Bursa Announcements

The Board of Directors of Tan Chong Motor Holdings Berhad (“TCMH”) informs that the Group has incorporated a new subsidiary named INSPIRED MOTOR SDN BHD (“IMSB”) under the Companies Act, 1965 on 5 April 2011.

The particulars of IMSB are set out below:

Authorised capital  :     RM5.0 million

Paid-up capital       :     RM1,000/-

Shareholders         :     Edaran Tan Chong Motor Sdn Bhd (70%)

                                      Auto Dunia Sdn Bhd (30%)

Principal activity     :     Retailing of motor vehicles

Edaran Tan Chong Motor Sdn Bhd (“ETCM”), a wholly-owned subsidiary of TCMH incorporated on 12 December 1991, is involved in the trading and marketing of Nissan motor vehicles. It has an authorised and paid-up capital of RM350,000,000/- and RM328,000,000/- respectively.

Auto Dunia Sdn Bhd (“ADSB”) is a private limited company incorporated in Malaysia on 12 March 1982 under the Companies Act, 1965.  It has an authorised and paid-up capital of RM100,000/-. ADSB is involved in the importation and sale of motor vehicles, provision of workshop services and distribution of spare parts, engine oil and other automotive related products.  ADSB is an appointed dealer of ETCM for Nissan vehicles in Malaysia.

The eventual paid-up capital of IMSB will be RM2.5 million to be contributed by ETCM and ADSB in the proportion of 70:30.

Rationale for setting-up IMSB

ETCM and ADSB are looking at a proposed joint-venture to undertake retailing of Infiniti vehicles in Malaysia through IMSB.  Infiniti is a luxury automotive brand from Japan, renowned for its unique combination of inspired performance, attentive hospitality and unparalleled quality. ETCM and ADSB are currently in discussion with Infiniti Japan on the terms in respect of the proposed retailing of Infiniti vehicles in Malaysia.  The proposed retailing of Infiniti vehicles allows TCMH Group to enter into luxury vehicle business. 

The luxury vehicle segment accounts for approximately 2.4% of Malaysia’s Total Industry Volume of 605,156 units in 2010.  This segment has been growing in the past few years as more brands emerged, from 10,294 units sold in 2009 to 14,689 units in 2010, registering a substantial growth of 42%.  Sale of luxury vehicles is expected to grow in line with economic growth as the country moves towards a high income society by 2020. 

Directors’ and Major Shareholders’ Interests

Other than as disclosed below, none of the directors or major shareholders of TCMH Group or persons connected with them has any interest, direct or indirect, in the incorporation of IMSB:

(i)    Dato’ Tan Heng Chew and Mr Tan Eng Soon, directors and major shareholders of TCMH, have declared ADSB to be a body corporate associated with them under Section 122A of the Companies Act, 1965.

(ii)   Dato’ Tan Eng Hwa, a director of certain subsidiaries of TCMH and brother of Dato’ Tan Heng Chew and Mr Tan Eng Soon, is a director of ADSB.

(iii)  En Azman bin Badrillah, a director of certain subsidiaries of TCMH, is a director and substantial shareholder of ADSB.

(iv)  Dato’ Syed Alwi bin Tun Syed Nasir, a director of a subsidiary of TCMH, is a director and substantial shareholder of ADSB.

Dato’ Tan Heng Chew and Mr Tan Eng Soon have abstained from giving approval for the incorporation of IMSB.

Financial Effects

The incorporation of IMSB will not have any material effect on the earnings, net assets and gearing of TCMH Group for the current financial year ending 31 December 2011.

The highest percentage ratio applicable to ETCM’s contribution to the eventual paid-up capital of IMSB amounting to RM1.75 million pursuant to Paragraph 10.02(g) of the Main Market Listing Requirements is 0.12% based on the audited financial statements of TCMH for the financial year ended 31 December 2009. ETCM's contribution of RM1.75 million to the share capital of IMSB will be financed through internally generated funds.

Statement By Directors

The Board of Directors of TCMH (except for Dato’ Tan Heng Chew and Mr Tan Eng Soon) are of the opinion that the incorporation of Inspired Motor Sdn Bhd is in the best interest of TCMH.