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Euro Holdings Berhad ("Euro" Or "Company") Distribution Agreement With Rosemount Office Systems Llc
BackSep 18, 2007
| General Announcement Reference No EH-070918-54853 |
| Company Name | : | EURO HOLDINGS BERHAD |
| Stock Name | : | EURO |
| Date Announced | : | 18/09/2007 |
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| Type | : | Announcement |
| Subject | : | EURO HOLDINGS BERHAD ("EURO" OR "COMPANY") DISTRIBUTION AGREEMENT WITH ROSEMOUNT OFFICE SYSTEMS LLC |
Contents :
Introduction
The Board of Directors of EURO is pleased to announce that its wholly owned subsidiary, Euro Space Industries (M) Sdn. Bhd. ("ESI"), has entered into a Distribution Agreement with Rosemount Office Systems LLC ("Rosemount") to design, manufacture and supply a range of system furniture and components for Rosemount on 18 September 2007 (the "Agreement").
Rosemount, a company incorporated in the state of Minnesota in North America is a limited liability company, with majority interest owned by a Private Equity Firm that makes control investments in high quality businesses in the Midwest. Rosemount is engaged among other things, in the manufacturing and distribution of office furniture, equipment and related goods in the United States and North America. It has a wide and strong distribution network, comprising of approximately 700 dealers in the North America region. Rosemount is also a registered supplier with the Government of the United States, qualifies for both the State and Federal Procurement Programmes under the General Services Agency Agreement ("GSA"). Rosemount is now outsourcing designs and contract manufacturing overseas as part of its continuous efforts to improve its product design, quality and towards lower production cost.
Information of the Agreement
Under the Agreement, Euro will design, manufacture and supply a range of system furniture and components to Rosemount for incorporation into its final products. Rosemount will promote and sell this range of products in North America via its established network of dealers. The Agreement shall remain in force for a period of five (5) years from the date of the Agreement and shall be automatically extended for an additional two (2) years thereafter.
Financial Effects
The Agreement comprises the design, manufacture and supply of a range of system furniture and components with a minimum value of USD 12.5 million or RM 43 million within the original term of the Agreement i.e. five (5) years. The Agreement is not expected to have a material impact on the net assets per share and share capital of the Group for the financial year ending 31 December 2007. Nevertheless, it should contribute positively to the future earnings of the Group.
Rationale and Benefits of the Agreement
The contract will create the inroads for EURO into the North American market while at the same time promoting EURO as an office furniture manufacturer of international standard. The contract is also in line with the Group's strategies to further develop its contract manufacturing overseas, to broaden its revenue stream. This will serve to provide the stability in the future revenue to the Group and is expected to contribute positively to the earnings of the EURO Group for future financial years.
Directors' and Substantial Shareholders' Interests
None of the Directors and/or major shareholders of Euro Group and/or persons connected to them, have any interest, whether direct or indirect, in the above transaction.
Statement by Directors
The Board of Directors of Euro Group is of the opinion that the Distribution Agreement with Rosemount is in the best interests of the Group.
This announcement is dated 18 September 2007
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