Issuance of Bonds by Subsidiary, CNA Development Pte Ltd (CNAD) (Issuance of Bonds)

NOVA MSC BERHAD
11 Aug 2017

In response to the query from Bursa Malaysia Berhad dated 2 August 2017 which Nova MSC Berhad (“Company”) had received on 10 August 2017 in relation to the announcement dated 1 August 2017 in respect of the issuance of bonds by subsidiary, CNA Development Pte Ltd (“CNAD”) , the Company wishes to respond as follows:

1. Percentage of shareholding by Nova MSC Berhad in CNAD currently and after the Initial Public Offering (“IPO”) of CNAD and full conversion of the Bonds.

The Company currently holds a 51% interest in CNAD. As at the date of this announcement, there is no announceable IPO plan for CNAD. As such, the percentage of the Company after the IPO and full conversion of the Bond is not determinable.

2. The net profits and net assets of CNAD based on its latest audited financial statements.

Based on CNAD’s latest audited financial statements, CNAD has a net profit of S$ 522,066 and net assets of S$2,920,054.

3. Principal business of CNAD

The principal business of CNAD are those relating to the provision, design and implementation of integrated control and automation systems and information technology solutions for buildings and facilities and the provision of engineering maintenance services.

4. Details of the Initial Public Offering of CNAD and date on which it will listed on SGX.

As at the date of this announcement, there is no firm plan for an IPO of CNAD.

The Group will, from time to time, explore opportunities complementary to the Group’s business, including engaging in discussions with prospective parties in fund raising and others. However, such discussion may not result in any definitive agreements whatsoever been signed.

The Company will make proper disclosure of its corporate exercises in accordance with the listing requirements at appropriate times.

5. Term of payment by the subscribers for the bonds.

The subscribers shall remit the aggregate subscription price in respect of the bonds being issued on the completion date to CNAD, by way of electronic transfer to such account(s) designated by the CNAD in writing (or such other way as the Parties may agree in writing) in immediately clear and available funds as payment for the subscription of such Bonds.

6. The ranking of CNAD new shares arising from the conversion of the Bonds

In the event of a conversion of the bond, the new shares, when issued and delivered in the manner contemplated by the terms and conditions and the Bond Agreement, will be duly authorised by CNAD and will be duly and validly issued and fully-paid, and will rank pari passu with the other shares then outstanding.

7. The basis for the conversion ratio of the Bond of 1:1.3.

The conversion ratio was negotiated between CNAD and the subscribers, and was arrived at on a willing-seller willing-buyer basis.

8. Details of utilization of proceeds arising from the Issuance of Bonds for operating and administrative overhead, and other professional services: the breakdown thereof and timeframe for full utilization of proceeds.

Working capital

Operating and administrative overhead S$1,000,000
Professional services (for new projects) S$1,000,000

The proceeds are expected to be utilized within the next 12 months.

9. Expected timeframe to issue the Bonds.

The bond is expected to be issued in August 2017.

10. The redemption period and redemption rate of the Bonds.

The Bond will be redeemed at maturity date, which is the date falling three (3) years after the date of issue of such bond, at the principal amount.

11. The interest rate payable on the Bonds.

Interest shall accrue on the Bond at the rate of three (3) per cent per annum on the Bond balance outstanding amount until all the Bonds are either fully converted or redeemed.

This announcement is dated 11 August 2017.