year ending 31 December 2014.
6. INTEREST OF MAJOR SHAREHOLDERS AND DIRECTORS
None of the directors and/or major shareholders of Brahim’s and/or persons connected to them have any interest, direct or indirect, in the MOU.
7. DIRECTOR’S STATEMENT
The Board of Directors of Brahim’s, having considered the rationale and terms of the MOU, is of the opinion that the MOU is in the best interest of the Company.
8. DOCUMENTS FOR INSPECTION
A copy of the MOU is available for inspection at the registered office of the Company located at 10th Floor, Menara Hap Seng, No. 1 & 3, Jalan P. Ramlee, 50250 Kuala Lumpur during normal business hours on Mondays to Fridays (except Saturdays, Sundays and Public Holidays) for a period of three (3) months from the date of this announcement.
This announcement is dated 2 December 2014.