Bursa Updates

Bursa Updates

Date Announced:

22/01/2010

Subject:

HO HUP CONSTRUCTION COMPANY BERHAD ("Ho Hup" or "the Company")

-	APPLICATION TO BURSA MALAYSIA SECURITIES BERHAD ("BURSA SECURITIES") FOR PROPOSED EXTENSION OF TIME FOR HO HUP TO SUBMIT A REVISED REGULARISATION PLAN TO THE RELEVANT AUTHORITIES

Contents:

We refer to the announcement dated 30 October 2009 in relation to the Company's proposed plan to regularise its financial condition ("Announcement").

(Unless otherwise stated, the abbreviations and definitions used throughout this announcement shall be the same as those previously defined in the Announcement.)

Announcement
Details:

With the aim to regularise Ho Hup's financial condition, AmInvestment Bank Berhad (a member of AmInvestment Bank Group), had on behalf of the Board of Directors of Ho Hup ("Board"), announced on 30 October 2009, the Company's proposed regularisation plan pursuant to the provisions of Practice Note 17/2005 ("PN17") of Bursa Securities' Main Market Listing Requirements ("Listing Requirements"), to address the PN17 status of Ho Hup, as follows: -

(a)	Proposed Capital Reduction;

(b)	Proposed Consolidation;

(c)	Proposed Restricted Issue;

(d)	Proposed Rights Issue; and

(e)	Proposed Amendments.

(collectively the "Initial Proposed Regularisation Plan")

The Company had on 30 October 2009, also submitted the Initial Proposed Regularisation Plan to Bursa Securities in compliance with the provisions of PN17 of the Listing Requirements. Subsequent thereto, the Company had received various feedback from its shareholders on the Initial Proposed Regularisation Plan. Although the Board is of the opinion that the Initial Proposed Regularisation Plan is sufficiently comprehensive to uplift Ho Hup's PN17 status, the Board has deliberated on the concerns and feedback received from its shareholders. The Company, whilst mindful of Bursa Securities' requirements for the upliftment of its PN17 status, is committed to ensuring the successful implementation of the regularisation proposals and hence a review of the Initial Proposed Regularisation Plan has been undertaken by the Board.

In lieu of certain changes contemplated to the Initial Proposed Regularisation Plan, the Company has on 22 January 2010, submitted an application to Bursa Securities for an extension of time of three (3) months from 4 February 2010 (i.e. up to 4 May 2010) for it to submit a revised scheme to Bursa Securities to address its PN17 status ("Proposed Extension of Time").

Strictly for informative purposes at this juncture, the Company wishes to announce that it is presently contemplating the following changes to the Initial Proposed Regularisation Plan whereby the Company's proposals to regularise its financial condition may inter-alia, include the following: -

(a)	Higher participation by existing shareholders in the rights issue and lower amount of restricted issue shares to investors. In this respect, the following are being contemplated by the Board: -

(i)

Proposed placement of approximately 10 million new Shares ("Placement Shares") at an issue price of RM1.00 each ("Proposed Private Placement 1") whereby the identities of the placees will be disclosed to shareholders together with the full announcement on the proposed revised scheme; and

(ii)

Proposed renounceable rights issue of up to approximately 30 million new Shares ("Revised Rights Shares") at an issue price of RM1.00 per Revised Rights Share ("Proposed Revised Rights Issue").

In view of the above changes to the Proposed Rights Issue, the Company is presently re-engaging the major shareholders of the Company to procure their interest in subscribing for the Revised Rights Shares. In the event that the Revised Rights Shares are not fully subscribed by the shareholders of the Company, the balance of Revised Rights Shares not subscribed for ("Remaining Revised Rights Shares") will then be placed out to investors ("Proposed Private Placement 2"). In this respect, shareholders of Ho Hup will be given the first right of refusal to subscribe for the Revised Rights Shares before the Remaining Revised Rights Shares are then placed out via the Proposed Private Placement 2. In the event that the Proposed Private Placement 2 is undertaken, the identities of such investors will be disclosed to shareholders prior to the despatch of the circular to shareholders to seek their approval.

(b)	Lower capital reduction and introduction of an option to leverage on the Company's current core landbank of 60 acres situated within Bukit Jalil ("Core Landbank") should the capital reduction proposed be unsuccessful. In this respect, the Company is contemplating the following: -

(i)

proposed reduction of the existing issued and paid-up share capital of the Company by RM0.60 of the par value of each existing Share pursuant to Section 64 of the Companies Act, 1965 instead of RM0.95 of the par value of each existing Share under the Initial Proposed Regularisation Plan ("Proposed Revised Capital Reduction");

Subsequent to the Proposed Revised Capital Reduction, a proposed share consolidation of the resultant ordinary shares of RM0.40 each, on the basis of five (5) ordinary shares of RM0.40 each into two (2) Shares ("Proposed Revised Consolidation")

(The Proposed Revised Capital Reduction and Proposed Revised Consolidation are collectively referred to as the "Proposed Revised Capital Reconstruction")

OR

(ii)

should the Proposed Revised Capital Reconstruction be unsuccessful, shareholders will then be provided with an option to vote for the Company to leverage on its Core Landbank ("Proposed Core Landbank Transaction") to address the accumulated losses of the Ho Hup Group with certainty. In this respect, the Company is in discussions with various parties of the said transaction, which is envisaged to include the following:-

(a)

Disposal of land within the Core Landbank;

(b)

Arrangements to jointly develop the Core Landbank;

(c)

Entering into put options to secure buyer(s) for the development projects within the Core Landbank; or

(d)

A combination of all of the above.

(items (i) and (ii) are collectively referred to as the "Proposed Options")

(items (A) and (B) are collectively referred to as the "Proposed Revised Scheme")

The details of the Proposed Revised Scheme are still subject to finalisation as the Company is currently still in negotiations with the various parties, in particular the relevant parties for the Proposed Core Landbank Transaction. An immediate full announcement on the Proposed Revised Scheme will be made upon finalisation of the full terms in respect of the proposals therein.

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