|Description||JHM Consolidation Berhad (“JHM” or “the Company”) Profit Guarantee from the Vendors in respect of acquisition of 100% of the total issued shares in Mace Instrumentation Sdn Bhd|
JHM had on 28 September 2017 entered into the conditional share sale agreement (“SSA”) with Ong Hock Seong, Chan Huai Leng and Tan Land Ghee (collectively referred to as “Vendors”) for the acquisition of the 100% of the total issued shares in Mace Instrumentation Sdn Bhd (“MISB”). Pursuant to the terms and conditions of the SSA, the Vendors unconditionally and irrecoverably guarantee that the aggregate audited net profit after tax in respect of MISB for financial year ended 31 December 2018, 31 December 2019 and 31 December 2020 (“Aggregated Audited PAT”) shall be RM21,000,000 (“Profit Guarantee”).
As the Aggregated Audited PAT was recorded at RM17,536,206, there is a shortfall of RM3,463,794 (“Shortfall Amount”) in the profit guarantee provided by the Vendors.
Pursuant to the SSA, in the event the Aggregated Audited PAT is less than RM21,000,000, the Vendors shall within fourteen (14) business days upon the receipt of the audited financial statement for the financial year ended 31 December 2020 of MISB from JHM (“Due Date”) pay directly to MISB the Shortfall Amount.
Pursuant to the SSA, if the Aggregate Audited PAT is less than RM21,000,000 and the Vendors fail to pay all or part of the Shortfall Amount by the Due Date, the Company is irrevocably authorised by the Vendors at its sole discretion to instruct the Trustee (being the stockbroking company mutually agreed by JHM and the Vendors appointed by JHM to operate the securities account for the pledged shares pursuant to the terms and conditions of the SSA) to sell all or such portion of the pledged shares equivalent to the Shortfall Amount and to forward the sale proceeds of the pledged shares to MISB (“Forced Sale”).
The Company has on 28 May 2021 sent a copy of the audited financial statements for the financial year ended 31 December 2020 of MISB to the Vendors. JHM has requested the Vendors to pay the Shortfall Amount within fourteen (14) business days from 28 May 2021. In the event the Vendors fail to pay all or part of the Shortfall Amount by Due Date, JHM will accordingly instructs the Trustee to Force Sale the pledged shares.
This announcement is dated 28 May 2021.