| To: Business Editor | 25th August 1999 For immediate release |
CYCLE & CARRIAGE LIMITED
INTERIM REPORT 1999 HIGHLIGHTS
The following press release was issued today by the Company's 24%-owned associate, Cycle & Carriage.
For further information please contact:
| Forrest International Limited David Dodwell Sue Gourlay |
Tel: | (852) 2522 6475 (office) (852) 2501 7902 (direct) (852) 2501 7936 (direct) |
Full text of this and other Group announcements can be accessed through the Internet at "http://www.irasia.com/listco/sg/jshl".
Cycle & Carriage Limited and DaimlerChrysler AG sign MOU on Future Cooperation
17th December 1999 -- Cycle & Carriage Limited ("CCL") wishes to announce that it has today signed a memorandum of understanding with DaimlerChrysler AG ("DaimlerChrysler"), the manufacturer and master franchise holder of Mercedes-Benz vehicles worldwide, in respect of the distribution and sale of Mercedes-Benz products in Singapore with effect from 1 January 2001.
Cycle & Carriage Industries (1986) Pte Ltd ("CCI"), a wholly-owned subsidiary of CCL and the existing distributor of Mercedes-Benz vehicles in Singapore, will be appointed DaimlerChrysler's exclusive dealer in Singapore to manage the retail sale and after-sale aspects of the Mercedes-Benz operations, and will continue with its existing sales and service network. The new arrangement which will take effect from 1 January 2001 will have an initial effective term of five years after which it will be automatically renewed for further periods of one year unless either party gives notice of its intention not to renew. With that, and by mutual agreement, CCI's existing distributorship agreement with DaimlerChrysler will cease with effect from 31 December 2000.
From 1 January 2001, DaimlerChrysler will manage the wholesale activities of the Mercedes-Benz operations, which will comprise principally of importing and other wholesale functions. A new company will be formed by DaimlerChrysler to undertake the wholesale function ("Wholesale Newco") and CCI will hold a 24.9% shareholding and play an active role in Wholesale Newco, although it will not participate fully in the profit and loss of the company. While details have yet to be finalised, DaimlerChrysler have indicated that Wholesale Newco will take over the associated resources employed by CCI in relation to the wholesale function. Put and call options will exist in respect of CCI's shares in Wholesale Newco, which will be exercisable only if CCI ceases to remain the exclusive Mercedes-Benz dealer in Singapore. Definitive agreements are expected to be finalised and signed early next year.
The new arrangement will enable CCL to continue its long term relationship with DaimlerChrysler with positive benefits, although in the short term, it would result in a reduction of profit. Had this new arrangement been in place in 1999 and CCL restructured for this, it would have resulted in an estimated impact on post-tax profits amounting to S$17 million. CCL looks forward to working closely with DaimlerChrysler to continue maintaining the high standard of Mercedes-Benz operations in Singapore.
None of the Directors or substantial shareholders represented on the Board of Directors has any interest, direct or indirect, in the transaction.
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