News

On 13 March 2012, Auto Parts Holdings Sdn Bhd (“APH”), a wholly-owned subsidiary of APM Automotive Holdings Berhad (the “Company”) entered into a Termination Agreement dated 13 March 2012 (“Termination Agreement”) to terminate the Joint Venture Agreement dated 20 December 2006 as supplemented under a Supplemental Agreement dated 15 June 2007 (“JVA”), entered into between APH and PT. Mekar Armada Jaya (“PT. MAJ”) in relation to the joint-venture partnership in Indonesia through PT. APM Armada Suspension (“PT. AAS”) as a consequence of the Group’s acquisition from PT. MAJ of the remaining 20% shareholding in PT. AAS.

Under the JVA, APH and PT. MAJ set up PT. AAS to manufacture and sell automotive coil springs and multi-leaf springs for the Indonesian market. APH holds 80% of the total issued and paid-up share capital of PT. AAS while PT. MAJ holds the remaining 20%. By mutual agreement, PT. MAJ has disposed of its entire shareholding to APM Automotive International Ltd (“APMAI”), another wholly-owned investment holding subsidiary of the Company, at a negotiated price of Rupiah 16,342,318,480 or approximately US$1,814,900. The consideration for the 20% shareholding was based on (i) the investment cost of the 1.5 million shares each at nominal value of US$1.00 issued and paid-for by PT. MAJ and (ii) 20% of the premium of the value of the land owned and occupied by PT. AAS in Suryacipta Industrial City, Karawang, West Java. The valuation of the land was conducted by an independent valuer and the acquisition of the 20% shareholding by APMAI was funded internally.

The disposal/acquisition of the 20% shareholding in PT. AAS was approved by the Indonesian Investment Coordinating Board on 6 March 2012. With the acquisition by APMAI, PT. AAS is now ultimately owned by the Company which allows for complete autonomy in the operational decisions of PT. AAS.

Pursuant to the JVA, the joint-venture partnership shall terminate if either APH or PT. MAJ at any time as a result of a transfer of shares made in accordance with the JVA no longer holds any shares in PT. AAS. As a consequence of the disposal of the 20% shareholding by PT. MAJ to APMAI in PT. AAS and execution of the Termination Agreement, the JVA and other related agreements or arrangements hence are now terminated.

The Termination Agreement provides that both parties, i.e., APH and PT. MAJ do not have any claim or cause of action in whatever form against the other and PT. AAS, arising from or in connection with the JVA, and its execution constitutes the full and final settlement and release in respect of all matters under and arising out of any claims under the JVA.

The acquisition of the 20% shareholding by APMAI in PT. AAS and the termination of the JVA do not have a material effect on the earnings and net tangible assets of the Group for the financial year ending 31 December 2012. None of the directors and substantial shareholders of the Company have any interest, direct or indirect in the acquisition or termination of the JVA.

This announcement is dated 13 March 2012.