Source of funding. The total consideration for the Proposals will be funded via a combination of internally generated funds and bank borrowings. The Proposed Acquisition represents an opportunity for YTL Cement and its subsidiaries (“YTL Cement Group”) to pursue its expansion strategy. LMB is a strategic fit to the YTL Cement Group’s cement business and is expected to complement the YTL Cement Group’s existing core business activities. The Proposed Acquisition is expected to deliver synergies including operational efficiencies in logistics, distribution and procurement, as well as cost synergies realised from economies of scale, the reduction or elimination of duplicated functions and the consolidation of corporate overheads. The realisation of the above synergies is in line with the YTL Cement Group’s continued efforts to improve operational efficiencies and manage its operating and production costs, and is expected to contribute positively to the future earnings and cash flows of the enlarged YTL Cement Group following the completion of the Proposed Acquisition. The Proposed Acquisition will also enable the YTL Cement Group to expand its production capacity by gaining access to the existing plants and facilities of the LMB Group. In addition, LMB will become a subsidiary of YTL Cement upon the completion of the Proposed Acquisition, which would place YTL Cement in a better position to align the future strategy and business direction of the LMB Group to fully realise the benefits anticipated from the exercise. While the Proposed MO is to be undertaken pursuant to Section 218(2) of the CMSA and Paragraph 4.01 of the Rules, it also provides an opportunity for YTL Cement to further increase its shareholding in LMB after the Proposed Acquisition.
