Copyright© 2011 Transcu Group & Forest Pine Group (NPL, BME, AMT, 3DOM) All Rights Reserved.
Proposed Restructuring of Transcu Group Limited Press Briefing 25 November 2011
Copyright© 2011 Transcu Group & Forest Pine Group (NPL, BME, AMT, 3DOM) All Rights Reserved.
Agenda
• Overview of Transcu Group Limited
• Proposed Restructuring Plan
• Details of Restructuring Plan
• Introduction of Forest Pine Group
• Key Takeaways
• Key Milestones
Copyright© 2011 Transcu Group & Forest Pine Group (NPL, BME, AMT, 3DOM) All Rights Reserved.
Transcu Group Limited
Group Overview
Copyright© 2011 Transcu Group & Forest Pine Group (NPL, BME, AMT, 3DOM) All Rights Reserved.
Overview of Transcu Group Limited
4
•Established in 1988 in Japan and listed on SGX-Mainboard in February 2009
• Life Science company that focuses on innovating and developing cutting-edge technology
to enhance quality of human life through 3 key business segments:
Pharmaceutical
Cosmetics
Green Technology
• Headquartered in Singapore with offices in Japan and United States
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Overview of Transcu Group Limited
Pharmaceutical
• Proprietary technologies: Active Iontophoresis & Ionic Passive
• Seeks to replace conventional drug administration methods with optimised enhanced patch system
Cosmetics
• Utilizes Mineralore and Ionic Passive technology to develop premium skincare lines
• Distributes through more than 400 locations in Japan
Green Technology
• Nano-Emulsion Fuel Technology
• Renewable Energy Technology (Subsidiary: BIOMASS Energy Corporation)
• Thermal Solutions Technology (Owns exclusive distributionship from A. M. Technologies)
High costs. Long gestation period.
Provides steady income
Negligible revenue
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Overview of Transcu Group Limited
•Transcu suspended its shares for trading on 9 June 2011 due to immediate cash
flow concerns
•Group has turned to streamline its cost structure but it is unable to continue
operations if costs are reduced any further as working capital is currently at a
minimum level
• In order to achieve a longer term solution, Transcu has decided to enter into the
Restructuring Agreement with Forest Pine Holdings Inc (“FPHI”).
Copyright© 2011 Transcu Group & Forest Pine Group (NPL, BME, AMT, 3DOM) All Rights Reserved.
Transcu Group Limited
Proposed Restructuring Plan
Copyright© 2011 Transcu Group & Forest Pine Group (NPL, BME, AMT, 3DOM) All Rights Reserved.
Proposed Restructuring Plan
8
• The Group has entered into the Restructuring Agreement with FPHI on 9
September 2011
• FPHI has entered into a Joint Venture Agreement (“JVA”) with State Power
Group Limited (“SPGL”) and the revised JVA was dated 9 November 2011
• FPHI and SPGL have intention to transfer the rights and obligations of FPHI
under the JVA to FPGPL
• FPGPL is an indirect wholly owned subsidiary of FPHI
• Aim of Restructuring Exercise:
To achieve leaner cost structure
To allow access to additional funds to improve cash-flow condition
To increase the chance of attaining positive cash flow position
Copyright© 2011 Transcu Group & Forest Pine Group (NPL, BME, AMT, 3DOM) All Rights Reserved.
Restructuring Plan’s Summary
9
1. Core Pillar Investments (“CPI”), owned by FPHI to assume the costs and liabilities
of Pharmaceutical development of Transdermal Drug Delivery System (“TDDS”)
2. Transcu shall transfer the exclusive distributorship for Nano-Emulsion Fuel System
to FPGPL
3. Transcu shall transfer the exclusive distributorship for the highly heat dissipating
material of AM Technologies Co., Ltd (“AMT”) for use in LED lighting and solar
power generation applications to FPGPL
4. FPGPL to acquire Transcu’s 76.5% equity interest in BioMass Energy Corporation
(“BME”) for a consideration of US$2.0 million
5. Transcu to acquire 20% of the share capital of FPGPL via shares swap
6. Transcu shall collaborate with FPGPL in the global commercialization of FPGPL’s
technology and product in the green energy business; FPGPL to reimburse 80% for
the rental expense for Transcu’s Singapore HQ
Copyright© 2011 Transcu Group & Forest Pine Group (NPL, BME, AMT, 3DOM) All Rights Reserved.
Proposed Restructuring Plan
10
• Completion of Restructuring Plan is conditional upon:
Shareholders’ approval via EGM
Receipt of independent valuer’s report on BME and FPGPL
Recommendation of IFA of the Restructuring Steps
Approvals, consents, grants or waivers from relevant
authorities
Copyright© 2011 Transcu Group & Forest Pine Group (NPL, BME, AMT, 3DOM) All Rights Reserved.
Transcu Group Limited
Details of Restructuring Plan
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Details of Restructuring Plan
1. CPI to provide financial assistance to TTIe (wholly owned by Transcu) for net costs of the Pharmaceutical business development activities
• TTIe retains existing Intellectual Property (“IP”) • CPI owns new IP not license to 3rd party, of which TTIe is granted the
exclusive right to purchase back the new IP at a mutually agreed price
Transcu Group Core Pillar Investments
Pharmaceutical
Green Tech
Cosmetics
IP Pharmaceutical
12
Copyright© 2011 Transcu Group & Forest Pine Group (NPL, BME, AMT, 3DOM) All Rights Reserved.
2. Distributorship agreements: Transcu shall transfer the exclusive distributorship of Nano-Emulsion Fuel
System only to FPGPL
Transcu shall transfer the exclusive distributorship for the highly heat
dissipating material of AMT for use in LED lighting and solar power generation applications to FPGPL. All other distribution rights shall be terminated.
Details of Restructuring Plan
Copyright© 2011 Transcu Group & Forest Pine Group (NPL, BME, AMT, 3DOM) All Rights Reserved.
3. Sales of the Group’s 76.5% equity interest in BME for US$2.0 million
• BME’s products are not commercialised yet
• An independent valuation of BME was conducted and the fair market value of 100% of BME was determined at US$2.5 million.
• FPGPL shall honor the US$2.0 million in cash proceeds and purchase BME when the IPT transaction is approved by the shareholders.
Details of Restructuring Plan
Copyright© 2011 Transcu Group & Forest Pine Group (NPL, BME, AMT, 3DOM) All Rights Reserved.
Details of Restructuring Plan
4. Transcu will acquire 20% of the equity interest in FPGPL (12% from FPHI and 8% from AMAC Capital Partners (Pte) Ltd) for US$50.0 million (the “Acquisition”).
• The consideration for the Acquisition will be fully satisfied by the allotment and issue of approximately 1,250,000,000 shares in the Company at an issue price of S$0.05 per share.
• The Acquisition will result in Mr Akihiko Matsumura, CEO and Executive Director of Transcu, increasing his ownership in the company from 19.3% to 31.9%.
• The Acquisition is conditional upon, amongst others,
the completion and implementation of the other transactions contemplated under the Proposed Restructuring;
receipt of relevant approvals from the SGX, SIC and shareholders of the Company;
issuance of a valuation report opining that the value of FPGPL is no less than US$250.0 million.
Copyright© 2011 Transcu Group & Forest Pine Group (NPL, BME, AMT, 3DOM) All Rights Reserved.
Details of Restructuring Plan
5. Collaboration with FPGPL in the global commercialization of FPGPL’s technology and related products in green energy business o FPGPL to share office with Transcu and reimburse Transcu 80% of the
rental expense o FPGPL to reimburse Transcu for the provision of management and
corporate services for the daily business operations of FPGPL and its subsidiary companies where relevant
Forest
Pine
Copyright© 2011 Transcu Group & Forest Pine Group (NPL, BME, AMT, 3DOM) All Rights Reserved.
Transcu Group Limited
Introduction of Forest Pine Group
19 September 2011
Copyright© 2011 Transcu Group & Forest Pine Group (NPL, BME, AMT, 3DOM) All Rights Reserved.
Technology of pulverizing and emulsifying various materials to the nano level
The world’s first secondary battery of lithium metal
High-powered LED lights with the world’s best heat dissipating material
A. M.
Technologies
3DOM
Technology
Nanomizer
Biomass
Energy
Corporation
(“BME”)
Professor: Masashi KANAMURA
CEO: Nobuyuki SUZUKI
Methanol production from various kinds of non-edible biomass
CEO: Takehiko MATSUMURA
Director & Professor: Masayasu SAKAI
Introduction of Forest Pine Group
18
Forest Pine Group
Copyright© 2011 Transcu Group & Forest Pine Group (NPL, BME, AMT, 3DOM) All Rights Reserved.
FPHI / FPGPL State Power
Joint Venture Company
“National Technology Innovation Corporation” (NTIC)
(國能技術創新集団)
Technologies
Production Sales
Intro of FPGPL: JV with State Power in China
19
Copyright© 2011 Transcu Group & Forest Pine Group (NPL, BME, AMT, 3DOM) All Rights Reserved.
State Power
National Bio Energy
(“NBE”)
Jinan Boiler
National Wind
Energy
The world’s largest biomass power generation company
(27 plants in operation)
The largest boiler maker for biomass power plant
(with annual capacity of 20,000 steam tons)
The most advanced wind power generation technology in China
Intro of FP: About the State Power
20
Copyright© 2011 Transcu Group & Forest Pine Group (NPL, BME, AMT, 3DOM) All Rights Reserved.
60%
Forest Pine State Power
Nanomizer PL
Biomass Energy Corp
Advanced Material Technologies
3DOM Technology
Nanomizer China
Biomass Energy China
LED China
3DOM Technology China
Solar China
90%
40%
10%
National Technology Innovation Corporation
In China In Japan
76.5%
80%
Land in Fang Shan Signing Ceremony: 25 Sep
Intro of FPGPL: NTIC Corporate Structure
21
51%
65%
100%
100%
100%
100%
10%
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3months 3 months
• Conducted basic research with Nippon Light Metal
for more than ten years
• Invested in a manufacturing plant (production
capacity of 2 million products per month)
• Received order from NTT
• Decades of basic research at Tokyo Metropolitan University • NEDO technological development of high performance
battery charging system for next generation automobile • Development of structural control type novel metal
negative electrode
The first factory to be built near Beijing
Final test with
major material
manufacturers
The first factory to be built on the site (in Beijing city)
Development Roadmap of NTIC Subsidiary Companies
Nano- mizer
BioMass Energy
AM Tech.
3DOM Tech.
7 Nov 11 Start Selling
Conclude sales
agreement
for street lights
in Beijing city
(10m units)
Sell to
bus company
in Beijing city
(20,000cars)
• More than 15 years of basic research at Mitsubishi
• Received grants from Ministry of Agriculture of Japan
Among ten projects, three of its biomass
projects received support from New
Energy and Industrial Technology
Development Organization (NEDO)
Construction in electric
power plant in China
Construction
plan of 49 units
• Financial support and joint research with Universal Shipbuilding and ClassNK(Nippon Kaiji Kyokai)
• Conclude rental contract with Obayashi Road
Corporation (over 30 machines)
The first factory to be built in China
Construction
plan of 49 units
Copyright© 2011 Transcu Group & Forest Pine Group (NPL, BME, AMT, 3DOM) All Rights Reserved.
Condition:Room temperature 25℃ Above:ALC400 Left Below:Steal Board
ALC400 Experiment of Ice melting
After 3 minutes, ice on ALC400 was completely melted.
Start After 0:30 After 1:00
After 1:30 After 2:00 After 2:30
After 3:00
Mercury Light
Our Product
Price
US$750
US$4750
US$750
32W
120W
400W
Consumed power
Life duration
Approx 1.5yr
3yr warranty
Over 5yr
Other LED
USA R&D100 Award/2009
ALC400 creates high performance LED
Intro of FPGPL: A. M. Technologies (AMT) -ALC400
Figures are meant for illustration and reference purposes only
23
Copyright© 2011 Transcu Group & Forest Pine Group (NPL, BME, AMT, 3DOM) All Rights Reserved.
Tunnel Light Factory Light Road Light
Plan to deliver Street Lightings to Beijing City
Intro of FPGPL: Products of AMT
24
Copyright© 2011 Transcu Group & Forest Pine Group (NPL, BME, AMT, 3DOM) All Rights Reserved.
Headlamp Power Consumption
120W
60W
12W
Popular Car (HID)
Luxury Car (LED)
Car Equipped with LED (AMT)
Intro of FPGPL: AMT can Reduce Power Consumption Drastically
25
Figures are meant for illustration and reference purposes only
Copyright© 2011 Transcu Group & Forest Pine Group (NPL, BME, AMT, 3DOM) All Rights Reserved.
Anode
Cathode
Sepa- rator
Lithium-ion
700 Wh/Kg
300 Wh/Kg
150 Wh/Kg
100 Wh/Kg
2010
2015
2020
2030
Target of R&D (Researched
by METI)
Small EV
High Performance
EV
Fuel Cell Car Commuter EV
Full-Fledged EV
Lithium -Metal
Ex) Carbon Ex) Carbon
3DOM Normal
Battery Components
Intro of FPGPL: 3DOM Technology – Separator
26
Figures are meant for illustration and reference purposes only
Copyright© 2011 Transcu Group & Forest Pine Group (NPL, BME, AMT, 3DOM) All Rights Reserved.
Our(3DOM) Technology
Gasoline Car
MITSUBISHI 「i-MiEV」
BYD 「F3DM」
100km
150km
About 500km
Over 500km
Cost of Singapore-KL
S$6
S$60
Intro of FPGPL: If applying 3DOM Technology to the EV…
Figures are meant for illustration and reference purposes only
Copyright© 2011 Transcu Group & Forest Pine Group (NPL, BME, AMT, 3DOM) All Rights Reserved.
Super-Micronization Machine 「NANOMIZER」
Nano-Emulsion Fuel Production System
Production Capacity: 300L/hr
Production Capacity: 1,000L/hr
High fuel-efficiency (5~30% reduction) Gas (NOx, Smoke, CO2, and so on ) reduction (~30%) Wide range of applications (six business areas)
High efficiency and high quality emulsification and dispersion
Intro of FPGPL: Nanomizer PL
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Intro of FPGPL: Application of Nanomizer Technology
Copyright© 2011 Transcu Group & Forest Pine Group (NPL, BME, AMT, 3DOM) All Rights Reserved.
Intro to FPGPL: Possible Applications of Methanol Produced by BME
Fuel Cell for Cell-Phones Fuel Cell for Note PCs
Fuel Cell for Portable
AV Equipment
Copyright© 2011 Transcu Group & Forest Pine Group (NPL, BME, AMT, 3DOM) All Rights Reserved. 19 September 2011
Transcu Group Limited
Key Takeaways
Copyright© 2011 Transcu Group & Forest Pine Group (NPL, BME, AMT, 3DOM) All Rights Reserved.
• Restructuring will benefit Transcu in the form of:
o Reduction in cash outflow:-
Transcu will charge out development costs of continual pharmaceutical business
activities to CPI
Transcu will obtain reimbursement for 80% of the rental expense of office premise
from FPGPL
o Potential cash inflow:-
Sales of 76.5% equity interest in BioMass Energy Corporation for US$2m
Fulfillment of the shareholder’s loan from CEO
Acquisition of 20% of FPGPL whose technologies and products have a robust
prospect
Collaboration with FPGPL to commercialize FPGPL’s technology and products in the
green energy business
Key takeaways
Copyright© 2011 Transcu Group & Forest Pine Group (NPL, BME, AMT, 3DOM) All Rights Reserved. 19 September 2011
Transcu Group Limited
Key Milestones
Copyright© 2011 Transcu Group & Forest Pine Group (NPL, BME, AMT, 3DOM) All Rights Reserved. Copyright© 2011 Forest Pine Group (Transcu, Nanomizer, BME, AMT, 3DOM) All Rights Reserved.
Key Milestones
• Receipt of
independent
valuation reports
Approval from
authority
EGM
34
Week of
07 Nov 2011
Jan
2012
Feb
2012
Jan/Feb
2012
24 Nov
2011
Signing of all
definitive
agreements
Completion of
Restructuring
Plan
Copyright© 2011 Transcu Group & Forest Pine Group (NPL, BME, AMT, 3DOM) All Rights Reserved.
Thank you!