Introduction
The Board of Directors of CJ Century wishes to announce that CJ Century Logistics Sdn. Bhd. (“CJCL"), a wholly-owned subsidiary of CJ Century, have on 15 March 2021 entered into a Memorandum of Understanding (“MOU”) with Utama Multimodal Logistics Sdn. Bhd. (“UML”) to collaborate to propose to various pharmaceutical companies in Malaysia for the transportation and distribution of pharmaceuticals from global suppliers to the said pharmaceutical companies as well as onward distribution on a preferential basis (“the Said Business Venture”).
CJCL and UML are each referred to as the “Party” and collectively referred to as the “Parties”.
Information on UML
UML is primarily engaged in providing logistics services to the pharmaceutical and medical device industry, particularly multimodal transportation of pharmaceuticals from global suppliers to Malaysia and vice versa.
Salient terms of the MOU
The salient terms of the MOU are set out below:
(a) The parties shall work together and co-operate jointly with each other towards the objective of the Said Business Venture and shall inform each other of all developments in relation hereto.
(b) The parties shall participate jointly in all presentations and discussions as and when necessary.
(c) Each of the parties shall be responsible for its own costs and expenses in the Said Business Venture in furtherance of the joint objective of this MOU.
(d) Upon the award of a logistics contract by the pharmaceutical companies in Malaysia, the Parties mutually agree that they shall subsequently enter into a logistics service agreement outlining the same strategic direction of the Said Business Venture to meet the parties’ requirement. Further, it remains the parties’ intention wherein the strengths and skill of each party and their respective roles shall be divided according to each party’s strength to achieve the vital results that are beneficial to the parties.
Duration of MOU
The MOU shall remain in full force and effect from 15 March 2021 unless terminated pursuant to the following:
(a) Notice of cancellation or rejection of the Said Business Venture;
(b) Award of the Said Business Venture to a party other than CJCL and /or UML;
(c) Written notice provided by either party to terminate this MOU by giving 30 days’ notice; or
(d) One (1) year after the execution of this MOU.
Rationale of the MOU
The MOU enables the Company to expand its business into distribution of vaccines, such as Covid-19 vaccines, which has favourable prospects following the current pandemic.
Financial Effects of the MOU
The MOU will not have any effect on the share capital and substantial shareholders’ shareholding of CJ Century.
The MOU is not expected to have any immediate material effect on the earnings per share, net assets per share and gearing of CJ Century for the financial year ending 31 December 2021. Nevertheless, there will be a positive effect on the earnings per share of CJ Century upon the award of a logistics contract by any of the pharmaceutical companies in Malaysia.
Directors’ and major shareholders’ interests
None of the Directors and/or major shareholders of the Company and/or persons connected with them have any interest, direct or indirect, in the MOU.
Approvals required
The MOU is not subject to the approval of the shareholders of CJ Century.
Statement by Board of Directors
The Board of Directors of CJ Century, having taken into consideration all aspects of the MOU, is of the opinion that the MOU is in the best interest of CJ Century.
This announcement is dated 15 March 2021.
