Conditional disposal of subsidiaries (6293I)

TIDMJSM

RNS Number : 6293I

JSM Indochina Ltd

17 June 2011

For Immediate Release 17 June 2011

JSM Indochina Ltd.

Conditional disposal of subsidiaries

The Board of JSM Indochina Ltd. ("JSM" or the "Company")(AIM: JSM.L), is pleased to announce that it has today entered into an agreement (the "Agreement") with Trinity Structure & Finance Ltd ("Trinity") for the conditional disposal of all of the Company's subsidiaries (the "Transaction").

Following the conditional disposals of the Company's real estate assets (as previously announced), the Board believes that the Transaction is the most efficient means of expediting further returns of capital to shareholders. The alternative would be for the Company to carry out liquidations in Cambodia, Vietnam, Singapore and the Cayman Islands. In order to carry out those liquidations, various legal processes would need to be undertaken and tax obligations and other liabilities would need to be settled. These actions would be expected to take a long period of time to complete and involve the Company incurring significant costs.

Under the terms of the Agreement, Trinity will acquire all the issued share capital in the Company's direct subsidiary, JSM Indochina Properties Limited ("JSM Properties"), for a nominal consideration of US$1. JSM Properties owns all of the Company's other subsidiaries.

The Company has agreed with Trinity that if the Transaction completes on or before 31 December 2011, US$7,196,525 in cash will be retained by JSM Properties and its subsidiaries. Should the Transaction complete after this date in 2012, US$8,238,225 in cash will be retained. The cash will be retained to allow JSM Properties and its subsidiaries to comply with their legal and regulatory requirements, satisfy their tax obligations and settle their other liabilities following completion of the Transaction. The Transaction therefore enables the Company to avoid the complexities and expense of liquidating multiple entities in four jurisdictions.

The cash has been retained in respect of all liabilities, including actual and potential tax liabilities. These include: (i) prior year tax obligations; (ii) tax liabilities which would be triggered on a liquidation of the relevant entity and (iii) taxes arising from the disposals of the Company's real estate assets. The amount of cash retained will reduce if the Company pays any such tax liabilities prior to completion of the Transaction.

The amount of cash retained will increase if any new liabilities arise and are not settled prior to completion of the Transaction and the Company and Trinity agree the amount of such liabilities. If the Company and Trinity can not agree such amount, the Agreement will terminate.

Completion of the Transaction is conditional upon completion of the disposal of the Company's Cambodian portfolio.

In accordance with the disclosure obligations in the AIM Rules for Companies, the gross assets and net assets of JSM Properties and its subsidiaries at 31 December 2010 was US$112,342,445 and US$108,488,708 respectively. The loss before tax for JSM Properties and its subsidiaries for the year ended 31 December 2010 was US$58,153,902 (after fair value and liquidation accounting adjustments).

Assuming completion of the Transaction by 31 December 2011, and after taking into consideration the monies retained by JSM Properties and its subsidiaries and the 31 December 2010 book value of the liabilities in JSM Properties and its subsidiaries,there will be a benefit to the Company from release of the subsidiaries' liabilities of approximately US$841,000.

A further update on a return of capital will be provided in due course. As previously announced, once the Company has completed the disposal of all of its real estate assets and interests and satisfied its liabilities, it is the intention of the Board of Directors to put forward a proposal for shareholders' approval to liquidate the Company.

Scott Verges, Chairman of JSM Indochina Ltd. commented:

"We are very pleased to announce the conditional disposal of the Company's subsidiaries to Trinity. The release of the subsidiaries' liabilities is expected to result in a benefit to the Company of approximately US$841,000, assuming completion by 31 December 2011."

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 
 
 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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