HONG LEONG ASIA LTD. (Incorporated in the Republic of Singapore) (Company Registration No G)

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Ethelbert Perkins
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1 HONG LEONG ASIA LTD. (Incorporated in the Republic of Singapore) (Company Registration No G) PROPOSED SALE BY HONG LEONG ASIA LTD. OF THE BUILDING MATERIALS BUSINESS OF THE GROUP TO TASEK CORPORATION BERHAD ( TASEK OR THE PURCHASER ), A COMPANY LISTED ON BURSA MALAYSIA SECURITIES BERHAD, IN EXCHANGE FOR CASH AND SHARES IN TASEK (THE PROPOSED TRANSACTION ) 1. INTRODUCTION The Board of Directors of Hong Leong Asia Ltd. (the "Company" or HLA and together with its subsidiaries, the Group ) refers to the Company s announcement dated 28 April 2008 (the First Announcement ) on the conditional share sale and purchase agreement (the "Share Sale and Purchase Agreement") entered into between the Company and Tasek in relation to the Proposed, and the subsequent announcement dated 30 June 2008 (the "Second Announcement") of a supplementary agreement to the Share Sale and Purchase Agreement (the First Supplementary SPA ) to amend the Share Sale and Purchase Agreement. Unless otherwise defined in this Announcement, capitalized terms used in this Announcement shall bear the same meanings as defined in the First Announcement or the Second Announcement (as the case may be). The Board wishes to announce that the Company has today entered into a second supplementary agreement to the Share Sale and Purchase Agreement (the Second Supplementary SPA ) with Tasek to amend the Share Sale and Purchase Agreement. Save as amended by the First Supplementary SPA and the Second Supplementary SPA, all other terms and conditions of the Share Sale and Purchase Agreement are to continue in full force and effect. 2. SALIENT AMENDMENTS TO THE SHARE SALE AND PURCHASE AGREEMENT 2.1 HL Karimun Granite Pte Ltd ( HL Karimun ) The Company and Tasek have agreed that the shares in HL Karimun shall be excluded from the Proposed. Accordingly, references in this Announcement to Sale Companies and Sale Shares shall be construed to exclude HL Karimun and the shares in HL Karimun, respectively. 2.2 Sale Consideration Given the foregoing, the Company and Tasek have agreed that the aggregate consideration for the sale of the Sale Shares shall be S$288.1 million, which shall be satisfied by:- (a) (b) the issue and allotment to the Company or its nominee of approximately million fully-paid new ordinary shares of RM1.00 each in the capital of the Purchaser (the Consideration Shares ) at the issue price of RM3.54 (which is equivalent to approximately S$1.52 based on the exchange rate of S$1:RM as at 23 April 2008) for each Consideration Share (the Issue Price ). The Consideration Shares will not be entitled to the Proposed Special Dividend; and the payment of RM30 million in cash to the Company.

2 The Consideration Shares represent approximately 49.46% of the enlarged issued share capital of the Purchaser. Following the completion of the Proposed, the Group will have a shareholding interest of approximately 65.59% of the enlarged issued share capital of Tasek and Tasek will become a subsidiary of the Group. Based on the proforma consolidated accounts of the proforma group comprising the Sale Companies as at 31 December 2007, the Group will realize a net gain of approximately S$62.71 million upon the completion of the sale and purchase of the Sale Shares. This net gain represents the difference between the value ascribed to the Sale Companies under the Proposed, and the value at which they are currently held in the books of the Group, taking into account the effective change in the shareholding in the Sale Companies before and after the Proposed but without taking into account any fair value adjustment. 3. FINANCIAL EFFECTS For illustrative purposes only, certain estimated financial effects of the Proposed on the share capital of the Company, the net asset value (excluding minority interests) ("NAV") per ordinary share in the capital of the Company (the Share ), earnings per Share ("EPS") and gearing of the Group, based on the audited consolidated financial statements of the Group for the financial year ended 31 December 2007, including the results of the Purchaser consolidated into the Group for the 12 months ended 31 December 2007, and the Purchaser group s consolidated balance sheet as at 31 December 2007, are set out below:- (a) Share Capital The Proposed will have no impact on the number of issued Shares of the Company. (b) NAV Assuming that the Proposed had been completed on 31 December 2007, the effect of the Proposed on the consolidated NAV of the Group would be as follows:- Consolidated NAV No. of issued and paid-up Shares as at 31 December 2007 ( 000) NAV per Share as at 31 December 2007 (S$) 593, , , ,

3 (c) EPS Assuming that the Proposed had been completed on 1 January 2007, the effect of the Proposed on the EPS of the Group would be as follows:- Profit after income tax and minority interests Weighted average number of issued and paid-up Shares ( 000) (diluted) 95, , , ,672 EPS (diluted) (cents) (d) Gearing The effect of the Proposed on the gearing of the Group would be as follows:- Total borrowings (1) 529, ,975 Net assets (2) 1,331,163 1,521,133 Gearing (times) (3) Notes:- (1) Total borrowings comprise long-term borrowings and short-term borrowings. (2) Net assets equals total assets less total liabilities. (3) Gearing is defined as total external borrowings divided by net assets. 4. RELATIVE FIGURES ON THE BASES SET OUT IN RULE 1006 OF THE LISTING MANUAL The relative figures for the Proposed computed on the bases set out in Rule 1006 of the Listing Manual, based on the audited financial statements of the Group for the financial year ended 31 December 2007 and the proforma consolidated accounts of the Sale Companies as at 31 December 2007 are set out below. 3

4 Bases under Rule 1006 Rule 1006(a) As at 31 December 2007 NAV of the Sale Shares (1) 105,833 NAV of the Group (1) 593,303 Size of relative figure 18% Rule 1006(b) Net profits attributable to the Sale Shares (2) For financial year ended 31 December ,122 Net profits of the Group (2) 229,610 Size of relative figure 17% Rule 1006(c) Aggregate amount of consideration for the Proposed Market capitalisation (3) of the Company as at 21 August 2008 (being the last trading day immediately preceding the date of the Second Supplementary SPA) 288, ,535 Size of relative figure 62% Rule 1006(d) Number of equity securities to be issued by the Company as consideration for the acquisition compared with the number of equity securities previously in issue Not Applicable Notes:- (1) Net asset value refers to the total assets less total liabilities and minority interests. (2) Based on profits before income tax, minority interest and extraordinary items. (3) The market capitalisation of the Company is based on 381,392,018 Shares in issue as at 21 August 2008 (being the last trading day immediately preceding the date of the Second Supplementary SPA) and the weighted average price of the Shares transacted on the SGX-ST on 21 August 2008 of S$ CIRCULAR AND DOCUMENT AVAILABLE FOR INSPECTION As stated in the First Announcement and Second Announcement, unless a waiver is obtained from the SGX-ST in respect of the requirement for Shareholders approval, a circular to Shareholders containing further information on the Proposed and the other matters contemplated under the Share Sale and Purchase Agreement (as amended by the First Supplementary SPA and the Second Supplementary SPA) and enclosing the notice of the EGM will be despatched by the Company to Shareholders in due course. 4

5 A copy of the Second Supplementary SPA will be made available for inspection by Shareholders during normal business hours at the registered office of the Company for a period of 3 months from the date of this Announcement. By Order of the Board Yeo Swee Gim, Joanne Ng Siew Ping, Jaslin Company Secretaries 22 August 2008 Singapore 5

HONG LEONG ASIA LTD. (Company Registration No G) (Incorporated in the Republic of Singapore)

HONG LEONG ASIA LTD. (Company Registration No. 196300306G) (Incorporated in the Republic of Singapore) ANNOUNCEMENT INCORPORATION OF NEW WHOLLY-OWNED SUBSIDIARIES, AND ACQUISITION BY HONG LEONG ASIA LTD.