THIS CIRCULAR IS IMPORTANT AND REQUIRES YOUR IMMEDIATE ATTENTION.
If you are in doubt as to the course of action to be taken, you should consult your stockbroker, bank manager, solicitor, accountant or other professional adviser immediately.
Bursa Malaysia Securities Berhad ("Bursa Securities") has not perused this circular to shareholders (the "Circular") prior to its issuance as it is prescribed as an exempt circular pursuant to Practice Note 18 of the Main Market Listing Requirements of Bursa Securities.
Bursa Securities takes no responsibility for the contents of this Circular, makes no representation as to its accuracy or completeness and expressly disclaims any liability whatsoever for any loss howsoever arising from or in reliance upon the whole or any part of the contents of this Circular.
IOI CORPORATION BERHAD
Company Registration No. 196901000607 (9027-W)
(Incorporated in Malaysia)
Part A
SHARE BUY-BACK STATEMENT
IN RELATION TO THE
PROPOSED RENEWAL OF EXISTING SHARE BUY-BACK AUTHORITY
AND
Part B
CIRCULAR TO SHAREHOLDERS
IN RELATION TO THE
PROPOSED RENEWAL OF SHAREHOLDERS' MANDATE FOR RECURRENT RELATED
PARTY TRANSACTIONS OF A REVENUE OR TRADING NATURE
The resolutions in respect of the proposals will be tabled at the Fifty-Fifth Annual General Meeting ("55th AGM") of IOI Corporation Berhad ("IOI" or the "Company") which will be convened and held physically (Physical Meeting) at Millennium Ballroom 1 (Level 1), Le Méridien Putrajaya, Lebuh IRC, IOI Resort City, 62502 Putrajaya, Malaysia ("Meeting Venue") and by way of electronic means (Virtual Meeting) using Remote Participation and Electronic Voting facilities to be hosted at https://conveneagm.my/ioicorpagm2024 (Domain Registration No. D6A475992) on Tuesday, 5 November 2024 at 10:00 am (Malaysia time). Shareholders are advised to refer to the Notice of the 55th AGM of the Company together with the Proxy Form and Administrative Guide, which can be . downloaded from the Company's website at http://www.ioigroup.com/integrated- report/2024/#downloads
The Proxy Form should be lodged at the office of the Administration and Polling Agent, KPMG Management & Risk Consulting Sdn Bhd ("KPMG MRC"), either by electronic means via the ConveneAGM Meeting Platform at https://conveneagm.my/ioicorpagm2024 or via email to support_conveneagm@kpmg.com.my or by hand or post to the office of KPMG MRC at Concourse, KPMG Tower, No. 8, First Avenue, Bandar Utama, 47800 Petaling Jaya, Selangor Darul Ehsan, Malaysia not less than 48 hours before the time stipulated for holding the meeting. The lodging of the Proxy Form will not preclude you from participating and voting at the 55th AGM should you subsequently wish to do so.
Shareholders are advised to refer to the steps set out in the Administrative Guide in order to pre- register, participate and vote at the 55th AGM.
Last date and time for lodging the Proxy Form | : Sunday, 3 November 2024 at 10:00 am |
Date and time of the 55th AGM | : Tuesday, 5 November 2024 at 10:00 am |
This Circular is dated 7 October 2024
DEFINITIONS
Except where the context otherwise requires, the following definitions shall apply throughout this Circular:-
"Act" | : | The Companies Act, 2016 as amended from time to time and |
any re-enactment thereof | ||
"AGM" | : | Annual General Meeting |
"Board" | : | The Board of Directors of IOI |
"Bursa Securities" | : | Bursa Malaysia Securities Berhad |
"CMSA" | : | Capital Markets and Services Act, 2007 as amended from |
time to time and any re-enactment thereof | ||
"CPO" | : | Crude palm oil |
"Dato' Lee" | : | Dato' Lee Yeow Chor |
"Director(s)" | : | In accordance with Paragraph 10.02(c) of the Listing |
Requirements, a Director shall have the meaning in Section | ||
2(1) of the CMSA and for the purpose of the Proposed | ||
Renewal of Shareholders' Mandate, includes any person who | ||
is or was within the preceding 6 months of the date on which | ||
the terms of the transaction were agreed upon, a Director of | ||
IOI, its subsidiary or holding company, or a chief executive of | ||
IOI, its subsidiary or holding company | ||
"DJW" | : | Datin Joanne Wong Su-Ching |
"EPF" | : | Employees Provident Fund Board |
"EPS" | : | Earnings per Share |
"FFB" | : | Fresh fruit bunches |
"FYE" | : | Financial year ended/ending, as the case may be |
"IOI" or the "Company" | : | IOI Corporation Berhad |
"IOI Group" | : | IOI and its subsidiaries, collectively |
"IOIPG" | : | IOI Properties Group Berhad |
"IOIPG Group" | : | IOIPG and its subsidiaries, collectively |
"Listing Requirements" | : | Main Market Listing Requirements of Bursa Securities as |
amended from time to time and any re-enactment thereof | ||
"LPD" | : | 30 August 2024, being the latest practicable date prior to the |
issuance of this Circular | ||
"LYS" | : | Lee Yeow Seng |
"LY Ling" | : | Lee Yoke Ling |
"LY Har" | : | Lee Yoke Har |
"LY Hean" | : | Lee Yoke Hean |
i |
DEFINITIONS (CONT'D)
"LY Hui" | : | Lee Yoke Hui | |
"Major Shareholder(s)" | : | A person who has an interest or interests in one or more | |
voting shares in a corporation and the number or aggregate | |||
number of those shares, is:- | |||
a) | 10% or more of the total number of voting shares in the | ||
corporation; or | |||
b) | 5% or more of the total number of voting shares in the | ||
corporation where such person is the largest | |||
shareholder of the corporation | |||
For the purpose of the Proposed Renewal of Shareholders' | |||
Mandate, Major Shareholder includes any person who is or | |||
was within the preceding 6 months of the date on which the | |||
terms of the transaction were agreed upon, a major | |||
shareholder of the Company or any other company which is its | |||
subsidiary or holding company | |||
For the purpose of this definition, "interest" shall have the | |||
meaning of "interest in shares" given in Section 8 of the Act | |||
"Market Day" | : | A day on which Bursa Securities is open for trading in | |
securities | |||
"NA" | : | Net Assets | |
"Parties Deemed Acting In | : | The persons who are presumed to be acting in concert with | |
Concert" | PHSB pursuant to the Rules:- | ||
i. | Dato' Lee, being a deemed Major Shareholder of IOI, a | ||
Director and Major Shareholder of PHSB and the | |||
brother of LYS; | |||
ii. | LYS, being a deemed Major Shareholder of IOI, a | ||
Director and Major Shareholder of PHSB and the | |||
brother of Dato' Lee; and | |||
iii. | Such other person(s) connected to them pursuant to | ||
the Rules | |||
"PHSB" | : | Progressive Holdings Sdn Bhd, a person connected to Dato' | |
Lee and LYS, and the ultimate holding company of the | |||
Company | |||
"Proposed Renewal of | : | Proposed renewal of the existing authority granted to the | |
Existing Share Buy-Back | Company to purchase up to 10% of its own Share(s) as | ||
Authority" | detailed in the Share Buy-Back Statement | ||
"Proposed Renewal of | : | Proposed renewal of the existing shareholders' mandate for | |
Shareholders' Mandate" | IOI Group to enter into RRPT(s) as detailed in Part B of this | ||
Circular | |||
"Purchased Shares" | : | IOI Shares that are purchased pursuant to the proposed | |
share buy-back |
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DEFINITIONS (CONT'D)
"Related Party(ies)" | : | A Director, Major Shareholder or a person connected to such |
Director or Major Shareholder as defined under Paragraph | ||
1.01 of the Listing Requirements | ||
"RM" and "sen" | : | Ringgit Malaysia and sen respectively |
"RRPT(s)" | : | Recurrent related party transaction(s) of a revenue or trading |
nature which are necessary for the day-to-day operations and | ||
are entered into in the ordinary course of business by IOI | ||
Group which involves the interest, direct or indirect, of a | ||
Related Party | ||
"Rules" | : | Rules on Take-Overs, Mergers and Compulsory Acquisitions |
as amended from time to time and any re-enactment thereof | ||
"Share(s)" or "IOI Share(s)" | : | Ordinary share(s) in IOI |
"Treasury Shares" | : | The Purchased Shares which are retained by the Company |
and shall have the meaning under Section 127 of the Act | ||
"VCSB" | : | Vertical Capacity Sdn Bhd, a person connected to Dato' Lee |
and LYS, and the ultimate holding company of IOIPG. | ||
"WAMP" | : | Weighted average market price |
Words importing the singular shall, where applicable, include the plural and vice versa and words importing the masculine gender shall, where applicable, include the feminine and neuter genders and vice versa. Reference to persons shall include corporations, unless otherwise specified.
Any reference in this Circular to any enactment is a reference to that enactment as for the time being amended or re-enacted. Any reference to a time of day in this Circular shall be a reference to Malaysian time, unless otherwise stated.
iii
TABLE OF CONTENTS
PART A: | PROPOSED RENEWAL OF EXISTING SHARE BUY-BACK AUTHORITY | PAGE |
1. | INTRODUCTION | 1 |
2. | DETAILS OF THE PROPOSED RENEWAL OF EXISTING SHARE BUY-BACK AUTHORITY | 1 |
3. | SOURCE OF FUNDS | 2 |
4. | RATIONALE FOR THE PROPOSED RENEWAL OF EXISTING SHARE BUY-BACK AUTHORITY | 3 |
5. | POTENTIAL ADVANTAGES AND DISADVANTAGES OF THE PROPOSED RENEWAL OF | 3 |
EXISTING SHARE BUY-BACK AUTHORITY | ||
6. | IMPLICATIONS RELATING TO THE RULES | 4 |
7. | PUBLIC SHAREHOLDING SPREAD | 5 |
8. | HISTORICAL SHARE PRICES | 5 |
9. | EFFECTS OF THE PROPOSED RENEWAL OF EXISTING SHARE BUY-BACK AUTHORITY | 5 |
10. | PURCHASE, RESALE, TRANSFER OR CANCELLATION OF TREASURY SHARES MADE IN | 7 |
THE PRECEDING 12 MONTHS | ||
11 | DIRECTORS' AND SUBSTANTIAL SHAREHOLDERS' SHAREHOLDINGS | 7 |
12. | CONDITIONS TO THE PROPOSED RENEWAL OF EXISTING SHARE BUY-BACK AUTHORITY | 10 |
13. | DIRECTORS' AND/OR MAJOR SHAREHOLDERS' INTERESTS AND/OR PERSON(S) | 10 |
CONNECTED | ||
14. | DIRECTORS' RECOMMENDATION | 10 |
15. | FURTHER INFORMATION | 10 |
PART B: PROPOSED RENEWAL OF SHAREHOLDERS' MANDATE FOR RECURRENT RELATED PARTY TRANSACTIONS OF A REVENUE OR TRADING NATURE
1. | INTRODUCTION | 12 |
2. | DETAILS OF THE PROPOSED RENEWAL OF SHAREHOLDERS' MANDATE | 13 |
3. | CATEGORIES OF RRPT(S) | 15 |
4. | INFORMATION ON RRPT(S), TRANSACTING PARTIES AND NATURE OF TRANSACTIONS | 15 |
5. | AMOUNT DUE FROM AND OWING TO RELATED PARTIES PURSUANT TO THE RRPT(S) | 16 |
6. | REVIEW PROCEDURES FOR THE RRPT(S) | 16 |
7. | THRESHOLD OF AUTHORITY | 17 |
8. | STATEMENT FROM THE AUDIT AND RISK MANAGEMENT COMMITTEE | 17 |
9. | RATIONALE AND BENEFITS OF THE PROPOSED RENEWAL OF SHAREHOLDERS' | 17 |
MANDATE | ||
10. | EFFECTS OF THE PROPOSED RENEWAL OF SHAREHOLDERS' MANDATE | 18 |
11. | APPROVAL REQUIRED | 18 |
12. | DIRECTORS' AND/OR MAJOR SHAREHOLDERS' INTERESTS AND/OR PERSON(S) | 18 |
CONNECTED | ||
13. | DIRECTORS' RECOMMENDATION | 19 |
14. | AGM | 19 |
15. | FURTHER INFORMATION | 20 |
iv
TABLE OF CONTENTS (CONT'D)
APPENDIX I | FURTHER INFORMATION | 21 |
APPENDIX II | EXTRACT OF THE NOTICE OF 55TH AGM | 22 |
THE REST OF THIS PAGE IS INTENTIONALLY LEFT BLANK
v
PART A:
PROPOSED RENEWAL OF EXISTING SHARE BUY-BACK AUTHORITY
IOI CORPORATION BERHAD
Company Registration No. 196901000607 (9027-W)
(Incorporated in Malaysia)
PART A: SHARE BUY-BACK STATEMENT IN RELATION TO THE PROPOSED RENEWAL OF EXISTING SHARE BUY-BACK AUTHORITY
-
INTRODUCTION
At the last AGM of the Company held on 27 October 2023, the shareholders of the Company had approved the renewal of the authority for the Company to purchase up to 10% of its own Shares.
The above shareholders' approval for the Company to purchase its own Shares is subject to annual renewal and will lapse at the conclusion of the forthcoming 55th AGM unless such authority is renewed by an ordinary resolution passed at the forthcoming 55th AGM.
On 11 September 2024, the Board had announced its intention to seek the approval of the shareholders of the Company for the Proposed Renewal of Existing Share Buy-Back Authority.
The Notice of the forthcoming 55th AGM and the Proxy Form are enclosed in the Annual Report 2024 of the Company, which can be downloaded from the Company's website at http://www.ioigroup.com/integrated-report/2024/#downloads.
SHAREHOLDERS OF IOI ARE ADVISED TO READ THE CONTENTS OF THIS STATEMENT TOGETHER WITH THE APPENDICES IN THIS CIRCULAR BEFORE VOTING ON THE RESOLUTION PERTAINING TO THE PROPOSED RENEWAL OF EXISTING SHARE BUY-BACK AUTHORITY. - DETAILS OF THE PROPOSED RENEWAL OF EXISTING SHARE BUY-BACK AUTHORITY
The Board proposes to seek renewal of the authority to purchase up to 10% of the total number of issued Shares of the Company as quoted on Bursa Securities at the point of purchase, subject to compliance with the provisions of the Act, the Listing Requirements and/or any other relevant authorities.
The renewal on existing share buy-back authority, if approved by the shareholders at the forthcoming 55th AGM, will be effective immediately upon the passing of the ordinary resolution at the forthcoming 55th AGM and the authority conferred under the Proposed Renewal of Existing Share Buy-Back Authority shall continue to be in force until:- - the conclusion of the next AGM of the Company at which time the authority shall lapse unless by ordinary resolution passed at that general meeting, the authority is renewed either unconditionally or subject to conditions; or
- the expiration of the period within which the next AGM after that date is required by law to be held; or
1
- revoked or varied by ordinary resolution passed by the shareholders in a general meeting,
whichever occurs first.
The Company did not purchase any Shares from the open market in FYE 30 June 2024. As at LPD, the total number of issued Shares of the Company stood at 6,285,198,995 Shares. As such, subject to the approval of the shareholders, the Company may purchase up to 628,519,899 Shares (inclusive of 81,501,700 Treasury Shares) pursuant to the Proposed Renewal of Existing Share Buy-Back Authority. The Treasury Shares against the total number of issued Shares of the Company as at LPD was 1.30%.
The Directors may deal with the Purchased Shares in the following manner:-
- cancel the Shares so purchased; or
- retain the Shares so purchased as Treasury Shares, which may be distributed as dividends to the shareholders and/or be resold on the market of Bursa Securities and/or be transferred for the purposes of or under an employees' share scheme and/or be transferred as purchase consideration and/or be cancelled subsequently; or
- retain part of the Shares so purchased as Treasury Shares and cancel the remainder; or
- deal with the Shares in any other manner as may be permitted by the applicable laws and/or regulations in force from time to time.
The Shares to be purchased pursuant to the Proposed Renewal of Existing Share Buy- Back Authority shall be at prices not exceeding 15% above the WAMP of the Shares for the 5 Market Days immediately prior to the purchase.
The Treasury Shares arising from the share buy-back, including those Shares that have been bought back as at the date of this Circular, may be resold on the market or transferred pursuant to Section 127(7) of the Act, if so determined by the Board, at:-
- a price which is not less than the WAMP of the Shares for the 5 Market Days immediately before the resale or transfer; or
- a discounted price of not more than 5% to the WAMP of the Shares for the 5 Market Days immediately before the resale or transfer provided that:-
- the resale or transfer takes place not earlier than 30 days from the date of purchase; and
- the resale or transfer price is not less than the cost of purchase of the Shares being resold or transferred.
3. SOURCE OF FUNDS
The proposed purchase by the Company of its own Shares shall be financed through internally generated funds and the maximum amount of funds allocated shall not exceed the sum of the retained earnings of the Company based on the audited financial statements for FYE 30 June 2024.
The actual number of Shares to be purchased, the total amount of funds to be utilised, impact on cash flows as well as the timing of the proposed purchase by the Company of its own Shares will be dependent on amongst others, the market conditions, sentiments of the stock market and the available financial resources of the Company at the time of purchase(s).
2
Based on the audited financial statements for FYE 30 June 2024, the retained earnings of the Company were RM6,944.7 million. The Company will ensure that the total amount of retained earnings of the Company will be sufficient to effect the proposed share buy-back.
-
RATIONALE FOR THE PROPOSED RENEWAL OF EXISTING SHARE BUY-BACK AUTHORITY
The rationale for the Proposed Renewal of Existing Share Buy-Back Authority is as follows:- - The Company may be able to reduce any unwarranted volatility of its Shares and assist to stabilise the supply, demand and price of its Shares in the open market, thereby supporting the fundamental value of its Shares;
- The proposed share buy-back is expected to enhance the value for shareholders from the resultant reduction in the number of Shares in the open market. Assuming all things being equal, the EPS of IOI Group may be enhanced as the consolidated earnings would be divided by a reduced number of Shares. This is expected to have a positive impact on the market price of IOI Shares which will benefit the shareholders; and
- The Purchased Shares can also be retained as Treasury Shares and resold on Bursa Securities at a higher price. The distribution of Treasury Shares as share dividends (if any) will also reward the shareholders as it would increase the number of Shares held which can subsequently be resold in the open market. Alternatively, the Treasury Shares can be transferred for purposes of or under the employees' share scheme of the Company or such other purposes as allowed under the Act.
-
POTENTIAL ADVANTAGES AND DISADVANTAGES OF THE PROPOSED RENEWAL OF EXISTING SHARE BUY-BACK AUTHORITY
5.1 Potential advantages
The potential advantages are as follows:-- Enables the Company to take preventive measures against speculative activities particularly when the Shares are undervalued which may in turn stabilise the market price and hence, enhance investors' confidence;
- Enables the Company to utilise its financial resources more efficiently especially where there is no immediate use. Any subsequent cancellation of the Shares purchased may strengthen the consolidated EPS of IOI Group, which in turn have a positive impact on IOI share prices;
- Provides the Company with opportunities for potential gains if the Treasury Shares are subsequently resold at prices higher than the purchase price; and
- In any event, the Treasury Shares may also be distributed as share dividends to the shareholders as a reward.
3