1. INTRODUCTION

The Board of Directors (“Board”) of Bonia Corporation Berhad (“Bonia” or “the Company”) is pleased to announce that the Company had on 12 August 2010 approved the disposal of 25% shareholdings of 125,000 ordinary shares of RM1.00 each in New Series Sdn Bhd (“NSSB”), a wholly owned subsidiary of Bonia to Mr Boonnam Boonnamsap and Mr Chan Fook Hong for RM75,000.00 and RM50,000.00 representing 15% and 10% equity interest respectively (“Proposed Disposal”). The remaining 75% is to be transferred to Dominion Directions Sdn Bhd (“DDSB”), a wholly owned subsidiary of Bonia.

2. DISPOSAL AND TRANSFER CONSIDERATION

The consideration for the Proposed Disposal of RM125,000.00 was based on  “willing-buyer willing-seller” basis after taking into consideration the net liabilities of NSSB as at 31 May 2010.  The consideration for the Proposed Transfer will be at par value of RM375,000.00. The Proposed Disposal and Transfer consideration shall be fully settled by way of cash.

2.1. ESTIMATED TIME OF COMPLETION

The Proposed Disposal and Transfer are expected to completed by end of 31 August 2010.

3. INFORMATION OF NSSB

NSSB was incorporated on 4 April 2007 under the Companies Act 1965 and having its authorised and paid up share capital of 500,000 ordinary shares of RM1.00 each. NSSB’s principal activitiy is marketing and distribution of men’s apparel. The shareholders of NSSB before and after the Proposed Disposal and Transfer are as per table below:

For the financial year ended 30 June 2009, NSSB reported an audited net loss of RM1,175,081.00 and audited net liabilities of RM1,644,386.00. NSSB’s financial statement for its financial year ended 30 June 2009 was audited by Messrs BDO Binder.

For the eleven months ended 31 May 2010, NSSB reported an unaudited net loss of RM504,353.00 and an unaudited net liabilities of RM2,148,739.00.

4. INFORMATION ON MR BOONNAM BOONNAMSAP AND MR CHAN FOOK HONG

Mr Boonnam Boonnamsap is a director and major shareholder of VR Directions Sdn Bhd (“VRD”) who holds 15% equity interest in VRD.  VRD is a 75% owned subsidiary of DDSB. He is also the licensor for Valentino Rudy, Carven, Savile Row and Austin Reed brand names.

Mr Chan Fook Hong is a director of DDSB since 1995. He has over 20 years of experience in the apparel industry and is responsible for market research and implementation of marketing strategies for DDSB.

6. RATIONALE

The Proposed Disposal is to expand the men’s apparel business under the licensed brand name of Austin Reed under the portfolio of NSSB. 

The purpose of the Proposed Transfer is for Bonia to rationalize its group structure whereby the business operation of the men’s apparel is grouped under DDSB.

7. RISK

None of the Board of Directors of the Company foresees any risk in the Proposed Disposal and Transfer.

8. FINANCIAL EFFECT OF THE PROPOSED DISPOSAL AND TRANSFER

The Proposed Disposal and Transfer have no material effect on the earnings per share, net assets per share, share capital and the shareholdings of the Company for the financial year ending 30 June 2011.

9. APPROVAL REQUIRED

The Proposed Disposal and Transfer do not require approval from shareholders of the Company or any statutory authorities.

10. DEPARTURE FROM THE SECURITIES COMMISSION’S POLICIES AND GUIDELINES ON ISSUE AND / OFFER OF SECURITIES

As the Proposed Disposal and Transfer do not involve any issue / Offer of Securities, the Securities Commission’s Policies and Guidelines on Issue / Offer of Securities are therefore not applicable.

11. INTEREST OF DIRECTORS’ AND MAJOR SHAREHOLDERS’ AND/OR PERSONS CONNECTED TO THEM

Save as disclosed herein for the interest of Mr Boonnam Boonnamsap and Mr Chan Fook Hong, none of the Directors and major shareholders or persons connected to the Directors or major shareholders of the Company and its subsidiaries have any interest, direct or indirect, in the Proposed Disposal and Transfer.

12. STATEMENT BY THE BOARD OF DIRECTORS OF THE COMPANY

Having considered the rationale and all other aspects of the Proposed Disposal and Transfer, the Board is of the opinion that the transactions is fair and reasonable and is in the best interest of the Company.

This announcement is dated 12 August 2010.