Conditional disposal of the Peninsula land (1364G)

TIDMJSM

RNS Number : 1364G

JSM Indochina Ltd

06 May 2011

JSM Indochina Ltd.

6 May 2011

Conditional disposal of the Peninsula land use rights, Vietnam

The Board of JSM Indochina Ltd. ("JSM" or the "Company")(AIM: JSM.L), is pleased to announce that they have signed a deposit agreement today concerning the conditional disposal of the Peninsula land use rights (the "Transaction"). The deposit agreement has been signed with Sao Sang Saigon Joint Stock Company (the "Purchaser"). The Purchaser is an affiliate of Nam A Bank.

Under the terms of the deposit agreement, the gross consideration payable for the Peninsula land use rights is US$11,000,000 (the "Consideration") to be paid in Vietnamese Dong at the selling exchange rate announced by Vietcombank on the date of payment.

A deposit of 20% of the Consideration, VND 45,650,000,000 (equivalent to $2.2 million at the announced exchange rate of VND 20,750/USD 1)) has today been paid to the bank account of QSpace and Promise Land and converted into $2.2 million today, pending signing of the Peninsula land use rights agreement ("LUR Agreement") to transfer the Peninsula land use rights to the Purchaser.

All taxes and introductory commissions in connection with the Transaction, which are estimated at $1,200,000, will be borne by JSM. Registration fees in connection with the Transaction will be borne by the Purchaser.

The Peninsula land use rights are currently held by QSpace and Promise Land. As a result of the Transaction, the proposed transfer of the land use rights from QSpace and Promise Land to Linh Trang which was described in the Company's 1 February 2011 announcement will not take place.

The disposal of the Peninsula land use rights to the Purchaser is conditional on the signing of the LUR Agreement with the Purchaser no later than 25 May 2011.

Conditional on the signing of the LUR Agreement, the Purchaser shall pay another 70% of the Consideration to QSpace and Promise Land in Vietnamese Dong equivalent based on the published exchange rate on that day, which will subsequently be converted into US Dollars as soon as practicable thereafter. The Purchaser shall provide QSpace and Promise Land with a letter of guarantee for the remaining 10% of the Consideration, which will be paid to QSpace and Promise Land when the Purchaser receives the Peninsula land use rights certificates confirming the Purchaser as the legal land user. Completion of the Transaction is expected to occur by the end of June 2011. In the event of failure by either party to execute the LUR Agreement by 25 May 2011,the deposit agreement contains default provisions for payment of 10% of the Consideration to the non-defaulting party.

On completion of the Transaction, the Consideration will be used to repay part of QSpace's $21,000,000 loan facility with United Overseas Bank (the "Loan Facility"). The balance of the Loan Facility will be repaid from the $21,537,545 cash pledge with United Overseas Bank (the "Pledge") held by a JSM subsidiary, and the balance of the Pledge will be approximately $6.3 million, after settlement of tax liabilities and other costs associated with the Transaction, the UOB loan and other related matters.

The unaudited gross book value, and the net book value (after fair value and liquidation accounting adjustments), of Peninsula at 31 December 2010 was $11,000,000 and $5,790,246 respectively. The unaudited loss before tax of Peninsula for the year ended 31 December 2010 was $10,209,754 (after fair value and liquidation accounting adjustments), and $38,697 (before fair value and liquidation accounting adjustments) (source: unaudited management information). In accordance with the disclosure obligations in the AIM Rules for Companies, the net book value of Peninsula at 30 June 2010 was $15,500,000 and the loss before tax of Peninsula for the year ended 31 December 2009 was $4,828,674 (after fair value adjustments), and $38,843 (before fair value adjustments).

This Transaction represents the final asset disposal in the Company's real estate portfolio. Completion of the disposal of the Company's Cambodian portfolio remains subject to a number of conditions as previously announced.

CBRE acted for JSM.

Scott Verges, Chairman of JSM Indochina Ltd. commented:

"We are very pleased to be able to announce the conditional disposal of Peninsula to Sao Sang Saigon Joint Stock Company. The financial terms of the Transaction are not materially different to the net book value used in the 3 May 2011 announcement. As per our previous announcements regarding the disposal of the Cambodian portfolio, the Board continues to consider the options available to deal with the Company's subsidiaries, after finalising the corporate tax position from JSM's subsidiaries. We will provide an update on a return of capital in due course after the Board takes into account appropriate reserves for later distribution."

For further information:

 
 JSM Indochina Ltd.              +1 415 400 2461 
 Scott Verges, Chairman 
 
 Panmure Gordon (UK) Limited     +44 20 7459 3600 
 Edward Farmer / Andrew Potts 
 
 CBRE 
 David Simister                  +66 2654 1111 
 Marc Townsend                   +84 83824 6125 
 
 Buchanan Communications         +44 20 7466 5000 
 Lisa Baderoon

This information is provided by RNS

The company news service from the London Stock Exchange

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