PROPOSED ISSUANCE OF UP TO RM500.0 MILLION IN NOMINAL VALUE OF PRIVATE DEBT SECURITIES IN THE FORMS OF:

Transcription

1 EASTERN & ORIENTAL BERHAD PROPOSED ISSUANCE OF UP TO RM500.0 MILLION IN NOMINAL VALUE OF PRIVATE DEBT SECURITIES IN THE FORMS OF: (I) MEDIUM TERM NOTES ( MTN ) PURSUANT TO A PROPOSED TWENTY (20)- YEAR MEDIUM TERM NOTE PROGRAMME ( MTN PROGRAMME ); AND/OR (II) COMMERCIAL PAPERS ( CP ) PURSUANT TO A PROPOSED SEVEN (7)- YEAR COMMERCIAL PAPERS PROGRAMME ( CP PROGRAMME ), (COLLECTIVELY REFERRED TO AS THE PROPOSALS ) 1. BACKGROUND INFORMATION (a) Issuer (i) Name : Eastern & Oriental Berhad ( E&O or Issuer ) (ii) Address : Level 3A (Annexe) Menara Milenium 8 Jalan Damanlela Damansara Heights Kuala Lumpur (iii) Business registration number : 555-K (iv) Date and place of incorporation (v) Date of listing, where applicable : 8 June 1927, Malaysia : 16 August 1973 (vi) Status on residence : Resident controlled company (vii) Principal activities : The principal activities of E&O are investment holding and provision of management services to its subsidiaries. The principal activities of its subsidiaries include amongst others, investment holding, hotel ownership and operations, hotel management, housing development, property development, property investment, café and restaurant operations, food catering services, land reclamation and development, general contracting and food and beverage. 1

2 (viii) Board of directors (as at 28 August 2014) : 1. Dato Azizan bin Abd Rahman 2. Dato Tham Ka Hon 3. Mr Chan Kok Leong 4. Mdm Kok Meng Chow 5. Tan Sri Dato Seri Mohd Bakke bin Salleh 6. Dato Seri Abd Wahab bin Maskan 7. Encik Kamil Ahmad Merican 8. Datuk Vijeyaratnam a/l V. Thamotharam Pillay 9. Mr Christopher Martin Boyd 10. Ms Tan Kar Chen Kar Leng (ix) Structure of stockholdings and names of stockholders or, in the case of a public company, names of all substantial stockholders (as at 28 August 2014) : Substantial stockholders Sime Darby Nominees Sendirian Berhad Sime Darby Holdings Berhad Direct 243,978,000 - Stockholdings Indirect % ,978,000 % (1) Sime Darby Berhad ,978, (2) Morning Crest Sdn Bhd 60,000, Dato Tham Ka Hon 45,885, ,371, (3) Goh Geok Khim 2,000, ,558, (4) Goh Yew Lin ,558, (4) GKG Investment Holdings Pte Ltd ,558, (5) G.K. Goh Holdings Limited ,258, (6) CIMB Commerce Trustee Berhad ,234, (7) 2

3 Notes: (1) Deemed interest by virtue of Section 6A(4) of the Companies Act, 1965 ( Act ) held through its shareholding of 100% in Sime Darby Nominees Sendirian Berhad. (2) Deemed interest by virtue of Section 6A(4) of the Act held through its shareholding of 100% in Sime Darby Holdings Berhad, which in turn holds 100% of Sime Darby Nominees Sendirian Berhad. (3) Deemed interest by virtue of Section 6A(4) of the Act held through Morning Crest Sdn Bhd, Pusaka Setia Sendirian Berhad ( Pusaka ) and his spouse s shareholdings in Pusaka. (4) Deemed interest by virtue of Section 6A(4) of the Act held through GKG Investment Holdings Pte Ltd. (5) Deemed interest by virtue of Section 6A(4) of the Act held though Alpha Securities Pte Ltd, Future Equity Investments Ltd and G.K. Goh Holdings Limited. (6) Deemed interest by virtue of Section 6A(4) of the Act held through G.K. Goh Strategic Holdings Pte Ltd and Cacona Pte Ltd. (7) Held in trust by CIMB Commerce Trustee Berhad as Trustee for Libra Strategic Opportunity Fund. (x) Authorised, issued and paid-up capital (as at 28 August 2014) : Authorised capital RM2,000,000, comprising 2,000,000,000 E&O Stock Units. Paid-up capital RM1,140,944,610 comprising 1,140,944,610 E&O Stock Units of which 29,439,400 E&O Stock Units are held as treasury stock units. (xi) Disclosure of the following: If the Issuer or its board members have been convicted or charged with any offence under the securities laws, corporation laws or other laws involving : None. 3

4 fraud or dishonesty in a court of law, for the past five (5) years prior to the date of application; and If the Issuer has been subjected to any action by the stock exchange for any breach of the listing requirements or rules issued by the stock exchange, for the past five(5) years prior to the date of application. : None. 4

5 2. PRINCIPAL TERMS AND CONDITIONS (a) Names of parties involved in the proposal, where applicable: (i) Principal adviser : Hong Leong Investment Bank Berhad ( HLIB ) (ii) Lead arranger : HLIB (iii) Co-arranger : Not applicable (iv) Solicitor : Messrs. Albar & Partners, acting for HLIB as Principal Adviser and Lead Arranger ( Solicitors ) (v) Financial adviser : Not applicable (vi) Technical adviser : Not applicable (vii) Bond trustee : Pacific Trustees Berhad ( Trustee ) (viii) Guarantor : Not applicable (ix) Valuer : Not applicable (x) Facility agent : HLIB (xi) Primary subscriber (under a boughtdeal arrangement) and amount subscribed : To be determined, if applicable, prior to each issuance. (xii) Underwriter amount underwritten and : CPs The CPs will not be underwritten. MTNs The MTNs will not be underwritten. (xiii) Central depository : Bank Negara Malaysia ( BNM ) (xiv) Paying Agent : BNM (xv) Reporting accountant : Not applicable (xvi) Calculation agent : Not applicable 5

6 (xvii) Others specify) (please (a) Lead Manager for the Proposals : HLIB (b) Joint Managers the Issuance RCMTNs Lead for First of : HLIB and CIMB Investment Bank Berhad (b) Facility description : Proposed issuance of up to RM500.0 million in nominal value of private debt securities in the forms of: (i) medium term notes ( MTNs ) pursuant to a proposed twenty (20)-year medium term note programme ( MTN Programme ); and/or (ii) commercial papers ( CPs ) pursuant to a proposed seven (7)-year commercial papers programme ( CP Programme ). For the avoidance of doubt, the combined limit of both the MTN Programme and the CP Programme shall not exceed RM500.0 million in nominal value at any point of time during the tenure of the MTN Programme and/or the CP Programme. The MTN Programme and the CP Programme shall be collectively referred to as the Proposals. The CPs and MTNs to be issued under the Proposals shall be collectively referred to as the Notes. The MTN Programme shall entail the issuance of the following MTNs: (a) redeemable convertible MTNs ( RCMTNs ); and/or (b) redeemable non-convertible MTNs. The MTNs may be issued in series. The first issuance under the MTN Programme shall comprise of a five (5)-year RCMTNs of up to RM350.0 million in nominal value ( First Issuance of RCMTNs ). Thereafter, the MTNs may be issued in the form of RCMTNs or 6

7 (c) (d) Issue/debt programme size Tenure of issue/debt programme redeemable non-convertible MTNs at the option of the Issuer. The RCMTNs issued under the MTN Programme are convertible into new E&O Stock Units to be listed on the Main Market of Bursa Malaysia Securities Berhad ( Bursa Securities ), exercisable by the holders of the RCMTNs subject to the Conversion Rights (as defined in item 2(v)(xiii)(a) below), Conversion Period (as defined in item 2(v)(xiii)(b) below) and Conversion Price (as defined in item 2(v)(xiii)(c) below). : The Proposals shall have a combined issue size of up to RM500.0 million in nominal value. : Tenure of the MTN Programme Twenty (20) years from the date of the First Issuance of RCMTNs provided always that the First Issuance of RCMTNs shall be made within two (2) years from the date of SC s authorisation. Tenure of the CP Programme Seven (7) years from the date of the first issuance of CPs provided always that the first issuance of CPs shall be made within two (2) years from the date of SC s authorisation. Tenure of the MTNs The MTNs may be issued in series. In the case of the First Issuance of RCMTNs, such RCMTNs shall have the tenure of five (5) years from the date of its issue provided always that the maturity date of the respective RCMTNs shall not exceed the remaining tenure of the MTN Programme. In the case of all other issuances, the MTNs shall have a tenure of more than one (1) year as may be determined by the Issuer and agreed by the Lead Arranger/Lead Manager, provided always that the maturity date of the respective MTNs shall not exceed the remaining tenure of the MTN Programme. Tenure of the CPs The CPs issued shall have a tenure of one (1) year or less as may be determined by the Issuer and agreed by the Lead Arranger/Lead Manager, provided always that the maturity date of the respective CPs shall not exceed the remaining tenure of the CP Programme. 7

8 (e) (f) (g) (h) Availability period of debt programme Interest/coupon rate Interest/coupon payment frequency Interest/coupon payment basis : MTN Programme The MTN Programme is available for issuance throughout the tenure of the MTN Programme upon completion of documentation and compliance of all Conditions Precedent (as defined in item 2(q) below), unless waived by the Lead Arranger and other applicable conditions to the satisfaction of the Lead Arranger. CP Programme The CP Programme is available for issuance throughout the tenure of the CP Programme upon completion of documentation and compliance of all Conditions Precedent, unless waived by the Lead Arranger and other applicable conditions to the satisfaction of the Lead Arranger. : MTNs The coupon rate for the MTNs shall be determined by the Issuer and the Lead Arranger/Lead Manager prior to each issuance. CPs Not applicable as the CPs will be issued at a discount. : MTNs The coupon will be payable semi-annually in arrears or such other period to be determined by the Issuer and the Lead Arranger/Lead Manager prior to each issuance subject to the rules issued by Malaysian Electronic Clearing Corporation Sdn Bhd ( MyClear ) as amended and/or substituted from time to time or its successors-in-title or successor in such capacity during the tenure of the MTNs. CPs Not applicable as the CPs will be issued at a discount. : MTNs The coupon will be calculated based on the actual number of days elapsed over 365 days basis (actual/365) or in any event, in accordance with the rules of MyClear. CPs Not applicable as the CPs will be issued at a discount. 8

9 (i) Security/collateral, where applicable : None. (j) Details on utilisation of proceeds by Issuer : The net proceeds arising from the issuance of the Notes (after the deduction of expenses incidental to the Proposals) will be utilised for the purposes of investments, land acquisition and/or property development expenditure and/or general working capital requirements of the Issuer and/or its subsidiaries ( Group ). The proceeds arising from the First Issuance of RCMTNs will be utilised as follows: Proposed utilisation Investments, land acquisition and/or property development expenditure General working capital of the Group Amount in nominal value Note (RM 000) (a) 334,000 (b) 10,000 Estimated expenses incidental (c) 6,000 to the Proposals TOTAL 350,000 Notes: (a) The Issuer may utilise the available proceeds for strategic acquisitions and/or expansions which may include acquisition of land banks for future property development projects and/or strategic collaborations, joint ventures or alliances in respect of its properties (property development and property investment), hospitality and lifestyle and/or investments and others divisions. Property development expenditures will include, amongst others, but is not limited to payments to contractors, suppliers and consultants, authority/statutory fees, capital outlay for property development joint ventures. (b) General working capital of the Group are day-to-day administrative, operational and finance expenses in conducting the business of the Group. Any surplus or shortfall will be adjusted accordingly from/to the portion 9

10 (k) Sinking fund and designated accounts, where applicable being earmarked for investments, land acquisition and/or property development expenditure. (c) The estimated expenses relating to the Proposals comprise, amongst others, the professional fees, fees payable to the relevant authorities, printing costs of the circular to be despatched to the stockholders of the Issuer and other miscellaneous expenses. Any surplus or shortfall will be adjusted accordingly from/to the portion being earmarked for investments, land acquisition and/or property development expenditure. No proceeds will be raised from the conversion of the RCMTNs into new E&O Stock Units as the conversion will be wholly satisfied through the issuance of the new E&O Stock Units in accordance with the exercise of the Conversion Rights. All converted RCMTNs will be cancelled and cannot be re-issued. : Not applicable (l) Rating : MTN Programme (a) First Issuance of RCMTNs Pursuant to paragraph 4.04 (a) of the SC s Guidelines on Private Debt Securities, the first issue under a debt programme must be rated. However, the first issuance under the MTN Programme is envisaged to involve the issuance of RCMTNs, such RCMTNs are exempted from rating requirements pursuant to paragraph 4.11(c) of the SC s Guidelines on Private Debt Securities on the following basis: (i) holders of the RCMTNs are given the right to convert the RCMTNs into new E&O Stock Units at any time during the tenure of the RCMTNs; and (ii) the underlying E&O Stock Units are listed on Bursa Securities. (b) Subsequent issuances of MTNs In the event subsequent issuances involve the issuance of redeemable non-convertible MTNs, such issuances will be rated and that rating will be assigned prior to each of such issuances. 10

11 In the event subsequent issuances involve the issuance of RCMTNs, such issuances of RCMTNs shall be exempted from rating requirements pursuant to paragraph 4.11(c) of the SC s Guidelines on Private Debt Securities on the following basis: (i) holders of the RCMTNs are given the right to convert the RCMTNs into new E&O Stock Units at any time during the tenure of the RCMTNs; and (ii) the underlying E&O Stock Units are listed on Bursa Securities. CP Programme The CPs will not be rated given that such CPs are non-transferable and non-tradable and prior to issuance of such CPs, the investors of such CPs would have given their confirmation that they do not require a rating. (i) Credit rating assigned (ii) Name of credit rating agencies : To be assigned, if applicable. : To be appointed, if applicable. (m) Mode of issue : MTNs The MTNs may be issued via bought deal, bookbuilding and/or private placement on a best effort basis, without the issuance of a prospectus. CPs The CPs may be issued via bought deal, book-building and/or private placement on a best effort basis, without the issuance of a prospectus. (n) Selling restriction, including tradability (i.e. whether tradable or non-tradable) : Selling restrictions at issuance The Notes may only be offered, sold, transferred or otherwise disposed directly or indirectly, to a person to whom an offer or invitation to subscribe for the Notes and to whom the Notes are issued would fall within: 1. Schedule 6 (or Section 229(1)(b)); or 2. Schedule 7 (or Section 230(1)(b)); read together with 3. Schedule 9 (or Section 257(3)), 11

12 (o) Listing status and types of listing, where applicable of the Capital Markets and Services Act, 2007, as amended from time to time ( CMSA ). Selling restrictions after issuance The MTNs may only be offered, sold, transferred or otherwise disposed directly or indirectly, to a person to whom an offer or invitation to subscribe for the MTNs and to whom the MTNs are issued would fall within: 1. Schedule 6 (or Section 229(1)(b)); read together with 2. Schedule 9 (or Section 257(3)), of the CMSA. The MTNs are tradable and transferable while the CPs are non-tradable and non-transferable. : The Notes will not be listed on any stock exchange. (p) Other regulatory approvals required in relation to the issue, offer or invitation to subscribe or purchase PDS, and whether or not obtained : Not applicable (q) Conditions precedent : Conditions precedent to First Issuance of RCMTNs Subject to such other conditions as may be required by the Lead Arranger/Lead Manager, the Lead Arranger/Lead Manager shall have received the following in form and substance acceptable to the Lead Arranger/Lead Manager: 1. Authorisation from the SC for the Proposals and the compliance with all conditions of such authorisation, where applicable; 2. All relevant approvals/consents required for the Proposals, including but not limited to the relevant regulatory authorities and approval from 12

13 the stockholders of the Issuer; 3. Satisfactory completion and execution of all the Transaction Documents (as defined in item 2(v)(vi) below) and any other necessary documents, and where applicable, stamped (unless otherwise exempted) and presented for registration with the relevant authorities; 4. Certified true copies of the Certificate of Incorporation, Memorandum and Articles of Association, latest Forms 24, 44 and 49 of the Issuer; 5. Certified true copy of the board resolution of the Issuer authorising, amongst others, the execution of the Transaction Documents and issuance of the Notes; 6. A list of the Issuer s authorised signatories and their respective specimen signatures; 7. A winding up search report on the Issuer with the Director General of Insolvency s office confirming that the Issuer has not been wound up; 8. Satisfactory legal opinion from the Solicitors, to be addressed to the Principal Adviser/Lead Arranger, advising with respect to, the legality, validity and enforceability of the Transaction Documents and written confirmation that all conditions precedent have been fulfilled; 9. Documentary evidence that the Trustee Reimbursement Account (as defined in item 2(v)(viii) below) has been established and the deposit of RM30,000 has been made; 10. Evidence that all fees, costs and expenses in relation to establishing the Proposals have been paid in full to the extent that the same are due and payable before the First Issuance of RCMTNs; 11. Satisfactory due diligence opinion from the Solicitors, to be addressed to the Lead Arranger/Lead Manager in a form and substance 13

14 (r) Representations and warranties satisfactory to the Lead Arranger/Lead Manager; and 12. Such other conditions to be advised by the Solicitors and mutually agreed between the Lead Arranger/Lead Manager and the Issuer, if any. Conditions precedent to each issuance of the Notes Subject to such other conditions as may be required by the Lead Manager, the Facility Agent shall have received the following in form and substance acceptable to the Lead Manager: 1. Receipt of the Issuer s certification that it is in compliance with all representations and warranties, covenants and no Event of Default has occurred or will occur under the Transaction Documents; and 2. Such other conditions to be advised by the Solicitors and mutually agreed between the Lead Manager and the Issuer. : Representations and warranties will include such representations and warranties customary and standard for an issuance of this nature and shall include, but not limited to the following: 1. The Group is duly established and validly in existence and have the power and authority to carry out their respective businesses; 2. The Issuer has the power to enter into the Transaction Documents and exercise its rights to perform its obligations under the Transaction Documents; 3. Entry into and the exercise of the rights, performance and obligations of the Issuer under the Transaction Documents do not violate any existing law or regulation or agreements to which it is a party; 4. The Transaction Documents constitute legal, valid, binding and enforceable obligations of which are enforceable on and against the Issuer; 14

15 5. All necessary actions, authorisations, consents and approvals required under the Transaction Documents and the Proposals have been obtained, fulfilled and remain in full force and effect; 6. The audited financial statements of the Issuer for each of its financial year have been prepared on a basis consistently applied in accordance with the approved accounting principles and standards in Malaysia and give a true and fair view of the results of its operations for that year and the state of its affairs at that date; 7. There is no winding up petition or any litigation or arbitration that would have a Material Adverse Effect on the ability of the Issuer to perform its obligations under the relevant Transaction Documents; 8. There has been no event or occurrence which constitutes a violation of the law or contravention of or default under any agreement, by the Issuer which may have a Material Adverse Effect; 9. There is no change in its business condition (financial or otherwise), performance or results of the operations of the Issuer which may have a Material Adverse Effect; 10. All registration and payment of any duty or tax or other action which are required or necessary to ensure the legality, validity, enforceability or admissibility in evidence in Malaysia of the Transaction Documents have been duly and unconditionally obtained and remain in full force and effect; 11. To the best of the Issuer s knowledge upon reasonable inquiry being made, there is no change of law or other governmental action has occurred which shall make it improbable for the Issuer to perform covenants and obligations on its part to be performed under the Transaction Documents; and 12. No event which would constitute an Event of Default has occurred or is continuing. 15

16 Material Adverse Effect means, in relation to any event, the occurrence of which in the reasonable opinion of the Trustee may materially and adversely affect: (i) the business or condition (financial or otherwise), operations or prospects of E&O and/or its Principal Subsidiaries (as defined below) taken as a whole; (ii) (iii) the ability of the Issuer to perform any of its obligations under any of the Transaction Documents; or the legality, validity or enforceability of any of the Transaction Documents and/or the rights, benefits and remedies available to the Trustee or the holders of the Notes ( Noteholders ) under the Transaction Documents. (s) Events of default and enforcement event, where applicable Principal Subsidiaries means any subsidiary and jointly controlled entities of the Issuer whose profits or losses after tax or (in case of a subsidiary or jointly controlled entity of the Issuer which itself has subsidiaries and jointly controlled entities) consolidated losses or profits after tax, as shown by its latest audited consolidated statements of comprehensive income corresponding to the latest audited consolidated statements of comprehensive income of the Issuer, are at least 10% of the consolidated profits or losses (as the case may be) after tax as shown by the latest audited consolidated statements of comprehensive income of the Issuer. : Events of Default typical and customary for a transaction of this nature and are in compliance with the SC s Trust Deed Guidelines which shall include but not limited to the following: 1. Any default in payment of any principal or coupon under the Notes on the due date(s) and such default is not remedied within seven (7) business days after the relevant due date(s); 2. The Issuer breaches any of its obligations or terms and conditions under any of the relevant Transaction Documents (other than under item 16

17 (1) above) which is not capable of remedy or which in the opinion of the Trustee is capable of being remedied, remains unremedied for thirty (30) days after written notice of such failure has been given to the Issuer by the Trustee, or after the Issuer has become aware of such default, whichever is earlier; 3. Any representation or warranty made or implied under any provision of the Transaction Documents or any information, notice, opinion or certificate or other document delivered pursuant to the terms of the Transaction Documents proves to have been incorrect or misleading in any material respect from the date on which the representation or warranty was made or was deemed made and such representation or warranty shall have a Material Adverse Effect; 4. Any consent referred to in the Transaction Documents is revoked or withheld or modified to the extent that the modification shall have a Material Adverse Effect, or is otherwise not granted or fails to remain in full force and effect; 5. The Issuer or any of its Principal Subsidiaries enters into or proposes to enter into, or there is declared by any competent court or authority, a moratorium on the payment of indebtedness or other suspensions of payments generally; 6. Any provision of the Transaction Documents is or becomes illegal, void, voidable or unenforceable; 7. Any step or action is taken for the winding up, dissolution or liquidation of the Issuer or any of its Principal Subsidiaries (including, without limitation, the presentation of a petition for the winding up against the Issuer or any of its Principal Subsidiaries or the making of any order or the passing of any resolution for the winding up, dissolution or liquidation of the Issuer or any of its Principal Subsidiaries save and except for the following:- (i) any petition or proceeding which is contested by the Issuer or such Principal 17

18 Subsidiary in good faith and set aside within thirty (30) days of its presentation (or such extended period as the Trustee may consent, such consent shall not be unreasonably withheld); (ii) in the case of a Principal Subsidiary where the management and operation thereof are governed by terms under a joint venture agreement or a shareholders agreement or any other document having similar effect, any petition or proceeding to voluntary wind up such Principal Subsidiary as a result of a completion of the project undertaken by such Principal Subsidiary in accordance with the terms of such joint venture agreement or shareholders agreement or document; 8. The Issuer or any of its Principal Subsidiaries undergoes any scheme of reconstruction arrangement or compromise pursuant to Section 176 of the Act or the same has been instituted against it; 9. A receiver, manager, liquidator, trustee, administrator or similar officer is appointed in respect of the Issuer or any of its Principal Subsidiaries or in respect of all or any substantial part of the respective assets, properties or undertaking of the Issuer or any of its Principal Subsidiaries; 10. The Issuer or any of its Principal Subsidiaries ceases or threatens to cease to carry on all or a substantial part of its business; 11. The Issuer or any of its Principal Subsidiaries becomes insolvent or commits an act of insolvency or is unable to pay its debts as they fall due or any final judgment or judgments is or are obtained against the Issuer or any of its Principal Subsidiaries; 12. The Issuer or any of its Principal Subsidiaries stops, suspends or threatens to stop or suspend payment of all or any part of its debts, begins 18

19 negotiations or takes any proceedings or other steps with a view of readjustment, rescheduling or deferral of all of its indebtedness (or of any part of its indebtedness which it will or might otherwise be unable to pay when due) or proposes or makes a general assignment or any arrangement or composition with or for the benefit of its creditors; 13. Any indebtedness for borrowed monies of the Issuer or any of its Principal Subsidiaries becomes due or payable or capable of being declared due or payable prior to its stated maturity by reason of a default by the Issuer or any of its Principal Subsidiaries in its obligations in respect of the same, or the Issuer fails to make payment in respect thereof on the due date for such payment or if due on demand when demanded or the security for any such indebtedness for borrowed monies becomes legally enforceable or any guarantee or similar obligations of the Issuer or any of its Principal Subsidiaries for any indebtedness for borrowed monies is not discharged at maturity or when called; 14. Any event has occurred or a situation exists which in the opinion of the Trustee has a Material Adverse Effect; or 15. Any consent, authorisation, license, concession and approval from the relevant authorities granted to the Issuer, and/or any of its Principal Subsidiaries for the purposes of their respective businesses is revoked, expired or suspended for any reason whatsoever and such revocation, expiration or suspension has a Material Adverse Effect. Upon occurrence of any of the above events and which is continuing, the Trustee may, or if instructed by the Noteholders holding not less than seventy five percent (75%) in nominal value of the Notes by way of an extraordinary resolution, shall by written notice to the Issuer declare that an Event of Default has occurred whereupon: (a) the outstanding aggregate nominal value of the 19

20 Notes together with the coupon and all other amounts accrued or outstanding under the Transaction Documents shall become immediately due and payable by the Issuer to the Noteholders; and (b) the Trustee shall be entitled to exercise their rights to enforce any provisions under the Transaction Documents. (t) Covenants (i) Positive Covenants : Positive covenants typical and customary for a transaction of this nature and are in compliance with the SC s Trust Deed Guidelines which shall include but not limited to the following: 1. The Issuer will preserve and keep in full force and effect all approvals and rights necessary for the conduct of its business; 2. The Issuer will exercise reasonable diligence in carrying out its business in a proper and efficient manner which should ensure, amongst others, that all necessary approvals or relevant licenses are obtained and maintained; 3. The Issuer will maintain and keep proper books and accounts at all times in compliance with applicable statutory requirements and in accordance with generally accepted accounting principles in Malaysia and subject to reasonable advance written notice being given to the Issuer, provide the Trustee and any person appointed by it (eg. auditors) access to such books and accounts to the extent permitted by law; 4. The Issuer will comply with all provisions and perform all its obligations under the Transaction Documents; 5. The Issuer will maintain and/or cause to be maintained such insurances with a licensed insurance company or companies in respect of its assets and business, against all risks which a reasonable company carrying on a business similar to that of the Issuer would normally insure; 20

21 6. The Issuer will promptly comply with all applicable laws including the provisions of the CMSA, and/or notes, circular, conditions or guidelines issued by the SC from time to time; 7. The Issuer will use its best endeavours to maintain or cause the maintenance of the listing of its E&O Stock Units on Bursa Securities; 8. The Issuer will obtain the approval from the stockholders of the Issuer for subsequent issuances of the RCMTNs; 9. The Issuer will maintain a paying agent or its equivalent, who is based in Malaysia and procure the paying agent to notify the Trustee, through the Facility Agent, in the event the paying agent does not receive payment from the Issuer on the due dates as required under the relevant Transaction Documents; 10. The Issuer will not later than hundred and thirty (130) days after the end of its financial year, furnish to the Trustee one copy of its annual audited financial statements; 11. The Issuer will not later than seventy (70) days after the end of each financial half-year period, furnish to the Trustee one copy of its semiannual unaudited results; 12. The Issuer will promptly and in any event no later than thirty (30) days, after receipt of such request from the Trustee, give to the Trustee any information which the Trustee may reasonably require in order to discharge its duties and obligations under the Transaction Documents relating to the Issuer s affair to the extent permitted by law; 13. The Issuer will promptly deliver to the Trustee any notices, circulars and other documents despatched by the Issuer to its stockholders; 14. The Issuer will not later than hundred and thirty (130) days after each of its financial year end, deliver to the Trustee, a certificate confirming 21

22 that the Issuer has complied with all its obligations under the Transaction Documents and the terms and conditions of the Notes and that there did not exist or has not existed, from the date the Notes were issued or date of the previous certificate as the case may be, any Event of Default, where applicable and if such is not the case, to specify the same with details of the same; and 15. The Issuer will notify the Trustee in writing immediately of: (i) (ii) (iii) (iv) (v) (vi) the occurrence of an Event of Default or any right or remedy under the terms of the relevant Transaction Documents shall have become immediately enforceable; any circumstances that have occurred that would materially prejudice the Issuer and/or any other matter that may materially prejudice the interest of the Noteholders; any claim against it which would have Material Adverse Effect upon the ability of the Issuer to perform its obligations under the Transaction Documents to which it is a party and shall defend itself against such claims; any change in the withholding tax position or taxing jurisdiction of the Issuer insofar as it affects the payment obligations of the Issuer; any change in the utilisation of proceeds from the Proposals where the Transaction Documents set out a specific purpose for which proceeds are to be utilised; any substantial change in the nature of the business of the Issuer; (vii) any change in the directorship and management and substantial stockholder or any other changes that may materially and adversely affect its business condition (financial or otherwise) of the Group; and 22

23 (ii) Negative Covenants (viii) the occurrence of any event that has caused or could cause, one or more of the following: (a) any amount payable under the Notes to become immediately payable; (b) the Notes to become immediately enforceable pursuant to the occurrence of an Event of Default; or (c) any other rights or remedy under the terms, provisions or covenants of the Notes or the Trust Deed to become immediately enforceable. : Negative covenants typical and customary for a transaction of this nature and are in compliance with the SC s Trust Deed Guidelines which the Issuer, will not, without the prior written consent of the Trustee (acting on the instruction of the Noteholders by way of an extraordinary resolution) including but not limited to the following: 1. The Issuer will not permit any amendment, supplement or variation to its Memorandum and Articles of Association in a manner inconsistent with the Transaction Documents to which it is a party or which may be materially prejudicial to the interests of the Noteholders; 2. The Issuer will not reduce or in any way alter (except by way of an increase) its authorised and issued paid-up capital which may have a Material Adverse Effect on the Issuer s ability to perform any of its obligations under the Transaction Documents; 3. The Issuer will not change the utilisation of proceeds from the Notes where the relevant Transaction Documents sets out a specific purpose for which proceeds are to be utilised; 4. The Issuer will not enter into a transaction, whether directly or indirectly with Interested Persons (as defined in item 2(v)(x) below) unless: 23

24 (i) (ii) such transaction shall be on terms that are no less favourable to the Issuer than those which could have been obtained in a comparable transaction from persons who are not Interested Persons; with respect to transaction involving an aggregate payment or value which would trigger any applicable percentage ratio as provided in the Main Market Listing Requirements of Bursa Securities ( Listing Requirements ), the Issuer obtains certificate from an independent adviser that the transaction is carried out on fair and reasonable terms; provided that the Issuer certifies to the Trustee that the transaction complies with paragraph 4(i) above, that the Issuer has received the certification referred to in paragraph 4(ii) above (where applicable) and that the transaction has been approved by the majority of the board of directors and stockholders of the Issuer in a general meeting as the case may require; and (iii) with respect to transactions constituting a recurrent related-party transaction of a revenue or trading nature ( RRPT ) such transactions which are provided for and permitted under the Listing Requirements, provided that the Issuer certifies to the Trustee that the transaction complies with paragraph 4(i) above, that the Issuer has obtained or renewed, where applicable, the stockholders mandate in accordance with the Listing Requirements and that the Issuer furnishes at least one certificate to the Trustee in respect of the RRPT contemplated under one stockholders mandate; 5. The Issuer shall not enter into dissolution or winding up of itself; 6. The Issuer will not surrender, transfer, assign, relinquish or otherwise dispose of any of its rights and interest under any of the Transaction Documents; and 24

25 (u) Provisions on buyback and early redemption of PDS 7. The Issuer shall not enter into amalgamation, consolidation, merger, reconstruction which may materially and adversely affect its ability to perform its obligations pursuant to the relevant Transaction Documents. : Buy-back MTNs The Issuer may at any time prior to the maturity, purchase the MTNs in the open market or by private treaty for cancellation. All MTNs repurchased shall be cancelled and cannot be resold. CPs The CPs shall not be transferable and tradable in the secondary market, as such the Issuer or any of its subsidiaries or agent(s) may not purchase the CPs in the open market or by private treaty. Provision for Early Redemption Not applicable (v) Other principal terms and conditions for the proposal (i) Form and denomination : Form Each issue of the Notes shall be presented by a Global Certificate to be deposited with BNM and shall be in bearer form. No physical delivery of the Notes is permitted. Denomination Each issue of the Notes will be issued in denomination and multiples of RM1.0 million if issued through the rules of MyClear or such other denominations as shall be agreed upon between the Lead Arranger/Lead Manager and the Issuer. (ii) Issue Price : MTNs The MTNs may be issued at par or at a discount or at a premium to the nominal value and the issue price shall be calculated in accordance with the Operational 25

26 Procedures for Securities Services issued by MyClear, as amended or substituted from time to time. CPs The CPs may only be issued at a discount to the nominal value and the issue price shall be calculated in accordance with the Operational Procedures for Securities Services issued by MyClear, as amended or substituted from time to time. (iii) Redemption at Maturity : MTNs Unless previously converted or purchased and cancelled, all outstanding MTNs will be redeemed at par on the maturity date. (iv) Status Ranking and CPs All outstanding CPs will be redeemed at par on the maturity date. : The Notes constitute direct, unconditional, unsubordinated and unsecured obligations of the Issuer ranking pari passu without discrimination, preference or priority among themselves and pari passu with all other present and future unsecured and unsubordinated obligations of the Issuer from time to time (subject to those preferred by law). (v) Taxes : All payments in respect of the Notes will be made by the Issuer after deducting or withholding any amount for or on account of any present or future taxes or duties of whatsoever nature imposed or levied by the Government of Malaysia or any authority thereof or therein having power to tax and which are required by law to be deducted or withheld. (vi) Transaction Documents : The Trust Deed in respect of the Notes and such other legal documents and agreements necessary in relation thereto in form and substance acceptable to the Lead Arranger/Lead Manager, Trustee and the Issuer. (vii) Trust Deed : The Notes shall be constituted by a trust deed, which shall be administered by the Trustee acting on behalf of the Noteholders. (viii) Trustee Reimbursement Account : The Issuer shall open and maintain an account designated as Trustees Reimbursement Account for Debenture holders Actions (as required under the SC s Trust Deeds Guidelines in which a sum of 26

27 RM30, is to be deposited ( Trustees Reimbursement Account ). The Trustees Reimbursement Account shall be operated by the Trustee and the monies shall only be used strictly by the Trustee in carrying out its duties in relation to the occurrence of Events of Default which are provided in the Trust Deed. The sum of RM30, in the Trustees Reimbursement Account shall be maintained at all times throughout the tenure of the Notes. (ix) Legal fees, stamp duty and other expenses : All costs and expenses including but not limited to legal and other professional fees, stamp duty (if any), out-of-pocket expenses, fees for the Central Depository, Paying Agent, Trustee, SC and other regulatory fees (if any), and other costs and expenses, shall be for the account of the Issuer and on a full indemnity basis. (x) Interested Persons : The Notes held by the Issuer or any interested person of the Issuer shall not be counted for purposes of (a) constituting quorum of meetings of Noteholders; and (b) voting at any meeting of the Noteholders. The interested person shall include directors, major shareholders and chief executive as defined under the SC s Trust Deeds Guidelines but will not include the categories of major shareholders as provided under the exception in paragraph of the SC s Trust Deeds Guidelines. (xi) Governing Laws : The Notes and the Transaction Documents shall be governed by the laws of Malaysia and be subject to the exclusive jurisdiction of the courts of Malaysia. (xii) Other conditions : The Notes shall at all times be subject to such guidelines, rules and directives to be issued from time to time by the SC and/or any other authorities having jurisdiction over matters pertaining to the Notes. (xiii) Other principal terms and conditions for the RCMTNs only (a) Conversion Rights : The holders of the RCMTNs shall have the right to convert all or any part of the RCMTNs into fully paid new E&O Stock Units at the Conversion Price at any time during the Conversion Period, subject to such holder giving prior irrevocable written notice to the 27

28 Issuer within a timeframe to be stipulated in the Trust Deed. (b) Conversion Period (c) Conversion Price : The RCMTNs is convertible into new E&O Stock Units at the discretion of the holders of the RCMTNs at any time during the tenure of the said RCMTNs. : The conversion price for the First Issuance of RCMTNs will be determined at a later date by the Issuer and Lead Arranger/Lead Manager. The conversion price for subsequent issuances of RCMTNs will be determined by the Issuer and Lead Arranger/Lead Manager. The Conversion Price is subject to adjustments pursuant to certain events as set out in the Trust Deed to be entered into (including but not limited to any alteration in the capital structure of the Issuer during the tenure of the RCMTNs whether by way of rights issue, bonus issue, or other capitalisation issue, consolidation or subdivision of E&O Stock Units or reduction of capital or otherwise howsoever). (d) Status of new E&O Stock Units (e) Winding-up/ liquidation : The new E&O Stock Units to be issued pursuant to the conversion of the RCMTNs will upon allotment and issue, rank pari passu in all respects with the then existing E&O Stock Units in issue except that they will not be entitled to any dividends, rights, allotment or other distributions that may be declared, made or paid prior to the relevant allotment date of the said E&O Stock Units. : If prior to the maturity date a resolution is passed for a voluntary winding-up of the Issuer then: (a) (b) if such winding-up is for the purpose of reconstruction or amalgamation pursuant to a scheme of arrangement to which the holders of the RCMTNs or some person designated by them for such purpose, shall be a party, the terms of such scheme of arrangement if approved by special resolution shall be binding on all the holders of the RCMTNs; and in any other case every holders of the RCMTNs shall upon and subject to the Trust Deed at any time within six (6) weeks after the passing of 28

29 such resolution for a members voluntary winding-up of the Issuer deliver to the Issuer a duly completed conversion notice in relation to the RCMTNs to elect to be treated as if he had on the last day of the month immediately before the commencement of such winding-up, exercised the Conversion Rights to the extent specified in the conversion notice(s) and had on such date been the holder of the new E&O Stock Units to which he would have become entitled pursuant to such exercise and the liquidator of the Issuer shall give effect to such election accordingly. Upon such election taking effect, all RCMTNs converted under such election shall cease to carry any coupon as from the last day of the month immediately preceding the month in which the RCMTNs are converted or deemed converted under this provision. All Conversion Rights which have not been exercised at the expiry date of the said period of six (6) weeks after the passing of such resolution shall lapse and cease to be valid for any purpose. 29