KS ENERGY SERVICES LIMITED. RCB No.: G 19Jurong Port Road, Singapore Tel: (65) Fax: (65)

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1 NEWS RELEASE KS ENERGY PROPOSES TO INTEGRATE ITS DISTRIBUTION BUSINESS WITH AQUA-TERRA AND SSH IN PARTNERSHIP WITH ACTIS This proposal would actualize the long-term strategy of Mr. Kris Wiluan, Chairman and CEO of KS Energy, to build an integrated Oil & Gas and Marine distribution services business Proposal is to consolidate KS Flow Control, Aqua-Terra Supply Co (ATS) and SSH Corporation (SSH) under the umbrella of a newly incorporated entity: KS Distribution This business consolidation and partnership with Actis, a leading private equity investor in emerging markets, will streamline and strengthen the distribution businesses, increase their efficiency and broaden their geographic reach, building one of Asia s leading Oil & Gas and Marine distribution companies KS Energy is proposing to acquire all the shares of ATS and SSH through a combination of cash from Actis and new KS Energy shares Proposal offers to acquire shares of ATS at S$0.3738, a 29% premium to Monday s close, and the shares of SSH at S$0.2750, a 15% premium to Monday s close Proposal is subject to the approval of shareholders of KS Energy, ATS and SSH. When completed, KS Distribution will be 55% owned by KS Energy and % owned by Actis SINGAPORE, 8 December 2009 Main board listed KS Energy Services Limited ( KS Energy or the Group ) today announced a proposal to consolidate its Oil & Gas and Marine distribution services business together with the businesses of its subsidiary, Aqua- Terra Supply Co. Ltd ( ATS ) and its associated company, SSH Corporation Ltd ( SSH ) through separate schemes of arrangement. When completed, all the distribution businesses will be held under a newly incorporated company KS Distribution Pte Ltd ( KS Distribution ). The proposed business consolidation will be funded by KS Energy and Actis, a leading private equity investor in emerging markets. Actis will contribute cash of S$142m and KS Energy will contribute new KS Energy shares. Upon completion, KS Distribution will be 55% owned by KS Energy and % owned by Actis and its affiliates. The remaining 0.625% will be held by the future CEO of KS Distribution. Page 1 of 8

2 KS Energy believes the proposed consolidation will help streamline and strengthen its distribution businesses, increase their efficiency and broaden their geographic reach, helping to build one of Asia s leading Oil & Gas and Marine distribution companies. Presently, KS Energy has two core businesses its distribution business and its drilling and capital equipment charter business. This proposed business consolidation concerns only its distribution business. Commenting on its latest move, Mr. Kris Wiluan, Chairman and CEO of KS Energy says: When I acquired KS Energy, my strategy was to build an integrated energy services company and the developments today are in line with my plans. Actis is a good choice for us because we have complementary strengths. With the support of our shareholders, I am confident that we will be able to implement the integration of our capabilities. Actis, which has US$4.8 billion funds under management globally, including US$2.4 billion in Asia, works as a long-term partner with its portfolio companies, playing an active role in assisting management to build world-class businesses. Actis Partner Gary Addison said, This is a unique opportunity to work with Kris Wiluan and his strong team. We look forward to a long-term relationship with KS Energy in which we will leverage our experience in the region and our global connectivity, to help build and grow KS Distribution. THE TRANSACTIONS The proposed transactions, when completed, will effectively consolidate all of KS Energy s distribution businesses under a new Singapore incorporated subsidiary KS Distribution. This new entity will consist of the following companies or business divisions: ATS (currently 54.81% owned by KS Energy) Global Tech Offshore and Marine (currently 80% owned by KS Energy) KS Flow Control (currently 100% owned by KS Energy) SSH (currently 28.1% owned by ATS) KS Projects Division (currently this is a business division of KS Energy and will in due course be transferred to and operated under KS Flow Control). As a part of the business consolidation, KS Energy proposes to acquire, through KS Distribution, all the shares of ATS and SSH which KS Energy does not already own (directly or indirectly) through separate schemes of arrangement pursuant to Section 210 of the Companies Act. Upon the completion of the acquisitions, both ATS and SSH will become wholly-owned subsidiaries of KS Distribution and will be delisted from the Singapore Exchange. Page 2 of 8

3 To acquire the shares of ATS and SSH, KS Energy proposes: For every ATS share acquired, the relevant shareholder of ATS will receive a combination of (i) an amount of S$0.230 in cash; and (ii) new KS Energy shares. For every SSH share acquired, the relevant shareholder will receive a combination of (i) an amount of S$0.160 in cash; and (ii) new KS Energy shares. The acquisitions proposed above are inter-conditional on each other. Acquisitions of the entities which are not publicly listed Global Tech, KS Flow and KS Projects Division will each be undertaken by way of a private treaty on and subject to sale and purchase agreements to be entered into between KS Distribution and the relevant shareholders. THE RATIONALE This business consolidation that KS Energy is proposing will actualize Mr. Wiluan s vision to build a globally integrated Oil & Gas and Marine distribution business. Having completed the physical integration by aggregating the Singapore premises of the three companies at 19 Jurong Port Road in September 2008, Mr. Wiluan is now moving to integrate all of the organizational and business operations of the Group s distribution businesses. The rationale for this proposed business consolidation is as follows: [A] CREATING AN INTEGRATED OIL AND GAS AND MARINE DISTRIBUTION BUSINESS By amalgamating the distribution operations of KS Energy, ATS and SSH, KS Distribution will have a large geographic presence with operations in 8 countries. Carrying more than 60,000 Oil & Gas related parts and equipment from more than 140 international brands, KS Distribution is poised to become a formidable one-stop distribution company across Asia and beyond. KS Distribution will be well placed to further penetrate into market such as China, Indonesia and the Middle East where KS Energy sees good opportunities in the Oil & Gas and marine sectors Page 3 of 8

4 The entities within KS Distribution will be able to cross sell their products and services to customers in both existing and new geographic areas, as well as secure new revenue-generating customers [B] INCREASING SCALE AND REACH With an integrated business, KS Distribution will become a leading company in providing a larger suite of products and services offerings to its customers in the Oil & Gas and marine sectors, ranging from valve control equipment and various instrumentation equipment to steel pipes and tubes The consolidated capabilities and increased scale will allow KS Distribution to provide greater value-added services to its customers and suppliers With its critical mass, KS Distribution will be well positioned to secure more distributorship for additional products and have the resources to bid for larger projects [C] CREATING A LEANER AND MORE RESPONSIVE BUSINESS Through full sharing of resources and management talent, the operational integration of KS Distribution will achieve business synergies, increased flexibility and significant cost savings Areas identified for improvement include more collaborative marketing to customers and sharing of common overheads Operational cost savings will allow KS Distribution to invest in improving its processes and systems to better serve its customers and enhance value-added services [D] BENEFITING FROM A STRATEGIC CO-INVESTOR Through the co-investment with Actis, KS Energy and KS Distribution will be able to tap into the Actis network across Africa, Asia and Latin America, to accelerate the expansion of their businesses, improve access to management talent and garner support for KS Energy s future fund raising initiatives. Actis is a leading private equity investor with a 60-year history in emerging markets and a global network spanning across Africa, China, India, Latin America and South East Asia. Page 4 of 8

5 Actis has also been a long-time investor in the wider oil & gas industry, committing more than US$200 million across the exploration, production, equipment and services sectors during the past three years, in China, Pakistan, Nigeria, Tunisia and South East Asia. The above proposed transactions are subject to the approval of the relevant authorities and the shareholders of KS Energy, ATS and SSH. ********** Page 5 of 8

6 About KS Energy Services Limited A Globally Accredited and Integrated Oil & Gas Services Provider KS Energy Services Limited ( KS Energy ) is one of the leading integrated oilfield supply and services providers to the global oil & gas, marine and petrochemical industries. The shares of KS Energy are traded on the Main Board of the Singapore Exchange. The core activities of KS Energy are in the distribution of parts and components, capital equipment charter and provision of drilling and rig management services. KS Energy, together with Aqua-Terra Supply Co., Limited and SSH Corporation Ltd, distribute more than 60,000 line items and represent more than 300 globally accredited brands. Through its wholly-owned subsidiary Atlantic Oilfield Services Ltd ( AOS ), an internationally accredited drilling and rig-management company, KS Energy is now a proven operator providing capital equipment, rig management and drilling services directly to major oil companies for their onshore and offshore production needs. KS Energy's geographic reach spans South East Asia, the Middle East, the Mediterranean, Africa, the North Sea, the European Union and the USA. The KS Energy Group has a workforce of more than 1,000 employees across the world. ABOUT ACTIS Actis is a leading private equity investor in emerging markets, with US$4.8billion funds under management and a growing portfolio of investments in Asia, Africa and Latin America. Actis has over 100 investment professionals on the ground in 9 offices worldwide. In Asia, Actis is a longstanding, experienced private equity investor with a 60-year track record across the region. Actis has more than 40 investment professionals in offices in Beijing, Mumbai and Singapore, and manages more than US$2.4 billion in funds across the region. During the past three years, Actis has committed more than US$200 million in the oil and gas industry, across the exploration, production, equipment and services sectors, including funding APEC, a South East Asian exploration company, in Actis s global platform encompasses top teams in some of the world s key growth markets for oil and gas equipment, including China, Brazil and Nigeria. Actis was awarded Africa Private Equity Firm of the Year by Private Equity International magazine, in both 2007 and In 2008, Zero 2 IPO named Actis one of the Top-10 private equity firms in China. Actis announced the closure of its global emerging markets fund, Actis Emerging Markets 3 (AEM3), in December 2008 with commitments totalling US$2.9 billion. The fund Page 6 of 8

7 received commitments from more than 100 blue-chip investors, including institutions in Singapore and Malaysia, and sovereign wealth funds, public and corporate pension funds, insurance companies, banks, and university endowments from around the world. Page 7 of 8

8 For enquiries please contact: KS Energy Services Limited Diana Leng Director of Treasury Tel Actis Claire Davies Communications Manager Tel ING Bank N.V., Singapore Branch Koh Eng Teh Vice President, Corporate Finance Tel Chua Shih Guan Associate, Corporate Finance Tel Page 8 of 8