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THE STRAITS TRADING COMPANY LIMITED ANNUAL REPORT 2011
NOTES TO THE FINANCIAL STATEMENTS
For the Financial Year Ended 31 December 2011
43 EVENTS AFTER THE BALANCE SHEET DATE
(a) On 5 March 2012, the Board of Directors of Malaysia Smelting Corporation Berhad (“MSC”) announced
that Asian Mineral Resources Limited (“AMR”), in which MSC currently holds 15.4% equity, has entered into
a share subscription agreement with Pala Investments Holdings Limited (“Pala”) whereby Pala will, subject
to the satisfaction of certain conditions precedent, subscribe for 71,666,667 new units via placement for a
total consideration of C$4,300,000. Each new unit will consist of one common share of AMR and one-half of
a common share purchase warrant (“Warrants”) with each whole Warrant carrying the right to subscribe one
common share at an exercise price of C$0.10 for a period of five years commencing on the closing date of the
transaction. This placement will enable AMR to sustain its operations and seek further funding to complete
the Ban Phuc Nickel/Copper Project in Vietnam.
Concurrently with the above, MSC has entered into a right of first refusal agreement whereby MSC has granted
Pala a right of first refusal over MSC’s shareholding in AMR which is currently 31,297,661 shares. Pala and
MSC have also entered into a voting and support agreement whereby MSC is unconditionally obligated to
vote its shares in favour of the transactions provided for in the subscription agreement of Pala entered into
with AMR in connection with the Pala subscription. Until the earlier of the date of closing or termination of the
Pala subscription and 6 July 2012, MSC will not be able to dispose of any of its shares or engage in activities
in furtherance of a transaction whereby a third party would acquire any shares of AMR.
Further, Pala has also entered into share purchase agreements with Sword Investments Private Limited, a
subsidiary of the Company, and Mellford Pte. Ltd, an affiliate of the Tecity group and thereby affiliates of MSC,
to purchase from them 49,481,600 issued common shares.
Upon completion of these transactions Pala will own 121,148,267 common shares representing 44.1% of AMR’s
outstanding share capital and 50.3% on a fully diluted basis after Pala has exercised the Warrants in full. MSC’s
shareholding in AMR would be diluted to 11.4% first and then upon exercise of Warrants by Pala to 10.1%.
(b) On 9 March 2012, MSC announced that it has entered into a strategic alliance agreement (“SAA”) with Optima
Synergy Resources Limited (“OSRL”) that would allow the latter to immediately subscribe up to 479,833,766
shares of US$0.01 each equivalent to 23% equity interest in Bemban Corporation Limited (“BCL”), the
penultimate holding company of PT Koba Tin (“PT Koba”).
Among others, the objectives and purposes of the SAA are as follows:
(i) Facilitating greater local Indonesian participation in PT Koba by way of increased equity ownership and
management through an Indonesian affiliate company of OSRL;
(ii) Securing the PT Koba Contract of Work (“CoW”) extension or new mining permits over the existing
CoW area for 10 years up to 31 March 2023 through joint effort of OSRL and MSC;
(iii) Enabling BCL and operating companies to expand their businesses through performance improvement
and value enhancement as well as through acquisition of additional mining permits for long term
sustainable operations in Indonesia.
Upon renewal of PT Koba CoW, OSRL will be able to increase up to 50% equity interest in BCL through
subscription of additional 1,126,566,234 shares of US$0.01 each subject to fulfillment of certain conditions
precedent stipulated in the SAA including MSC obtaining shareholders’ approval at an extraordinary general
meeting (EGM) to be convened at a later date.