What? What is Top Glove Trying To Do???

Posted on the Edge.

• Top Glove to acquire tycoon’s building Business & Markets 2013
  Written by Madiha Fuad of theedgemalaysia.com
  Wednesday, 06 March 2013 08:54
  
  KUALA LUMPUR: Top Glove Corp Bhd will acquire a three-year-old building located in Jalan Tun Razak here from tycoon Tan Sri Law Tien Seng for RM226 million.
  However, the transaction will be done through Value Add Sdn Bhd, a company that is at present controlled by Top Glove executive chairman Tan Sri Lim Wee Chai and executive director Lim Hooi Sin (HS Lim).
  
  In an announcement yesterday, detailing the two-step purchase, Top Glove has proposed to subscribe to ordinary shares and preference shares that will give it 27% in Value Add for RM12.2 million.
  
  Following that, Value Add proposes to acquire from TS Law Realty Sdn Bhd a commercial building known as East Wing of The Icon@Tun Razak for RM226 million.
  
  Top Glove will fund the the subscription via an internally generated fund.
  
  According to the announcement, Lim is chairman of Value Add and holds a 68% interest in the company while HS Lim has a 5% interest in Value Add.
  
  Lim has a 38.12% of direct and indirect interests in Top Glove while HS Lim has a 38.11% of direct and indirect interests in the glove producer.
  
  East Wing the Icon@Tun Razak has a gross built-up area of 278,182 sq ft.
  
  The first phase of the subscription to Value Add shares was completed on Feb 28, 2013 with 270,000 ordinary shares of RM1 and 5.8 million redeemable preference shares of RM1.
  
  TS Law Realty is an investment holding company with an authorised capital of RM5 million comprising five million shares of RM1 each. Law, who is a major shareholder of Hiap Tech Ventures Bhd, holds 80% of TS Law Realty while Puan Sri Saw Geok Ngor holds the remaining 20%.
  
  Top Glove said although the proposed transaction is a related party transaction it does not require shareholder approval because the materiality of the transaction is less than 5% of the percentage ratio threshold.
  The company, however, said Lim and HS Lim have abstained from all board deliberations on the matter.
  
  “The purchase consideration of the commercial property will be funded through a combination of borrowings and equity through subscription of shares in Value Add by its shareholders,” said Top Glove in its announcement.
  
  East Wing of The Icon@Tun Razak, which is built on freehold land, has a gross built-up area of 278,182 sq ft and a 98% occupancy rate.
  
  Top Glove said the acquisition would generate a higher return on its current investment and potential capital appreciation in the future.
  
  “The subscription and acquisition will not have a material effect on the earnings of the group for the financial year ending Aug 31, 2013 but is expected to contribute to the group’s earnings in the future,” it added.
  
  
  This article first appeared in The Edge Financial Daily, on March 6, 2013.

Buying properties????

226 Million?????

Investment or what?????

Related Party Transaction?????

Does not need shareholder approval?????