Company Name: TIONG NAM LOGISTICS HOLDINGS BERHAD

Company Name: TIONG NAM LOGISTICS HOLDINGS BERHAD

Company Name: TIONG NAM LOGISTICS HOLDINGS BERHAD

Stock Name: TNLOGIS

Date Announced: 12 May 2011

Type: Announcement

Subject : APPLICATION AND SUBSCRIPTION OF 3,652,000ORDINARY SHARES OF RM 1.00 EACH IN COMPLETE BAYVIEW SDN. BHD.

Contents:

The Board of Directors is pleased to announce that Tiong Nam Logistics Holdings Bhd (“TNLHB”) has on 12 May 2011 applied and subscribed for 3,652,000 ordinary shares of RM 1.00 each in cash or equivalent to 30.43% of the enlarged issued and paid up capital of 12,000,000 ordinary shares of RM 1.00 each fully paid-up in its existing 40% owned associate company, Complete Bayview Sdn. Bhd. (“CBSB”).

TNLHB currently owns 1,148,000 ordinary shares of RM 1.00 each fully paid-up representing 40% shareholdings in CBSB.

The shareholdings in CBSB will remain at 40% upon completion of the above application and subscription of shares.

CBSB is currently a dormant company and its intended principal activity is property development.

The followings are information on CBSB:

  1. Company No : 900960-D
  2. Incorporation date : 14 May 2010
  3. Registered address : Lot 30462, Jalan Kempas Baru 81200 Johor Bahru, Johor.
  4. Directors : a) Ong Yoong Nyock

b) Kong Tiam Ming

c) Yong Loy Huat

  1. Enlarged paid-up capital : 12,000,000 ordinary shares of RM 1.00 each fully

paid

  1. Shareholders : a) Tiong Nam Logistics Holdings Bhd (4,800,000 ordinary

shares of RM 1.00 each fully paid or 40% shareholdings)

b) Zainuddin bin Anuar (2,282,500 ordinary shares of RM

1.00 each fully paid or 19.02% shareholdings)

c) Yong Loy Huat (“YLH”) (2,058,929 ordinary shares of

RM 1.00 each fully paid or 17.16% shareholdings)

d) Ismail bin Hashim (1,317,500 ordinary shares of

RM 1.00 each fully paid or 10.98% shareholdings

e) Codex Alliance Sdn Bhd (“Codex”) (823,571 ordinary

shares of RM 1.00 each fully paid or 6.86% shareholdings)

f) Kong Tiam Ming (717,500 ordinary shares of RM 1.00 each

fully paid or 5.98% shareholdings)

  1. Latest Audited Net Tangible Assets : not applicable

The followings are information on Codex Alliance Sdn Bhd:

  1. Company No: 903694-V
  2. Registered address: 39-1 Jalan 9/62A, Bandar Menjalara, Kepong 52200

Kuala Lumpur.

  1. Directors: a) Mr. Tan Kian Lee

b) Mr. Lim Chan Choong

  1. Paid-up capital: 2 ordinary shares of RM 1.00 each fully paid.
  2. Shareholders: a) Mr. Tan Kian Lee (1 ordinary share of RM 1.00 fully paid)

b) Mr. Lim Chan Choong (1 ordinary share of RM 1.00 fully

paid)

YLH is the brother of both Madam Yong Kwee Lian (“YKL”), Executive Director and substantial shareholder of TNLHB and Mr. Yong Seng Huat (“YSH”), Director of the Company.

The cash consideration for the application and subscription of ordinary shares amounting to RM 3,652,000 (Ringgit Malaysia Three Million Six Hundred Fifty Two Thousand Only) is arrived at based on the willing buyer willing seller basis and is based on the par value of the ordinary shares of CBSB.

No audited financial statement of CBSB is available as CBSB has just been incorporated on 14 May 2010.

The application and subscription of ordinary shares in CBSB would not have any effect on the issued and paid-up capital and substantial shareholders’ shareholdings nor will it have any significant effect on the earnings per share, net assets per share and gearing of TNLHB for the year ending 31 Mar 2012.

The sources of finance for the application and subscription of ordinary shares in CBSB are from internal generated funds.

TNLHB will not assume any liabilities, including contingent liabilities and guarantees arising from the transaction.

The application and subscription of ordinary shares in CBSB does not require approval form shareholders and any government authorities.

The rationale for the application and subscription of ordinary shares in CBSB is for potential profit contribution by CBSB in future.

With the exception of Madam Yong Kwee Lian, Mr. Yong Seng Huat and Mr. Ong Yoong Nyck who is husband of Madam Yong Kwee Lian, none of the other directors or substantial shareholders has any interest direct and indirect in the above application and subscription of shares in CBSB.

The Board with the exception of 3 interested directors as disclosed above has considered the rationale and of the view that the above application and subscription of shares in CBSB is in the best interest of the Group.

The financial and business prospect of investment in CBSB is subject to certain risk inherent in the property development sector including changes in political, economic, regulatory and social conditions as well as increase in interest rate.

The highest percentage ratio applicable to the above application and subscription in CBSB is 1.79%.

The audit committee having considered all the relevant factors and basis as disclosed above, is of the view that the application and subscription of shares in CBSB is:

1. in the best interest of the TNLHB Group

2. fair, reasonable and on commercial terms; and

3. not detrimental to the interest of the minority shareholders

TNLHB did not enter into any transaction with CBSB or YLH who is person connected to YKL and YSH except for its initial subscription of 40,000 ordinary shares in CBSB on 5 Aug 2010, application and subscription of 1,108,000 ordinary shares in CBSB per our announcement dated 1 Oct 2010, disposal of 245,000 ordinary shares of RM 1.00 each in Japan Original Electric (M) Sdn Bhd (“JOE”) per our announcement dated 17 Feb 2011 and provision of financial assistance amounting to RM 6,504,063.66 to JOE per our announcement dated 17 Feb 2011.

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