COMPANY ) PROPOSED SUBSCRIPTION OF REDEEMABLE CONVERTIBLE PREFERENCE SHARES IN PACC OFFSHORE SERVICES HOLDINGS PTE LTD ( POSH

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1 Page 1 of 1 20/11/2012 OTHERS MALAYSIAN BULK CARRIERS BERHAD ( MBC or THE COMPANY ) PROPOSED SUBSCRIPTION OF REDEEMABLE CONVERTIBLE PREFERENCE SHARES IN PACC OFFSHORE SERVICES HOLDINGS PTE LTD ( POSH ) MALAYSIAN BULK CARRIERS BERHAD Type Subject Description Announcement OTHERS MALAYSIAN BULK CARRIERS BERHAD ( MBC or THE COMPANY ) PROPOSED SUBSCRIPTION OF REDEEMABLE CONVERTIBLE PREFERENCE SHARES IN PACC OFFSHORE SERVICES HOLDINGS PTE LTD ( POSH ) Please refer to the attachment for further details. Attachments Announcement-Proposed Subscription of RCPS in POSH.pdf 37 KB Announcement Info Company Name MALAYSIAN BULK CARRIERS BERHAD Stock Name MAYBULK Date Announced 16 Nov 2012 Category General Announcement Reference No MB

2 MALAYSIAN BULK CARRIERS BERHAD ( MBC or the Company ) PROPOSED SUBSCRIPTION OF REDEEMABLE CONVERTIBLE PREFERENCE SHARES IN PACC OFFSHORE SERVICES HOLDINGS PTE LTD ( POSH ) 1. INTRODUCTION The Company wishes to announce that its wholly-owned subsidiary, Lightwell Shipping Inc. ( Lightwell ) had, via a letter dated 30 October 2012 issued by PACC Offshore Services Holdings Pte Ltd ( POSH ), been informed of POSH s intention to undertake a rights issue of redeemable convertible preference shares ( RCPS ) at an issue price of USD4.00 per RCPS. The number of RCPS being offered to all shareholders of POSH on a pro-rata basis. Lightwell was invited to subscribe for 7,961,286 RCPS, being its entitlement pursuant to its 21.23% shareholding in POSH. Pursuant to its agreement to subscribe for the RCPS, Lightwell was allotted 7,961,286 RCPS at an issue price of USD4.00 per RCPS for cash of USD31,845,144 on 15 November 2012 ( Proposed Subscription ). Lightwell s shareholding in POSH will remain at 21.23% upon completion of the Proposed Subscription. 2. INFORMATION ON POSH POSH was incorporated in Singapore under the Singapore Companies Act as a private limited company on 7 March The issued and paid up share capital of POSH before the rights issue of RCPS is USD380,975,000. POSH and its group of companies provide offshore marine services in the offshore oil and gas industry. The directors of POSH are Mr Teo Joo Kim, Mr Gerald Seow Kang Hoe, Mr Kuok Khoon Kuan, Mr Wu Long Peng and Dato Capt. Ahmad Qurnain bin Abdul Rashid. POSH is an associate company of MBC Group (held through Lightwell) and a subsidiary of Pacific Carriers Limited ( PCL ). 3. DETAILS ON THE PROPOSED SUBSCRIPTION 3.1 Basis of determining the Issue Price The issue price of USD4.00 per RCPS was arrived at, taking into account the size of RCPS issue, USD150 million and the share enlargement upon any tendered conversion to ordinary shares. The issue price of USD4.00 per RCPS is approximately 5% over the POSH s Net Assets Value of USD3.824 as at 30 June There are no liabilities to be assumed by Lightwell arising from the Proposed Subscription. 3.2 Salient terms of the RCPS The salient terms of the RCPS are shown in Table 1 below. 3.3 Source of funds The subscription price for the Proposed Subscription will be funded from internally generated funds. 4. RATIONALE FOR THE PROPOSED SUBSCRIPTION The Proposed Subscription is to part finance the POSH Group s investments in various projects and capital commitments, all of which are expected to contribute positively to POSH s future earnings. This will in turn contribute to MBC s overall performance in the future. 5. PROSPECTS POSH is constantly seeking to expand its business in the face of market changes and opportunities. The USD150 million raised through the issuance of redeemable convertible preference shares will assist POSH in meeting its capital expenditure and/or investment opportunities. 1

3 6. RISK FACTORS There is no risk arising from the Proposed Subscription other than the usual market and global economic risks. 7. THE EFFECTS OF THE PROPOSED SUBSCRIPTION The Proposed Subscription will not have any materials effect on earnings per share, net assets and gearing of MBC Group for the financial year ending 31 December The Proposed Subscription will not have any effect on the share capital and substantial shareholding in MBC Group. 8. APPROVAL REQUIRED The Proposed Subscription is not subject to the approval of shareholders of MBC. 9. DIRECTORS AND MAJOR SHAREHOLDERS INTEREST The directors of MBC, namely Mr Teo Joo Kim, Mr Kuok Khoon Kuan and Mr Wu Long Peng are deemed interested in the Proposed Subscription by virtue of their directorships in PCL and POSH ( Interested Directors ). Accordingly, the Interested Directors have abstained from board deliberation in respect of the Proposed Subscription. The Interested Directors are also shareholders of POSH and are themselves committed to subscribing for the RCPS. PCL is a major shareholder of MBC with direct interest of 34.46%. PCL is a wholly-owned subsidiary of Kuok (Singapore) Limited, and the latter is thus deemed interested in the Proposed Subscription. PCL has undertaken that it will subscribe to its full entitlement pursuant to the proposed rights issue of redeemable preference shares in POSH. Save as disclosed above, none of the other directors or major shareholders of MBC or persons connected with them has any interest, direct or indirect, in the Proposed Subscription. 10. STATEMENT BY BOARD OF DIRECTORS The Board of Directors of MBC (save for the Interested Directors), after having considered all aspects of the Proposed Subscription, is of the opinion that the Proposed Subscription is in the best of interest of MBC Group. 11. ESTIMATED TIMEFRAME FOR COMPLETION The Proposed Subscription is completed on 15 November DOCUMENTS FOR INSPECTION The Letter of Offer dated 30 October 2012 and Agreement to Subscribe for Redeemable Convertible Preference Shares are available for inspection at the registered office of MBC during normal office hours from Monday to Friday (except public holidays) at Level 17 & 18, PJ Tower, No.18, Jalan Persiaran Barat, Off Jalan Timur, Petaling Jaya, Selangor Darul Ehsan for a period of three (3) months from the date of this announcement. This announcement is dated 16 November

4 Table 1 Salient terms of the RCPS Issuer : PACC Offshore Services Holdings Pte Ltd Holder : Lightwell Shipping Inc. Subscription amount paid : USD31,845,144 No. of RCPS : 7,961,286 Issue price : USD4.00 per RCPS Tenure : Five (5) years Dividend rate : The RCPS shall be entitled to dividends at the same rate as that declared for ordinary shares. Maturity date : On the day falling five (5) years from the date of issue of RCPS. Redemption price : An amount per RCPS equal to the RCPS Issue Price of each RCPS to be redeemed. Redemption : The RCPS holders shall be entitled to the following redemption rights: (1) Each RCPS shall be automatically and mandatorily redeemed immediately upon the expiry of five years after the issue date of such RCPS. (2) Upon being notified that the Issuer will be listed on a stock exchange, each RCPS holder shall have the right to require the Issuer to redeem the whole or any part of the RCPS held by the RCPS holders by giving not less than one month written notice to the Issuer. (3) Any RCPS shares not tendered for redemption shall be converted into ordinary shares as part of the IPO process. Transferability : The RCPS is not transferable. Convertibility : The RCPS is convertible into ordinary shares at any time during the tenure of five years. Each RCPS holder shall be entitled to convert all or any of the RCPS into fully paid ordinary shares at the conversion rate of one ordinary share for every RCPS held. Listing : Not listed Voting Rights : The RCPS shall not be entitled to receive notice of, attend, or vote at general meetings of the Issuer except for general meetings held in the following circumstances: (1) during such period as the RCPS dividends or any part thereof remains in arrears and unpaid; (2) upon any resolution which amends or varies the rights attached to the RCPS; or (3) upon any resolution for the winding up of the Issuer. Every RCPS holder who is present in person at such meetings shall have, on a show of hands, one vote and on a poll, one vote for every RCPS of which he is a holder. 3

5 Table 1 Salient terms of the RCPS (cont d) Status : In the event of the commencement of any dissolution or winding up of the Issuer (other than pursuant to a Permitted Reorganisation), the RCPS shall rank: (1) junior to all other creditors (including the holders of subordinated debts); (2) pari passu with each other and with other preference shares issued subsequently to rank pari passu with the consent of the RCPS holders; (3) senior to the ordinary shares and any other securities or obligations of the Issuer that are subordinated to the RCPS. 4