"..... that the Company is proposing to enter into a Heads of Agreement in relation to the Proposed Acquisition of the entire existing business and undertakings of JinJiang YangSen Garments Co.,Ltd (YangSen) including all of its assets and certain agreed liabilities ("Proposeed Acquisition")."
The wording in the attachment is however different: "that the Company has on 29 July 2015 entered into a Heads of Agreement with YangSen".
"Proposing to enter" and "has entered" are of course very different.
The announcement mentioned that XiDeLang proposes to settle the (yet to be decided) purchase amount "via cash and/ or issuance and allotment of new ordinary shares of USD0.03 each in XDL (“XDL Shares” or “Shares”) at the issue price of RM0.22 per Share".
RM 0.22 was clearly higher than the last traded share price, if the seller of the business is agreeable to receive shares of XiDeLang at such a price that looks like good news. Not surprisingly the share price of XiDeLang increased the next trading day.
Bursa decided to query the company, because the announcement was "rather devoid of details" (to put it mildly).
The company answered the queries in a rather astonishing way:
The following information regarding YangSen is currently unavailable:
- Total assets and total liabilities
- Total profit
- Name of directors and substantial shareholders
- Total contracts value secured
- Distribution networks
- Manufacturing capabilities
How is it possible to sign a Heads of Agreement to purchase a business when the most basic facts are not known? It looks like XiDeLang has not even seen the last accounts.
Why does XiDeLang announce this "non-information", why does it not wait until it has more information?