DESTINI Annual Report 2020

(iii) Shah Alam Sessions Court Suit No. BA-B52C-22-08/2020 Clamshell Dredging Sdn. Bhd. obtained Summary Judgement application against Destini Shipbuilding and EngineeringSdn. Bhd. (“DSE”) for thesumof RM850,000and interest at 5%per annum. Thenext casemanagement is fixed on 29 January 2021. (iv) Shah Alam High Court Suit No. BA-21NCVC-65-09/2020 Government of Malaysia is claiming against Destini Shipbuilding and Engineering Sdn. Bhd. for a sum of RM6,584,440.74. (v) Shah Alam High Court Suit No. BA-21NCVC-64-09/2020 Government of Malaysia is claiming against Destini Shipbuilding and Engineering Sdn. Bhd. for a sum of RM14,141,278. 40. Significant Events (a) Proposed acquisition, diversification and dilution On 18 February 2020, the Company announced the following: (i) Destini Armada Private Limited (“DAPL”), a wholly-owned subsidiary of the Company had entered into a conditional share sale agreement (“SSA”) with PT Berkah Sadaya Adikarya (“Vendor”) for the acquisition of 4,999 ordinary shares in PT Muara Badak Perkasa (“PT MBP”), representing approximately 99.9% equity interest in PT MBP for a purchase consideration of SGD4,000,000 to be satisfied entirely via the issuance and allotment of 4,900,000 new DAPL Shares at an issue price of approximately SGD0.8163 per DAPL Share (“Proposed Acquisition”); (ii) In conjunction with the Proposed Acquisition, the Board proposed to undertake a diversification of the business activities of the Group to include the provision of jetty and/or port operations related services to mining companies (“Proposed Diversification”); and (iii) Upon completion of the Proposed Acquisition, the vendor is expected to emerge as the largest shareholder of DAPL, with a 55% equity interest in DAPL. Simultaneously, the equity interest of the Company in DAPL will be diluted from 100% to 45%. Consequently, the equity interest of the Company in its indirectly owned subsidiaries held by DAPL will be diluted accordingly (“Proposed Dilution”). The Board had submitted the applications to Bursa for extension of time and Bursa had, vide its letters dated 20 April 2020 and 4 August 2020 resolved to grant an extension of time up to 18 October 2020 to submit the draft Circular pursuant to Paragraph 9.33(1)(a) of the Listing Requirements. The Board, after taking into consideration the current market conditions, the situation of the Covid-19 pandemic in both Malaysia and Indonesia, has mutually agreed with the Vendor to terminate the SSA. DAPL had on 16 October 2020 entered into the deed of termination with the Vendor for the termination and release of the SSA. Pursuant thereto, DAPL will not be proceeding with the Proposed Acquisition. The termination of the SSA will not have any material effect on the issued share capital, net assets, gearing, earnings and earnings per share of the Group for the financial year ended 31 December 2020. 39. Material Litigation (Cont’d) ANNUAL REPORT 2020 DESTINI BERHAD Notes to Financial Statements 194