News

General Announcement Acquisition Of Shares And Slot Machine Licences

1. INTRODUCTION
The Board of Directors of Dreamgate Corporation Bhd. ("DCB") wishes to announce that its wholly owned subsidiary, Macrocept Sdn. Bhd. ("MCSB") had on 25 March 2008 entered into the Contract on The Transfer of Shares and Slot Machine Licences ("the Contract") with Chea Din Sun (Cambodian ID No. 010489091) ("CDS") to acquire 100% of the equity interest in CLUB 88 CO., LTD. ("the Shares") and the slot machine licences held by CLUB 88 CO., LTD ("Club 88") for a total consideration of United States Dollar One Hundred Forty-Five Thousand Only (USD145,000) being USD5,000 for the Shares and USD140,000 for the slot machine licences, business licence and any other approvals by relevant authorities and regulatory bodies to commence business in Club 88.

Upon completion of the transaction, Club 88 will become a wholly owned subsidiary of DCB.

2. BACKGROUND INFORMATION
2.1 MCSB
MCSB, a wholly owned subsidiary of DCB, was incorporated in Malaysia under the Companies Act 1965 on 8 June 2006 and has its registered office located at No. 8 Green Hall, 10200 Penang.

The authorised share capital of MCSB is RM100,000 comprising 100,000 ordinary shares of RM1 each and its issued and paid-up share capital is RM2 comprising 2 ordinary shares of RM1 each fully paid. The principal activity of MCSB is investment holding.

2.2 CDS
CDS is a Cambodian national and the sole owner cum shareholder of Club 88.

2.3 CLUB 88
Club 88 is a limited liability company registered and incorporated on the 24 April 2007 with the Ministry of Commerce in accordance with the Cambodian law and having its address at No. 68B Street 384, Sangkat Tuol Svay Prey 2, Khan Chamcar Mon, Phnom Penh, Cambodia. The capital of Club 88 is 20,000,000 Riels comprising 1,000 shares with a par value of 20,000 Riels.

Club 88 is currently dormant and its intended business activities are operating of club activities and all other businesses relating to gaming and leisure industry.

3.  PURCHASE CONSIDERATION
The purchase consideration of USD145,000 being USD5,000 for the Shares and USD140,000 for the slot machine licences, business licence and any other approvals from relevant authorities and regulatory bodies to commence business in Club 88.

The above acquisition will be financed from internally generated funds.

4. RATIONALE AND PROSPECTS
DCB and its group of companies ("DCB Group" or "the Group") is involved in the sales and marketing, technical support and management of gaming and amusement machines and equipment. The above acquisition is in line with DCB's expansion plan to seek for new business opportunities in Cambodia, enhancing growth and ultimately to continuously remain competitive in Cambodia.

Accordingly, Club 88 is expected to contribute positively to the future growth of the DCB Group.

5. RISK FACTORS
The above acquisition is subject to various risks inherent in the industry, including business risks and dependence on key personnel, as well as the prevailing political and economic environment and various other risks.

6. FINANCIAL EFFECTS OF THE TRANSACTION

6.1  Share Capital
The above acquisition will not have any effect on the issued and paid-up share capital of DCB.

6.2  Net Assets Per Share
The above acquisition will not have any significant effect on the consolidated net assets per share of DCB.

6.3  Earnings Per Share And Gearing
The above acquisition is not expected to have any material impact on DCB Group's earnings per share and gearing for the financial year ending 31 December 2008.

6.4 Substantial Shareholders' Shareholding
The above acquisition will not have any effect on the shareholdings of substantial shareholders of DCB.

7. APPROVAL OF SHAREHOLDERS AND RELEVANT GOVERNMENT AUTHORITIES
The above acquisition is not subjected to approval from the shareholders of DCB.

8. DIRECTORS', MAJOR SHAREHOLDERS' AND PERSON CONNECTED TO DIRECTORS AND MAJOR SHAREHOLDERS INTERESTS
None of the directors and major shareholders of DCB or persons connected to them have any interest direct and/or indirect in the above acquisition.

9. SALIENT FEATURES OF CONTRACT
9.1 CDS agreed to sell to MCSB, and MCSB agrees to buy from CDS, 100% equity interest in Club 88 and the slot machine licences, business licence and approvals as mentioned above subject to the terms and conditions set out in the contract.

9.2 The shares to be sold and transferred to MCSB are free from all liens, charges and encumbrances and with full legal and/or beneficial title with effect on and/or before the date of transfer of such shares.

9.3 The slot machine licences shall be valid and enforceable at all times from the date of the contract as well as being legally able to transfer to MCSB of which CDS is fully aware that MCSB is a wholly foreign-owned company.
 
9.4 CDS shall apply with and obtain the abovementioned slot machine licence, business licence and approval at his own cost within 3 months from the date of the Contract. CDS shall ensure that all the slot machine licences, business licence and approvals to be registered and/or transfered in the name of MCSB or its nominee within 3 months from the date of the Contract.

10. ESTIMATED TIME FRAME FOR THE COMPLETION OF THE PROPOSAL
The above acquisition is expected to be completed by end of April 2008.

11. DOCUMENTS FOR INSPECTION
The contract on the transfer of shares and slot machine licences can be inspected by all shareholders of DCB at the Registered Office of DCB at Suite 2-1, 2nd Floor, Menara Penang Garden, 42-A Jalan Sultan Ahmad Shah, 10050 Penang from Mondays to Fridays (except public holidays) during business hours for a period of two (2) weeks from the date of this announcement.

12. STATEMENT BY THE BOARD OF DIRECTORS
The Board of Directors having considered all aspects of the above acquisition is of the opinion that the above acquisition is in the best interest of the Group.

13. COMPLIANCE WITH THE SECURITIES COMMISSION'S POLICIES AND GUIDELINES
To the best of DCB's knowledge, the above acquisition has not departed from the Securities Commission's Policies and Guidelines.

This announcement is dated 27 March 2008.