KUALA LUMPUR: DXN Holdings Bhd
’s indirect wholly-owned subsidiary, DXN Marketing (Brasil) LTDA (DXN Brasil), has entered into a Reciprocal Commitment Agreement with the Municipality of Ibia for the proposed development of an industrial plant in Minas Gerais, Brazil.
Under the agreement, DXN, a wellness and direct-selling company, is expected to invest not less than BRL100 million (BRL100=RM78) in the proposed project over five years from the date of registration of the public deed of donation with the Real Estate Registry Office of Ibia.
In a Bursa Malaysia filing today, DXN said the municipality has agreed to donate, subject to charges, a parcel of municipal land measuring approximately 10 hectares within Business and Industrial Zone 2 in Ibia, Minas Gerais, for the proposed project.
The group is also required to create and maintain between 200 and 250 direct and indirect jobs, as well as maintain continuous operation of the plant for a minimum of seven years from the date of issuance of the relevant operating licence.
DXN said the five-year investment period and seven-year operational period are separate and independent obligations which will run concurrently to the extent that the respective periods overlap.
The company said the terms differ from those previously disclosed under the non-binding memorandum of understanding (MOU), following further discussions and negotiations between the parties.
Under the earlier MOU, the conditions to be fulfilled by the group were subject to a minimum period of eight years, while full ownership of the allocated land was to vest after five years of continuous operation of the industrial plant.
Following the negotiations, the minimum operating period has been revised to seven years.
DXN said that while ownership of the allocated land will vest in DXN Brasil upon registration of the deed, the subsidiary will only obtain full and unconditional ownership after fulfilling all obligations under the agreement, including the seven-year operating requirement. - Bernama
