PRINCIPAL TERMS AND CONDITIONS OF THE ICULS

Transcription

1 PRINCIPAL TERMS AND CONDITIONS OF THE ICULS

2 1. BACKGROUND INFORMATION Senai Desaru Expressway Berhad (a) Issuer (i) (ii) (iii) (iv) (v) Name Senai - Desaru Expressway Berhad ( SDEB ) Address 39-43, Jalan Desa Taman Desa Off Jalan Klang Lama Kuala Lumpur Business registration no A Date/place of incorporation 18 April 2003/Malaysia Date of listing (in case of a public listed company) as SDEB is not a public listed company (vi) Status : Resident/non-resident controlled company Resident controlled company : Bumiputera/non-Bumiputera controlled company Bumiputera controlled company (vii) Principal activities A special purpose company to undertake the design, construction, management, operation and maintenance of an expressway linking Senai with Pasir Gudang and Desaru, in the State of Johor, Malaysia pursuant to the Concession Agreement (defined as the concession agreement entered into between the Government and SDEB dated 31 July 2004 for the design, construction, management, operation and maintenance of the expressway by SDEB together with the right to collect and retain toll for its own benefit from all vehicles using the expressway and liable to pay such tolls) THE REST OF THIS PAGE IS INTENTIONALLY LEFT BLANK 1

3 (viii) Board of directors The particulars of the Directors of SDEB and their respective shareholdings in the Company as at 18 May 2005 are as follows: Name Of Directors Tan Sri Hamdan Bin Mohamad Amran Bin Awaluddin Ahmad Zahdi Bin Jamil Dato Dr. Shahir Bin Nasir < Direct > <----- Indirect > No. Of No. Of Nationality Shares % Shares % Malaysian ,000* Malaysian Malaysian Malaysian * Deemed interested by virtue of Tan Sri Hamdan Bin Mohamad s shareholdings in Rancak Bistari Sdn Bhd ( RBSB ) pursuant to Section 6A of the Companies Act, 1965 ( Act ). (ix) Structure of shareholdings and names of shareholders or, in the case of a public company, names of all substantial shareholders The particulars of the substantial shareholders of SDEB and their respective shareholdings in the Company as at 18 May 2005 are as follows: Shareholders Nationality/ Country of Incorporation <----- Direct -----> <----- Indirect ----> No. Of No. Of Shares Shares Held % Held % YPJ Holdings Malaysia 300, Sdn Bhd ( YPJH ) RBSB Malaysia 700, Tan Sri Hamdan Bin Mohamad Yayasan Pelajaran Johor Notes: Malaysian ,000 (1) Malaysia ,000 (2) (1) Deemed interested by virtue of Tan Sri Hamdan Bin Mohamad s shareholding in RBSB pursuant to Section 6A of the Act; and (2) Deemed interested by virtue of its shareholding in YPJH pursuant to Section 6A of the Act. 2

4 (x) Authorised and paid-up capital As at 18 May 2005, the authorised and paid-up share capital of SDEB are as follows: No. Of Ordinary Shares Par Value RM Amount RM Authorised 1,000,000, ,000,000,000 Issued and Paid-up 1,000, ,000,000 (b) Originator (in the case of asset-backed securities) (i) (ii) (iii) (iv) (v) Name Address Business registration no. Date/place of incorporation Date of listing (in case of a public listed company) (vi) Status : Resident/non-resident controlled company : Bumiputera/non-Bumiputera controlled company (vii) (viii) (ix) (x) Principal activities Board of directors Structure of shareholdings and names of shareholders or, in the case of a public company, names of all substantial shareholders Authorised and paid-up capital THE REST OF THIS PAGE IS INTENTIONALLY LEFT BLANK 3

5 2. PRINCIPAL TERMS AND CONDITIONS Senai Desaru Expressway Berhad (a) Name of parties involved in the proposed transactions (where applicable) (i) (ii) (iii) (iv) (v) (vi) (vii) (viii) (ix) Principal adviser(s)/ lead arranger(s) Aseambankers Malaysia Berhad Arranger(s) Valuers as no valuers are required to be appointed for the proposed issuance of Irredeemable Convertible Unsecured Loan Stocks ( ICULS ) Solicitors Abu Talib Shahrom Financial adviser Jointly between Aseambankers Malaysia Berhad and Macquarie (Malaysia) Sdn Bhd Technical adviser as a technical adviser is not required to be appointed for the proposed issuance of ICULS Guarantor as the ICULS are an unsecured financial instrument Trustee Malaysian Trustees Berhad Facility agent Aseambankers Malaysia Berhad THE REST OF THIS PAGE IS INTENTIONALLY LEFT BLANK 4

6 (x) (xi) (xii) (xiii) (xiv) (xv) Primary subscriber(s) and amount subscribed (where applicable) Underwriter(s) and amount underwritten Central depository Bank Negara Malaysia Paying agent Bank Negara Malaysia Reporting accountant Others (please specify) The placees of the Principal ICULS (as defined in Section 2(b) of this principal terms and conditions of the ICULS) and amount to be placed are as follows: Nominal value Placees of Principal ICULS to be issued RM million Nominal value of Principal ICULS held % Ranhill Berhad ( RB ) IDB Infrastructure Fund Limited Partnership ( IDBIF ) Other investors to be identified (if necessary) Total (b) (c) (d) Facility description Issuance of up to RM965,000,000 nominal value of ICULS of nominal value RM1.00 each, comprising up to RM435,000,000 nominal value of ICULS to be placed to the Placees ( Principal ICULS ) and up to RM530,000,000 nominal value of ICULS ( Coupon ICULS ) to be issued in lieu of cash coupon payment, if applicable. The Principal ICULS and Coupon ICULS are collectively referred to as the SDEB ICULS. Issue size (RM) Principal ICULS up to RM435,000,000 nominal value of ICULS Coupon ICULS up to RM530,000,000 nominal value of ICULS Issue price (RM) 100% nominal value of the ICULS 5

7 (e) (f) (g) (h) Tenor of the facility/issue The tenor of the SDEB ICULS will be up to thirty three (33) years from the First Issue Date, depending on the various issuance dates, where the Principal ICULS will be issued progressively in twelve (12) multiple tranches on a quarterly basis over a period of thirty nine (39) months from the First Issue Date or other period(s) subject to the approval from the ICULS Holders and the debt to equity ratio of 70:30 is met at all times, and the Coupon ICULS will only be issued as and when necessary in lieu of cash. Where the additional Principal ICULS of up to RM30 million nominal value as stipulated in item 2(a)(xv) above are issued, the amount of Principal ICULS issued in any one or all or some of the aforementioned tranches would increase correspondingly. The actual tenor for each tranche of the Principal ICULS and each issuance of the Coupon ICULS (if any) will be the remaining period between the respective issuance dates thereof and the date which is thirty three (33) years from the First Issue Date. The SDEB ICULS shall mature on the Maturity Date (as defined in Section 2 (x) of this principal terms and conditions of the ICULS) Interest/coupon (%) (please specify) 12% per annum Interest/coupon payment frequency Payable annually in arrears Interest/coupon payment basis The coupons shall start accruing from a date which is the later of either the third (3 rd ) anniversary of the First Issue Date (defined as the date when the first (1 st ) tranche of the Principal ICULS is issued of which this date is to be determined and shall be within six (6) months from the date of approval by the SC) or the date collection of toll commences on the proposed estimated 77 kilometre Senai-Pasir Gudang-Desaru Expressway which is to be designed, constructed, managed, operated and maintained by SDEB, that will link Senai with Pasir Gudang and Desaru in Johor ( Expressway or Project ) or a section of it ( Coupon Start Date ). All coupons accrued are to be paid on 31 st December of each calendar year or on the Conversion Date ( Coupon Payment Date ). The last Coupon Payment Date shall be on the Maturity Date ( Last Coupon Payment Date ). If: (a) (b) (c) the period commencing from the Coupon Start Date and the Coupon Payment Date is less than a year; or the period commencing from the Coupon Payment Date immediately prior to the Maturity Date and the Last Coupon Date is less than a year; or in the case of a Conversion, the period commencing from the Coupon Payment Date preceding the date of Conversion until the date of that Conversion is less than a year; 6

8 then coupon accrued for the period aforesaid shall be pro-rated accordingly, and shall be calculated based on the actual number of days in that particular year (actual over actual). Conditions for payment of coupon: 1. All coupons payable, whenever possible, shall be paid in cash to the registered holder(s) of the Principal ICULS and Coupon ICULS (if any) ( ICULS Holder(s) ) on the Coupon Payment Date or the Last Coupon Payment Date (as the case may be). 2. All cash payments of coupons are subject to satisfying all covenants stipulated under the Proposed BaIDS (defined as the proposed issue of, offer for subscription or purchase of, or invitation to subscribe for or purchase of primary Bai Bithaman Ajil Islamic Debt Securities ( BaIDS ) of up to RM1.46 billion to part finance the costs and expenses arising from the implementation of the Concession) and provided the credit rating of the BaIDS is not impaired. 3. As long as the SDEB ICULS are outstanding and convertible, SDEB shall ensure that the amount of cumulative gross dividends declared per SDEB Share shall not exceed the cumulative amount of cash coupon paid per ICULS. 4. In the event, for whatever reason, SDEB is unable to pay fully or partially, the ICULS coupon in cash on the Coupon Payment Date or in the case of a conversion, the period between the Coupon Payment Date prior to the Conversion Date, or the Last Coupon Payment Date (as the case may be), all of the ICULS coupons due and payable but not paid in cash shall be capitalised into new ICULS of nominal value at RM1.00 each for every RM1.00 of ICULS coupon not paid in cash. 5. The Coupon ICULS shall then be issued to the ICULS Holders to satisfy cash payment of the ICULS coupon. (i) Yield to maturity (%) (j) Security/collateral (if any) None THE REST OF THIS PAGE IS INTENTIONALLY LEFT BLANK 7

9 (k) Details on utilisation of proceeds Proceeds from the proposed issuance of Principal ICULS shall be utilised to part finance the Project, estimated as follows: Up to RM 000 Payment under the D & B Contract (1) 329,143 Other ancillary costs including fees 15,163 Initial balance of Finance Service Reserve Account (2) 7,946 Financing cost incurred during construction, including three 63,574 profit payments after Date Certain (3) Contingencies 19,174 Total 435,000 The balance, if any, arising from any unutilised amount from the items set out in the table above shall be utilised towards financing the operating costs of the Project. All proceeds from the proposed issuance of Principal ICULS will be deposited together with the proceeds to be raised from the Proposed BaIDS in the Disbursement Account (4). No proceeds will be raised from the proposed issuance of Coupon ICULS, as the Coupon ICULS will be issued to the ICULS Holders in lieu of the coupon cash payment. Notes: (1) D & B Contract is defined as Design and Build Contract amounting to RM1,058,246,997 entered into between Ranhill Engineers and Constructors Sdn Bhd ( W), a wholly-owned subsidiary of RB ( REC ) and SDEB via a letter of award signed by both parties on 16 June 2005, stipulating that the design and construction works shall be undertaken by REC on a fixed cost turnkey basis; (2) Finance Service Reserve Account is defined as a Syariah compliant bank account that will be opened by SDEB. Sums from the Revenue Account (as defined below) will be credited to the Finance Service Reserve Account until the balance is equivalent to the Finance Service Reserve Requirement (as defined below); Revenue Account - a Syariah compliant bank account for the purpose of remitting and/or depositing (i) any transfer from the Disbursement Account (as defined below) at Date Certain (as defined below) and any balance from the Disbursement Account upon its closure; (ii) amounts received pursuant to the issue of any ordinary shares, ICULS and all other forms of equity contribution on or after Date Certain; and (iii) generally, any and all Project revenues received by SDEB; Finance Service Reserve Requirement - as any date an amount sufficient to pay all Finance Service (as defined below) during the succeeding six (6) months period; 8

10 Finance Service - means for the relevant period, the aggregate of (i) the secondary BBA Notes (as defined below) maturing during such period; and (ii) the primary BBA Notes maturing during such period; BBA Notes - the Syahadah Al-Dayn which means certificates of debt and may be traded in the secondary market under the Syariah principle of Bai al Dayn; (3) Date Certain is referred to as 30 June 2008, being the date of completion for the whole Design and Construction Works which is thirty-six (36) months from 1 July 2005 as stipulated in the letter of award of the D&B Contract; and (4) Disbursement Account is defined as a Syariah compliant bank account to be opened by SDEB pursuant to the Proposed BaIDS with a bank to be agreed by the trustee for the Proposed BaIDS, for the purpose of remitting and/or depositing (i) issue proceeds under the Proposed BaIDS; and (ii) amounts received pursuant to the issue of any SDEB Shares, ICULS and any other form of equity contribution prior to Date Certain (l) (m) (n) (o) (p) Sinking fund (if any) There is no sinking fund Rating Credit rating assigned (Please specify if this is an indicative rating) Name of rating agency The SDEB ICULS is not rated Form and denomination The SDEB ICULS shall be constituted by a trust deed and shall be issued in registered form and in multiples of RM1.00 each. The Principal ICULS and the Coupon ICULS (if any) shall be represented by global certificates and may be exchanged for definitive certificates Mode of issue The Principal ICULS and the Coupon ICULS (as and when issued, if applicable) shall be issued via private placement and on a non-tender basis. The Principal ICULS and the Coupon ICULS (if any) will be reported on the Fully Automated System for Issuing/Tendering and transacted under the Real Time Electronic Transfer of Funds & Securities Selling restriction The Principal ICULS and the Coupon ICULS (if any) may not be offered or sold directly or indirectly, nor may any document or other material in connection therewith be distributed in or outside Malaysia, other than the persons specified in Schedule 2 and Schedule 3 of the Securities Commission Act, 1993 (as amended) and as contemplated by: 9

11 (i) (ii) Exchange of ICULS for new ordinary shares of RB If any of the Conversion Events does not occur by the fifth (5 th ) anniversary of the First Issue Date, IDBIF shall at any time thereafter until the date falling immediately before the Maturity Date have the right to sell to RB any, all or part of the outstanding Principal ICULS and Coupon ICULS (if any) held by it in exchange for new ordinary shares of RB, subject to the approval of RB s directors, shareholders and other regulatory requirements and compliance with equity requirements imposed by the relevant authorities. The number of new ordinary shares of RB to be issued in exchange for each ICULS shall be determined by way of an independent valuation; Sale of ICULS to unrelated corporations If any of the Conversion Events does not occur by the fifth (5 th ) anniversary of the First Issue Date, the ICULS Holder shall at any time thereafter until the date falling immediately before the Maturity Date have the right to sell any, all or part of the outstanding Principal ICULS and Coupon ICULS (if any) held to any third parties which are unrelated corporations, provided that prior to such sale: (a) (b) in the case of IDBIF, it shall grant a right of first offer to RB; in the case of RB or its related corporation (as the case may be), RB shall grant or procure its related corporation to grant to IDBIF: a right to tag-along on the same terms and pricing and sell its ICULS together with RB or its related corporation to third parties which are unrelated corporations based on a pro-rated basis of the outstanding ICULS then held; and a right of first refusal to purchase any, all or part of the ICULS proposed to be disposed of by RB or its related corporation. and the sale by RB or its related corporation is subject to the prior approval of IDBIF (provided IDBIF is at the time still an ICULS Holder and which approval shall not be unreasonably withheld); and (iii) Transfer to related corporations Any of the ICULS Holders may at any time transfer any, all or some of the SDEB ICULS or SDEB Shares held by them to a related corporation (as defined in Section 6 of the Act) by notifying SDEB, the other ICULS Holders and ordinary shareholders. Provided always that where such transfer occurs before the said ICULS Holder has fully subscribed for its ICULS commitment, the said ICULS Holder shall provide SDEB with written evidence that the related corporation is able to meet such commitment as and when due. 10

12 (q) Listing status The SDEB ICULS will not be listed on any stock exchange (r) Minimum level of subscription (RM or %) The minimum level of subscription is RM405,000,000 nominal value of ICULS or 93.1% of the maximum nominal value of the Principal ICULS. The minimum level of subscription for the Coupon ICULS is 0% as the Coupon ICULS will be issued to the ICULS Holders as coupon payments in lieu of cash as, when and if necessary. (s) (t) Other regulatory approvals required in relation to the issue, offer or invitation and whether or not obtained (please specify) There are no other regulatory approvals required in relation to the issuance of the SDEB ICULS. Conditions precedent The obligations of the Placees to subscribe for the Principal ICULS and the Coupon ICULS (if applicable) and SDEB to issue the Principal ICULS and the Coupon ICULS (if applicable) are subject to the following conditions precedent being fulfilled: (i) regulatory matters: (a) (b) receipt of the approval from the SC for the issuance of the SDEB ICULS; notification by SDEB to the Economic Planning Unit of the issuance of the Principal ICULS and the Coupon ICULS (if any) and the consequent change in shareholding upon Conversion occurring; (ii) (iii) (iv) evidence of availability for the utilisation of the Proposed BaIDS for construction of the Expressway and financing facility for the Land Costs pursuant to Clause 7.4 of the Concession Agreement; the Concession Agreement shall become unconditional upon its terms and conditions; certified true extracts/copies of the following documents shall have been furnished to the Placees:- (a) (b) SDEB s shareholders resolution, in a general meeting to be convened, authorising the increase in the issued and paidshare capital to RM25 million, authorising the creation and issuance of the SDEB ICULS and the allotment and issue of the new SDEB Shares pursuant to the conversion of any of the Principal ICULS and Coupon ICULS (if any); SDEB s directors resolution, authorising the execution of all relevant agreements ( Issue Documents ) in accordance with SDEB s Articles of Association and the list of authorised signatories and specimen signatures; 11

13 (c) (d) SDEB s Certificate of Incorporation and Memorandum and Articles of Association; and the Concession Agreement. (v) confirmation by SDEB to the Placees that the D & B Contract for the Expressway has been signed; (vi) winding-up/bankruptcy searches conducted on SDEB, its shareholders and directors wherein the Director-General of Insolvency confirms that each such person is not subject to winding-up and bankruptcy proceedings respectively; (vii) (viii) (ix) delivery to the Placees of the Issue Documents which have been duly executed by all parties thereto and endorsed as exempted under the Stamp Duty Exemption (No. 23) Order 2000 and/or duly stamped; each Placee obtaining the requisite approvals from its directors, investment committee and/or shareholders to enter into the Issue Documents upon its terms and conditions; and joint written advice by the solicitors of SDEB and the Placees on the compliance with the conditions precedent set out above. (u) Representations and warranties The representations and warranties of SDEB are as follows: (i) (ii) corporate organisation, existence, power and authorisation of SDEB including SDEB s legal and beneficial ownership to all its assets; the execution, delivery and performance of the Issue Documents does not contravene or constitute a default under, or caused to be exceeded any limitation on SDEB or the powers of their directors imposed by or contained in: (a) (b) (c) any law by which any of them or any of their assets are bound or affected; SDEB s Memorandum and Articles of Association; and the Concession Agreement or existing agreements by which SDEB is bound or affected; (iii) (iv) no Government of Malaysia ( Government ) or regulatory approvals, or other third party consents, are required other than those already obtained; legality, validity, binding effect and enforceability of the Issue Documents; 12

14 (v) (vi) (vii) (viii) (ix) (x) (xi) absence of any actual or threatened litigation which would have a material adverse effect; financial statements prepared in accordance with accounting principles and practices generally accepted in Malaysia; no material adverse change in financial position; no violation of law or material agreements which have a material adverse effect and no default in relation thereto; no litigation or arbitration is current or, to SDEB s knowledge, is threatened, which if adversely determined would have a material adverse effect on the ability of SDEB to perform its obligations under the Issue Documents; no default in payment of any taxes and no claim is being asserted with respect to any taxes which is not disclosed in the financial statements; and full disclosure in writing of all material facts. (v) Events of default Events of Default shall include but are not limited to the following: (i) (ii) (iii) (iv) (v) (vi) (vii) a failure, refusal and/or neglect to issue the Coupon ICULS; breach of any covenant, term, stipulation or undertaking in the Issue Documents which is not remedied within the stipulated duration; misrepresentation or inaccuracy in warranty under the Issue Documents which remains so for the stipulated duration; cross-default under any loan, debt, guarantee or other indebtedness obligation, provided that it is not an event of default if the liability is disputed by SDEB in good faith by way of appropriate legal proceedings; SDEB fails to perform any of its obligations to allot new SDEB Shares pursuant to the conversion of the Principal ICULS and Coupon ICULS (if any) (which has been approved by the Government and other relevant authority) and such failure is not remedied within 30 days; any insolvency, administration or winding up action being taken against SDEB; SDEB fails to perform any of its obligations under the Issue Documents or under any undertaking or arrangement entered into in connection therewith and where such failure would materially prejudice the interests of the ICULS Holders; 13

15 (viii) (ix) (x) (xi) (xii) (xiii) any Government approval required for the Concession is revoked, terminated, withdrawn or ceases to be in full force and effect, if such revocation, termination, withdrawal or cessation has a material adverse effect; the Concession Agreement is amended or modified in any material adverse effect and where such amendment or modification materially prejudices the interests of the ICULS Holders (other than as a result of the effect of, or compliance with, any law or Government order or directive and/or any variation); breach or default by SDEB under the Concession Agreement, D&B Contract or Share/Stock Holders Agreement which is not remedied within the stipulated duration; termination of the Concession Agreement; occurrence of an event of abandonment, total loss, complete destruction or any other event similar nature with respect to the Concession; and other events of default typical and customary for financing arrangements similar to the SDEB ICULS, to be agreed by all parties. Either Placee may instruct the Trustee to declare an Event of Default. But the Trustee shall not declare an Event of Default before the trustee for the BaIDS holders does so under SDEB s Proposed BaIDS documents. As a consequence of an Event of Default being declared by the Trustee, each Holder shall be entitled at its discretion to an immediate payment of an amount to be computed based on either of the following: (i) (ii) all accrued coupon on all outstanding SDEB ICULS shall immediately become payable and the payment thereof shall be satisfied by SDEB by the issuance of Coupon ICULS on the basis of RM1.00 nominal value Coupon ICULS for every RM1.00 of accrued coupon and all outstanding SDEB ICULS together with the Coupon ICULS issued pursuant to this paragraph shall be treated as if Conversion applicable to such Principal ICULS and Coupon ICULS (if any) had been exercisable at the Conversion Price whereupon the amount equivalent to the par value of the new notional SDEB Shares which are deemed to be issued pursuant to the Conversion shall be immediately due and payable; or the Holders shall be entitled to immediate payment of the amount payable on the SDEB ICULS to be calculated based on the formula set out in paragraph 3 of the Conversion Events below; and in the event SDEB fails to pay the amounts set out above, the Holders may instruct the Trustee to commence legal action to recover the amount due, including instituting winding-up proceedings against SDEB. 14

16 (w) Principal terms and conditions for warrants (where applicable) as there are no warrants attached to the issuance of SDEB ICULS. THE REST OF THIS PAGE HAS BEEN INTENTIONALLY LEFT BLANK 15

17 (x) Other principal terms and conditions for the issue Issue : Principal ICULS The Principal ICULS shall be issued progressively in twelve (12) multiple tranches in accordance with the schedule below, on a quarterly basis over thirty seven (37) months from the First Issue Date. SDEB shall provide the Placees with at least 30 days prior written notice of any changes to the schedule, subject to a maximum implementation period of thirty seven (37) months from the First Issue Date. Tranche Estimated Issue Date % of Total Principal ICULS Subscription 1 T* T+2 months T+5 months T+8 months T+11 months T+14 months T+17 months T+20 months T+23 months T+26 months T+36 months T+39 months 6.6 Total * T being the First Issue Date Where additional Principal ICULS of up to RM30 million nominal value as stipulated in item 2(a)(xv) above are issued, the amount of Principal ICULS issued in any one or all or some of the abovementioned tranches would increase correspondingly. # Or other period(s) subject to the approval from the ICULS Holders and the debt to equity ratio of 70:30 is met at all times 16

18 Coupon ICULS In the event, for whatever reason after the Coupon Start Date, SDEB is unable to pay fully or partially, any of the SDEB ICULS coupon in cash at the Coupon Payment Date or the Last Coupon Payment Date, as the case may be, any and all of the coupons due and payable but not paid in cash shall instead be paid via the new issue of Coupon ICULS on the basis of RM1.00 nominal value (to be issued at 100% of its nominal value) for every RM1.00 of coupon not paid in cash. For the avoidance of doubt, the Coupon ICULS shall be in the same class as the Principal ICULS. Conversion : The Holder shall convert the Principal ICULS and Coupon ICULS (if any) at the Conversion Price into new SDEB Shares upon the occurrence of any of the Conversion Events and upon the exercise of the Conversion Right under paragraph 1 of the Non- Occurrence of Conversion Events below. Provided always that any conversion of the Principal ICULS and Coupon ICULS (if any) into new SDEB Shares is subject to all approvals from the Government as required under the Concession Agreement and/or all other relevant authorities. Conversion Date(s) Conversion Price : The date(s) on which the Principal ICULS and the Coupon ICULS (if any) are converted into new SDEB Shares. : The Conversion Price shall be based on the following formula: CP = (1 + C) (1 + C) - (A-B) Where: CP = Conversion Price per new SDEB Share A = Cumulative cash and/or Coupon ICULS paid, payable and/or accrued per SDEB ICULS up to Conversion Date (exclusive) B = Cumulative gross dividends declared per SDEB Share up to Conversion Date (exclusive) 17

19 C = Cumulative Coupon ICULS paid, payable and/or accrued per ICULS up to Conversion Date (exclusive) Any fractional entitlement to new SDEB Shares shall be rounded upwards or downwards to the nearest number of one (1) new SDEB Share. The Conversion Price shall be satisfied by surrendering the Principal ICULS and the Coupon ICULS (if any) with an aggregate nominal value equivalent to the Conversion Price. Conversion Events : Any one or a combination of the following events shall constitute a Conversion Event: 1. Initial Public Offering ( IPO ) of SDEB In the event SDEB or its holding company undertakes an IPO, all outstanding Principal ICULS and Coupon ICULS (if any) shall be converted into new SDEB Shares prior to the IPO and at the Conversion Price. 2. Reverse take over ( RTO ) of a listed company or back door listing ( BDL ) Subject to the approval of the Holders, SDEB may undertake an RTO or BDL. SDEB shall ensure that all SDEB ICULS shall be converted into new SDEB Shares and then exchanged for new shares of the listed company at a price to be determined by way of an independent valuation. 3. Mandatory Conversion On the Maturity Date, all remaining Principal ICULS and Coupon ICULS (if any) shall be converted into new SDEB Shares at the Conversion Price. In the event that the approval of the Government and/or any other relevant authority for the conversion of any of the Principal ICULS and Coupon ICULS (if any) into new SDEB Shares cannot be obtained by the Maturity Date, all outstanding Principal ICULS and Coupon ICULS, if any, shall be treated as if the applicable conversion had been exercisable on the Maturity Date at the 18

20 Conversion Price and the issued and paid up capital for the purpose of this paragraph has been enlarged by such par value of those new SDEB Shares ( Enlarged Paid Up Capital ), whereupon the ICULS Holders shall be entitled to an immediate payment of the amount to be calculated based on the following: PA = NTA EPC Where: PA = Amount payable per SDEB ICULS to each ICULS Holder NTA = Net tangible assets of SDEB based on the latest audited financial statements adjusted up to the Maturity Date EPC = Enlarged Paid Up Capital Notes: If SDEB fails to pay the amount payable to the Holder, the Trustee has the option to commence legal action to recover the debt, including windingup SDEB. (a) (b) (c) (d) any conversion of the Principal ICULS and Coupon ICULS (if any) into new SDEB Shares is subject to all restrictions imposed by the relevant authorities; foreign shareholders of SDEB shall as part of the IPO exercise, undertake an offer for sale of the SDEB Shares held by them on a pro-rated basis; the ordinary shareholders of SDEB (comprising the existing ordinary shareholders and including the holders of SDEB ICULS which have been converted into new SDEB Shares) shall undertake, pursuant to an IPO, to sell down part of the new SDEB Shares held by them; and in the event a mandatory general offer is required as a result of any such conversion, each ICULS Holder and SDEB Shares holder shall provide an undertaking not to accept any such general offer. 19

21 Non- Occurrence of Conversion Events : If any of the Conversion Events does not occur by the 3 rd or 5 th anniversary of the First Issue Date, as the case may be as set out below, the ICULS Holders will have, at any time after such date, the right to do any one or a combination of the following: 1. Exercise Conversion Right If any of the Conversion Events does not occur by the third (3 rd ) anniversary of the First Issue Date, each ICULS Holder shall be entitled to convert its SDEB ICULS or any part thereof at the Conversion Price into new SDEB Shares. The exercise of such Conversion Right is subject to the prior approval of all other existing ICULS Holders collectively and which approval shall not be unreasonably withheld. 2. Exchange SDEB ICULS for new ordinary shares in RB If any of the Conversion Events does not occur by the fifth (5 th ) anniversary of the First Issue Date, IDBIF shall at any time thereafter until the date falling immediately before the Maturity Date have the right to sell to RB any, all or part of the outstanding SDEB ICULS held by it in exchange for new ordinary shares in RB, subject to the approval of RB s directors, shareholders and other regulatory requirements and compliance with equity requirements imposed by the relevant authorities. The number of new ordinary shares in RB to be issued in exchange for each SDEB ICULS shall be determined by way of an independent valuation. 3. Sale of SDEB ICULS to unrelated corporations If any of the Conversion Events does not occur by the fifth (5 th ) anniversary of the First Issue Date, the ICULS Holder shall at any time thereafter until the date falling immediately before the Maturity Date have the right to sell any, all or part of the outstanding SDEB ICULS held to any third parties which are unrelated corporations, provided that prior to such sale: (a) in the case of IDBIF, it shall grant a right of 20

22 first offer to RB; Note: (b) in the case of RB or its related corporation (as the case may be), RB shall grant or procure its related corporation to grant to IDBIF: a right to tag-along on the same terms and pricing and sell its SDEB ICULS together with RB or its related corporation to third parties which are unrelated corporations based on a prorated basis of the outstanding SDEB ICULS then held; and a right of first refusal to purchase any, all or part of the SDEB ICULS proposed to be disposed of by RB or its related corporation. and the sale by RB or its related corporation is subject to the prior approval of IDBIF (provided IDBIF is at the time still an ICULS Holder and which approval shall not be unreasonably withheld). For the avoidance of doubt: any sale of SDEB ICULS or new or existing SDEB Shares is subject to equity requirements and restrictions imposed by the relevant authorities; and any person or entity who becomes a shareholder or stockholder in SDEB is required to sign SDEB s Share/Stock Holders Agreement. The Principal ICULS and the Coupon ICULS (if any) will be transferable in multiples of board lots of RM1.00 nominal value. Coupon Payable & Coupon Rate : The Principal ICULS and the Coupon ICULS (if any) shall bear a coupon payable annually in arrears. The coupon rate payable is 12% per annum. The coupons shall start accruing from a date which is the later of either the third (3 rd ) anniversary of the First Issue Date or the date collection of toll commences on the Expressway or a section of it ( Coupon Start Date ). 21

23 All coupons accrued are to be paid on 31 st December of each calendar year or on the Conversion Date ( Coupon Payment Date ). The last Coupon Payment Date shall be on the Maturity Date ( Last Coupon Payment Date ). If: (a) (b) (c) the period commencing from the Coupon Start Date and the Coupon Payment Date is less than a year; or the period commencing from the Coupon Payment Date immediately prior to the Maturity Date and the Last Coupon Date is less than a year; or in the case of a Conversion, the period commencing from the Coupon Payment Date preceding the date of Conversion until the date of that Conversion is less than a year; then coupon accrued for the period aforesaid shall be pro-rated accordingly, and shall be calculated based on the actual number of days in that particular year (actual over actual). Conditions for payment of coupon: 1. All coupons payable, whenever possible, shall be paid in cash to the ICULS Holders on the Coupon Payment Date or the Last Coupon Payment Date (as the case may be). 2. All cash payments of coupons are subject to satisfying all covenants stipulated under the Proposed BaIDS and provided the credit rating of the BaIDS is not impaired. 3. As long as the SDEB ICULS are outstanding and convertible, SDEB shall ensure that the amount of cumulative gross dividends declared per SDEB Share shall not exceed the cumulative amount of cash coupon paid per SDEB ICULS. 4. In the event, for whatever reason, SDEB is unable to pay fully or partially, the SDEB ICULS coupon in cash on the Coupon Payment Date or the Last Coupon Payment Date (as the case may be), all of the coupons due and payable but not paid in cash shall be capitalised into new SDEB ICULS at RM1.00 each for every RM1.00 of coupon not paid in cash. 22

24 5. The Coupon ICULS shall then be issued to the ICULS Holders to satisfy cash payment of the SDEB ICULS coupon. Maturity Date : On the thirty-third (33 rd ) anniversary of the First Issue Date. Redeemability : Not redeemable for cash, save for the declaration of an Event of Default and in the event that the approval of the Government and/or any other relevant authority for the conversion of any of the Principal ICULS and Coupon ICULS (if any) into new SDEB Shares upon maturity is not obtained by the Maturity Date. Listing : The SDEB ICULS will not be listed on any stock exchange. Ranking Of The SDEB ICULS : The SDEB ICULS shall constitute unsecured obligations of SDEB, which are subordinated to the BaIDS and to any other secured and unsecured obligations of SDEB (present and future), and shall as between the SDEB ICULS themselves rank pari passu in all aspects and without discrimination or preference. The SDEB ICULS shall rank ahead of all SDEB Shares, but shall rank pari passu with the SDEB Shares in the event of winding-up. Ranking Of New SDEB Shares arising from Conversion : The new SDEB Shares to be issued pursuant to the conversion of the Principal ICULS and Coupon ICULS (if any) will rank pari passu with the existing SDEB Shares in issue. Security : None THE REST OF THIS PAGE HAS BEEN INTENTIONALLY LEFT BLANK 23