GAMUDA BERHAD ("GAMUDA" OR THE "COMPANY")

Transcription

1 GAMUDA BERHAD ("GAMUDA" OR THE "COMPANY") I. PROPOSED RENOUNCEABLE RIGHTS ISSUE OF UP TO 759,577,141 WARRANTS IN GAMUDA ("WARRANT(S) F") ON THE BASIS OF ONE (1) WARRANT F AT AN ISSUE PRICE OF RM0.25 PER WARRANT F FOR EVERY FOUR (4) EXISTING ORDINARY SHARES IN GAMUDA ("GAMUDA SHARE(S)" OR "SHARE(S)") HELD ON AN ENTITLEMENT DATE TO BE DETERMINED LATER ("PROPOSED RIGHTS ISSUE OF WARRANTS"); AND II. PROPOSED ESTABLISHMENT OF A DIVIDEND REINVESTMENT PLAN THAT PROVIDES THE SHAREHOLDERS OF GAMUDA WITH AN OPTION TO ELECT TO REINVEST THEIR CASH DIVIDENDS IN NEW GAMUDA SHARES ("PROPOSED DRP") (COLLECTIVELY REFERRED TO AS THE "PROPOSALS") 1. INTRODUCTION On behalf of the Board of Directors of Gamuda ("Board"), RHB Investment Bank Berhad ("RHBIB") wishes to announce that the Company proposes to undertake the following:- i. a renounceable rights issue of up to 759,577,141 Warrants F at an issue price of RM0.25 per Warrant F on the basis of one (1) Warrant F for every four (4) existing Gamuda Shares held on an entitlement date to be determined and announced later ("Entitlement Date"); and ii. establishment of a dividend reinvestment plan that provides the shareholders of Gamuda with an option to elect to reinvest their cash dividends declared by Gamuda (whether interim, final, special or any other cash dividend) ("Dividend(s)") in new Gamuda Shares. Further details of the Proposals are set out in the ensuing sections of this announcement. 2. DETAILS OF THE PROPOSALS 2.1 Proposed Rights Issue of Warrants Details of the Proposed Rights Issue of Warrants The Proposed Rights Issue of Warrants involves the issuance of up to 759,577,141 Warrants F, on the basis of one (1) Warrant F for every four (4) existing Gamuda Shares. The Warrants F will be provisionally allotted and issued to the shareholders of Gamuda whose names appear in the Record of Depositors of the Company as at the close of business on the Entitlement Date ("Entitled Shareholder(s)"). In any event, the actual number of Warrants F to be issued will be determined based on the issued share capital of Gamuda as at the Entitlement Date, after taking into consideration any shares to be issued prior to the Entitlement Date including the exercise of any outstanding options under the Company's existing employee share option scheme ("ESOS") ("ESOS Option(s)") and any outstanding warrants 2016/2021 of the Company ("Warrant(s) E"). As at 6 December 2018, being the latest practicable date prior to the date of this announcement ("LPD"), 181,459,000 ESOS Options and 388,800,613 Warrants E remain outstanding. 1

2 As at the LPD, the issued and paid-up share capital of Gamuda is RM3,453,371,139 comprising 2,468,048,951 Gamuda Shares. For illustrative purposes, assuming all outstanding ESOS Options and Warrants E are exercised, up to 759,577,141 Warrants F will be issued pursuant to the Proposed Rights Issue of Warrants. The Proposed Rights Issue of Warrants is renounceable in full or in part. Accordingly, the Entitled Shareholders can subscribe for and/or renounce their entitlements to the Warrants F in full or in part. The Warrants F which are unsubscribed or not taken up or not validly taken up shall be made available for excess applications by the other Entitled Shareholders and/or their renouncees. It is the intention of the Board to allocate the excess Warrants F in a fair and equitable manner on a basis to be determined by the Board and announced later by the Company. Any fractional entitlements that may arise from the Proposed Rights Issue of Warrants shall be dealt with in such manner as the Board in its absolute discretion deems fit and expedient or in the best interest of the Company. The Proposed Rights Issue of Warrants will not be implemented in stages Basis of determining the issue price of the Warrants F The Board has fixed the issue price of the Warrant F at RM0.25 per Warrant F after taking into consideration, amongst others, the following:- i. the amount to be raised from the Proposed Rights Issue of Warrants which will be earmarked for the proposed utilisation as set out in Section of this announcement; and ii. the issue price of the Warrants F is deemed sufficiently attractive to encourage subscription of the Warrants F by the Entitled Shareholders and/or their renouncees. For illustrative purposes, based on the issue price of RM0.25 per Warrant F and the illustrative exercise price of RM2.31 per Warrant F, being the five (5)- day volume weighted average market price ("VWAMP") of Gamuda Shares up to and including the LPD, the theoretical fair value of the Warrants F as determined using the Trinomial Option Pricing Model as at the LPD is approximately RM0.38 per Warrant F. The issue price for the Warrants F of RM0.25 per Warrant F represents a discount of 34.21% to the said theoretical fair value of the Warrants F. Such discount is deemed appropriate and attractive as it provides shareholders with an incentive to subscribe for the Warrants F Basis of determining the exercise price of the Warrants F The exercise price of the Warrants F will be determined by the Board at a later date ("Price-fixing Date"), after taking into consideration, amongst others, the following:- i. prevailing market conditions and the five (5)-day VWAMP of Gamuda Shares immediately preceding the Price-fixing Date; and ii. a discount of not more than 10% to the five (5)-day VWAMP of Gamuda Shares immediately preceding the Price-fixing Date. 2

3 For illustrative purposes, the illustrative exercise price per Warrant F is assumed to be at the five (5)-day VWAMP of Gamuda Shares up to and including the LPD of RM2.31 per Gamuda Share Ranking of the new Gamuda Shares to be issued pursuant to the exercise of the Warrants F The new Gamuda Shares arising from the exercise of the Warrants F will, upon allotment and issuance, rank equally in all respects with the existing Gamuda Shares except that they shall not be entitled to any dividends, rights, allotment and/or other distributions that may be declared, made or paid to shareholders of the Company, the entitlement date of which is prior to the date of allotment and issuance of the new Gamuda Shares Undertaking and underwriting arrangements The Company will endeavour to procure written irrevocable and unconditional undertakings from its directors, who are also shareholders of Gamuda, to subscribe in full for their direct entitlements of the Warrants F as at the Entitlement Date ("Undertaking"). The Company will procure the underwriting of the remaining portion of the Warrants F for which no Undertaking is provided ("Underwriting"). The level of Underwriting will be determined after taking into consideration amongst others, the Undertaking, market condition, liquidity and the issue price of the Warrants F Listing of and quotation for the Warrants F An application will be made to Bursa Malaysia Securities Berhad ("Bursa Securities") for the admission of the Warrants F to the Official List of Bursa Securities as well as the listing of and quotation for the Warrants F and new Gamuda Shares to be issued pursuant to the exercise of the Warrants F, on the Main Market of Bursa Securities Indicative salient terms of the Warrants F The Warrants F will be traded on the Main Market of Bursa Securities, separately from the existing Shares and Warrants E. The Warrants F will be issued in registered form and constituted by a deed poll to be executed by the Company and as may be supplemented from time to time ("Deed Poll F"). The indicative salient terms of the Warrants F are set out in Appendix I of this announcement. 3

4 2.1.8 Utilisation of proceeds Based on the issue price of RM0.25 per Warrant F and assuming all the Entitled Shareholders subscribe in full for their respective entitlements, the total gross proceeds expected to be raised from the Proposed Rights Issue of Warrants and the intended utilisation are set out below:- Details of utilisation Time frame for utilisation Minimum Scenario # RM'000 Maximum Scenario # RM'000 Development costs *1 Within 12 months 140, ,000 Working capital *2 Within 12 months 13,053 48,694 Estimated expenses in relation to the Proposals *3 Upon completion 1,200 1,200 Total 154, ,894 Notes:- # For illustrative purposes throughout this announcement, the effects of the Proposals shall be illustrated based on the following two (2) scenarios:- Minimum Scenario : Assuming that none of the outstanding ESOS Options and Warrants E are exercised prior to the Entitlement Date Maximum Scenario : Assuming that all of the outstanding ESOS Options and Warrants E are exercised prior to the Entitlement Date *1 The proceeds earmarked for development costs will be utilised to fund the Group's development project namely, Gamuda Cove. Gamuda Cove is a 1,530-acre mixed township development with an estimated gross development value of RM20 billion comprising residential and commercial properties located in the Southern Klang Valley, Selangor, which will be developed over a period of 20 years. The first phase of Gamuda Cove was launched in August Current development activities of Gamuda Cove mainly include the earthworks and infrastructure works. The intended utilisation will be for the payments to contractors for the earthworks and infrastructure works. *2 The proceeds earmarked for working capital will be utilised to finance the day-to-day operations of Gamuda Group's other existing construction and property development projects. Day-to-day operations expenses includes amongst others, the payments to contractors, suppliers and consultants, purchase of raw materials, sales and marketing expenses as well as payment of overheads. The Group is currently involved in the construction of the Klang Valley Mass Rapid Transit Line 2: Sungai Buloh Serdang Putrajaya Line, the Pan Borneo Highway and several on-going property development projects in the Klang Valley, the Iskandar Johor Region, Hanoi and Ho Chi Minh City (Vietnam) as well as Singapore. *3 The expenses relating to the Proposals comprise, amongst others, the estimated professional fees, fees payable to relevant authorities, expenses to convene the extraordinary general meeting ("EGM"), printing, advertisement expenses, underwriting fees (if required) and other ancillary expenses. If the actual expenses incurred are higher than the budgeted, the deficit will be funded from the portion allocated for the Group's working capital. Conversely, any surplus of funds following the payment of expenses will be utilised as working capital for the Group. 4

5 2.2 Proposed DRP The gross proceeds to be raised from the exercise of the Warrants F are dependent on the actual number of Warrants F exercised during the tenure of the Warrants F. For illustrative purposes, based on the illustrative exercise price of RM2.31 per Warrant F, being the five (5)-day VWAMP of Gamuda Shares up to and including the LPD, the gross proceeds that are expected to be raised from the full exercise of the Warrants F are approximately RM1, million and RM1, million under the Minimum Scenario and Maximum Scenario, respectively. Any proceeds arising from the exercise of the Warrants F will be utilised for investment opportunities in the related businesses of the Group and/or additional working capital to finance the Group's day-to-day operations Details of the Proposed DRP The Proposed DRP will provide the shareholders of Gamuda with an opportunity to reinvest their Dividends in new Gamuda Shares in lieu of receiving cash. In relation to Dividends declared, the Board may, at its absolute discretion, determine whether to pay such Dividends in cash or to offer the shareholders of Gamuda the option to reinvest all or part of such Dividends in new Gamuda Shares ("Reinvestment Option") and where applicable, the size of the portion of such Dividends to which the Reinvestment Option applies ("Electable Portion"). The shareholders of Gamuda should note that the Company is not obliged to undertake the Proposed DRP for every Dividend declared. In this respect, the Electable Portion may encompass the whole or part of the Dividend declared. In the event the Electable Portion is not applicable for the whole Dividend declared, the remaining portion of the Dividend will be paid in cash ("Remaining Portion"). Please refer to Appendix II of this announcement for a process flow chart illustrating how the Proposed DRP is intended to be administered. Unless the Board has determined that the Reinvestment Option will apply to a particular Dividend (or a part thereof), all Dividends declared by Gamuda will be paid wholly in cash to the shareholders of Gamuda in the usual manner through a non-interest bearing account opened by Gamuda to facilitate the payment of Dividends ("Dividend Payment Account") Election to reinvest Dividends into new Gamuda Shares The shareholders of Gamuda shall have the following options in respect of a Reinvestment Option under the Proposed DRP:- (a) to elect to participate in the Reinvestment Option by reinvesting the whole or part of the Electable Portion at the issue price for new Gamuda Shares to be determined on a price-fixing date to be announced later. In the event that only part of the Electable Portion is reinvested, the shareholders of Gamuda shall receive cash for the portion of the Electable Portion not reinvested; or (b) to elect not to participate in the Reinvestment Option and thereby receive their entire Dividend entitlement wholly in cash. 5

6 Approval will be sought from Bursa Securities for the listing of and quotation for the new Gamuda Shares to be issued pursuant to the Proposed DRP on the Main Market of Bursa Securities. An announcement of the books closure date ("Books Closure Date") in relation to a Dividend to which the Reinvestment Option applies will be made, after receipt of the said approval from Bursa Securities, approval from shareholders and other relevant authorities, if required. The issue price for new Gamuda Shares shall be announced either on the same day as or before the announcement of the Books Closure Date in relation to a Dividend to which the Reinvestment Option applies. Subsequent to the Books Closure Date, a notice of election in relation to the Reinvestment Option ("Notice of Election") will be despatched to the shareholders of Gamuda. Instructions will be provided in the Notice of Election in respect of the action to be taken by the shareholders of Gamuda should they wish to exercise the Reinvestment Option. The Notice of Election will also specify, amongst others, the last day (i.e. a date to be fixed and announced by the Board) by which an election to be made by the shareholders of Gamuda in relation to the Electable Portion must be received by the Company ("Expiry Date"). After the Expiry Date, the Company shall transfer funds amounting to the total net Dividends (i.e. after the deduction of any Dividends reinvested in the new Gamuda Shares and the deduction of any applicable income tax) from its account into the Dividend Payment Account held in trust for the shareholders of Gamuda. In accordance with Paragraph 6.09 of Main Market Listing Requirements of Bursa Securities ("Listing Requirements"), Gamuda will, within eight (8) market days from the Expiry Date or such date as may be prescribed by Bursa Securities, allot and issue the new Gamuda Shares and despatch notices of allotment to the shareholders of Gamuda, who exercise the Reinvestment Option ("Allotment Date"). The new Gamuda Shares to be issued pursuant to the Proposed DRP will not be underwritten. In accordance with Paragraphs 8.26(2) and 9.19(2)(a)(ii) of the Listing Requirements, a dividend (in cash, share issuance, or both) will be paid within one (1) month from the Books Closure Date and in any event, within three (3) months from the date of the declaration of the dividend or the date on which the approval is obtained in a general meeting of the Company, whichever is applicable. An announcement in respect of the day on which the new Gamuda Shares will be listed and quoted on the Main Market of Bursa Securities will also be released by the Company accordingly. Dividends for the shareholders of Gamuda who do not exercise their Reinvestment Option will also be paid concurrently in the usual manner on the Allotment Date. Shareholders will receive the Electable Portion in cash if they do not expressly elect in writing to exercise the Reinvestment Option by the Expiry Date. As such, shareholders who wish to receive their Dividends wholly in cash are not required to take any action with regards to the Notice of Election. The shareholding percentage of a shareholder of Gamuda will be diluted should he/she decide not to exercise his/her Reinvestment Option. However, the extent of the dilution will depend on the number of new Gamuda Shares issued pursuant to the level of the Reinvestment Option exercised by other shareholders of Gamuda, which cannot be ascertained at this juncture. 6

7 2.2.3 Pricing of new Gamuda Shares The issue price will be determined by the Board on a price-fixing date to be announced later and shall be based on the VWAMP of Gamuda Shares for the five (5) market days immediately prior to the price-fixing date, with a discount of not more than ten percent (10%). The new Gamuda Shares will be issued free of any brokerage fees or other related transaction costs unless otherwise provided by any statute, law or regulation Eligibility All shareholders of Gamuda, directors of Gamuda ("Directors"), substantial shareholders and any other interested persons (including persons connected with a Director or substantial shareholder) who hold Gamuda Shares, are eligible to participate in the Proposed DRP provided that:- (a) (b) such participation will not result in a breach of any restrictions on such shareholder's holding of Gamuda Shares which may be imposed by any contractual obligation of the said shareholder, or by statute, law or regulation in force in Malaysia or any other relevant jurisdiction, as the case may be (unless the requisite approvals under the relevant law, statute or regulation are first obtained); or there are no restrictions for such participation as prescribed by Gamuda's Constitution. Notices of Election will not be sent to shareholders of Gamuda whose address recorded in the Company's Record of Depositors is not in Malaysia to avoid any violation on the part of Gamuda of any securities laws applicable outside Malaysia Odd lots Under the Proposed DRP, shareholders of Gamuda who exercise the Reinvestment Option may be allotted new Gamuda Shares in odd lots depending on his/her entitlement of new Gamuda Shares. Shareholders who receive odd lots of new Gamuda Shares and wish to trade such odd lots may do so via the Odd Lots Market of Bursa Securities which allows the trading of odd lots (with a minimum of one (1) Gamuda Share) Modification, suspension and termination of the Proposed DRP If the Board considers that by reason of any event or circumstance (whether arising before or after the Board has determined that the Proposed DRP shall apply to any Dividend and before the allotment and issuance of the new Gamuda Shares in respect of the Electable Portion) or by reason of any matter whatsoever it is no longer expedient or appropriate to implement the Proposed DRP in respect of a particular Electable Portion, the Board shall have the power to modify, suspend (in whole or in part) or terminate the Proposed DRP at any time it deems fit and expedient, and without assigning any reason thereof, by giving the shareholders of Gamuda notice in such manner as the Board deems fit. 7

8 Subject to any statute, law or regulation in force in Malaysia, as the case may be, the abovementioned power of the Board shall be valid and subsisting irrespective of whether an election to exercise the Reinvestment Option has been made and notwithstanding any other provisions or terms and conditions stated herein or otherwise. In the event the Board decides to cancel the application of the Proposed DRP to Bursa Securities in relation to the Electable Portion, the shareholders of Gamuda will receive the Electable Portion, in cash, in the usual manner from the Dividend Payment Account Maximum number of new Gamuda Shares The maximum number of new Gamuda Shares to be issued and allotted will depend on, amongst others:- i. the quantum of the Dividend; ii. iii. iv. the Board's decision on the proportion/size of the Electable Portion; the extent to which shareholders of Gamuda elect to exercise the Reinvestment Option; and the issue price of the new Gamuda Shares. Under the Proposed DRP, shareholders of Gamuda who elect to exercise the Reinvestment Option shall not be allotted fractional shares. As such, the amount of the Dividends relating to such fractional entitlement of new Gamuda Shares will be added to the Remaining Portion and paid in cash to the shareholders in the usual manner through a Dividend Payment Account Ranking of the new Gamuda Shares The new Gamuda Shares to be issued pursuant to the Proposed DRP will, upon allotment and issuance, rank equally in all respects with the existing Gamuda Shares except that they shall not be entitled to any dividends, rights, allotment and/or other distributions that may be declared, made or paid to shareholders of the Company, the entitlement date of which is prior to Allotment Date. As the new Gamuda Shares to be issued pursuant to the Proposed DRP are prescribed securities, the new Gamuda Shares will be credited directly into the respective Central Depository System accounts of the shareholders of Gamuda who have elected to reinvest the Electable Portion. No physical share certificates will be issued Taxation A tax voucher will be despatched to all shareholders of Gamuda irrespective of whether the shareholders make an election to exercise the Reinvestment Option. For income tax purposes, a shareholder of Gamuda shall be treated as having received a cash distribution equivalent to the amount of the Dividends declared. Hence, the election for the Reinvestment Option does not relieve the shareholder of any income tax obligation (if applicable) and there is no tax advantage to be gained in exercising the Reinvestment Option or otherwise. 8

9 Utilisation of proceeds The Proposed DRP will potentially result in cash retention for Gamuda if shareholders elect to reinvest their Dividend in new Shares. The amount of proceeds reinvested into the Company arising from the Proposed DRP can only be ascertained on or after the relevant Expiry Date. Therefore, the time frame for utilisation of such cash proceeds can only be determined then. Nonetheless, the net cash proceeds from the Proposed DRP (after the deduction of any related expenses) will be utilised for general corporate and working capital requirements of Gamuda Group such as the purchase of raw materials, sales and marketing expenses as well as payment of overheads General Shareholders approval for the Proposed DRP and the issuance of such number of new Gamuda Shares as may be required pursuant to the exercise of the Reinvestment Option by the shareholders of Gamuda will be sought at an EGM to be convened for the Proposals. Subsequent approvals for any future issuances of new Gamuda Shares pursuant to the Proposed DRP will be sought at the Company's annual general meeting ("AGM") on an annual basis, where applicable. For avoidance of doubt, the specific approval to be obtained from the shareholders of Gamuda for the issuance of new Gamuda Shares arising from the Proposed DRP is in addition to any general mandate obtained under Sections 75 and 76 of the Companies Act 2016 ("Act") (i.e. where the Gamuda Shares to be issued shall not exceed ten percent (10%) of the total issued share capital of the Company (less treasury Shares, if any)), that may be sought, at the Company's AGM on an annual basis. Amendments to the Constitution of Gamuda are not required under the Proposed DRP as the Constitution of Gamuda as well as the Act do not prohibit the implementation of any dividend reinvestment scheme Implications of the Rules on Take-Overs, Mergers and Compulsory Acquisitions ("Rules") and other shareholding limits i. Implications of the Rules Shareholders should take note of Paragraph 4.01 of the Rules and Section 217 of the Capital Markets and Services Act, In particular, a shareholder should be aware that he/she may be under an obligation to extend a take-over offer for the remaining Gamuda Shares not already owned by him/her and persons acting in concert with him/her (if any) (collectively, the "Affected Parties"), if by participating in the Proposed DRP in relation to the reinvestment of the Electable Portion:- (a) the Affected Parties have obtained control via the acquisition or holding of, or entitlement to exercise or control the exercise of more than 33% of the voting shares or voting rights in the Company, or such other amount as may be prescribed in the Rules; or 9

10 (b) the Affected Parties acquire more than 2% of the voting shares or voting rights of the Company in any 6 months period and the Affected Parties hold more than 33% but not more than 50% of the voting shares or voting rights of the Company during the said 6 months period, or such other shareholding percentage as may be prescribed in the Rules. In the event an obligation to undertake a mandatory offer is expected to arise resulting from a shareholder's participation in the Proposed DRP, the Affected Parties may make an application to the Securities Commission Malaysia ("SC") for an exemption from the obligation to undertake a mandatory offer pursuant to the Rules prior to participating in the Proposed DRP. The statements herein do not purport to be a comprehensive or exhaustive description of all the relevant provisions of, or all implications that may arise under, the Rules or other relevant legislation or regulations. Shareholders who are in doubt as to whether they would incur any obligation to make a take-over offer under the Rules as a result of any subscription of new Gamuda Shares through their participation in the Proposed DRP are advised to consult their professional advisers at the earliest opportunity. ii. Other shareholding limits Shareholders are reminded to ensure that their participation in the Proposed DRP will not result in a breach of any restrictions on their respective holding of Gamuda Shares which may be imposed by their contractual obligations, or by statute, law or regulation in force in Malaysia or any other relevant jurisdiction, or by any relevant authorities (unless the requisite approvals under the relevant statute, law or regulation or from the relevant authorities are first obtained or the relevant contractual obligation is otherwise waived in accordance with the terms and conditions of the relevant contracts), or as prescribed in the Company's Constitution. Should the Board be made aware or be informed in writing of any expected breach of such shareholding limits as a result of the exercise of the Reinvestment Option by such shareholder, the Board shall be entitled but not obliged to (save and except where required by law) reduce or limit the number of new Gamuda Shares to be issued to any such shareholder and/or pay to such shareholder the Electable Portion or any part thereof in cash. 10

11 3. RATIONALE AND JUSTIFICATION FOR THE PROPOSALS 3.1 Proposed Rights Issue of Warrants The rationale and justification for the Proposed Rights Issue of Warrants are as follows:- i. The Proposed Rights Issue of Warrants seeks to reward the Entitled Shareholders by providing them with an opportunity to subscribe for an equity derivative of the Company at a relatively low entry cost. In addition, the Proposed Rights Issue of Warrants will enable the Entitled Shareholders to further increase their equity participation in the Company at a pre-determined exercise price during the tenure of the Warrants F and to benefit from the future growth and any potential capital appreciation arising therefrom; ii. Based on the issue price of RM0.25 per Warrant F, Gamuda is expected to raise immediate gross proceeds of up to approximately RM million from the issuance of the Warrants F which will be used for the purposes as set out in Section of this announcement; Gamuda will also be able to raise further proceeds as and when the Warrants F are exercised. The issuance and exercise of the Warrants F will allow the Company to raise funds without incurring additional interest expenses. In addition, the exercise of the Warrants F will increase Gamuda's shareholders' funds which will consequently improve its gearing levels; iii. iv. The issuance and exercise of the Warrants F will further strengthen the capitalisation of the Company as well as potentially improve the trading liquidity of Gamuda Shares; and The Proposed Rights Issue of Warrants will not result in an immediate dilution of the earnings per share ("EPS") until such exercise of the Warrants F. 3.2 Proposed DRP The establishment of the Proposed DRP, as part of Gamuda's capital management plans, is intended to:- i. provide an opportunity to the shareholders of Gamuda to elect to exercise the Reinvestment Option to the Electable Portion into new Shares in lieu of receiving cash under the Proposed DRP. Shareholders are expected to benefit from their participation in the Proposed DRP as the new Shares may be issued at a discount and their subscription of such new Shares will be free from any brokerage fees and other related transaction costs (unless otherwise provided by any statute, law or regulation); ii. iii. strengthen Gamuda's capital position as any cash so retained within Gamuda, that would otherwise be made payable by way of Dividends, will be preserved to fund the Gamuda Group's working capital, capital expenditures and/or continuing growth and expansion plan; and potentialy improve the liquidity of Gamuda Shares currently listed on the Main Market of Bursa Securities through the issuance of new Gamuda Shares pursuant to the Proposed DRP resulting in an enlarged share capital base. The Proposed DRP provides an alternative to Gamuda to balance the demand of its investors and its capital objective. In relation thereto, shareholders will not be worse off as a result of the implementation of the Proposed DRP as those who elect not to exercise the Reinvestment Option will still receive the Dividends in cash. 11

12 4. EFFECTS OF THE PROPOSALS 4.1 Issued share capital The proforma effects of the Proposals on the issued share capital of Gamuda are set out below:- Minimum Scenario Maximum Scenario Shares RM Shares RM Issued share capital as at the LPD 2,468,048,951 3,453,371,139 2,468,048,951 3,453,371,139 Shares to be issued assuming all the outstanding ESOS Options are exercised Reversal of option reserve to share capital assuming all the outstanding ESOS Options are exercised Shares to be issued assuming all the outstanding Warrants E are exercised Reversal of warrants reserve to share capital assuming all the outstanding Warrants E are exercised ,459, ,671, ,494, ,800,613 1,574,642, ,199,153 2,468,048,951 3,453,371,139 3,038,308,564 5,981,379,233 Illustrative number of Shares to be issued pursuant to the Proposed DRP *1 65,814, ,082,936 81,021, ,298,512 2,533,863,589 3,601,454,075 3,119,330,125 6,163,677,745 Shares to be issued assuming full exercise of the Warrants F Reversal of warrants reserve to share capital assuming full exercise of the Warrants F 617,012,237 1,425,298, ,577,141 1,754,623, ,253, ,894,285 Enlarged issued share capital 3,150,875,826 5,181,005,401 3,878,907,266 8,108,195,226 Note:- *1 The pro forma effects of the number of new Shares that the Company could potentially issue pursuant to the Proposed DRP are dependent on several factors including, amongst others, the following:- (a) (b) (c) (d) the quantum of the Dividend; the Board's decision on the proportion/size of the Electable Portion; the extent to which shareholders of Gamuda elect to exercise the Reinvestment Option; and the issue price of the new Shares. 12

13 Strictly for illustrative purpose, the illustrative number of new Shares to be issued pursuant to the Proposed DRP would be as follows:- Minimum Scenario Maximum Scenario Issued Shares as at the LPD 2,468,048,951 2,468,048,951 Add: Shares to be issued assuming all the following are exercised:- Outstanding Warrants E - 388,800,613 Outstanding ESOS Options - 181,459,000 A 2,468,048,951 3,038,308,564 Dividend per Gamuda Share (i) (RM) B Dividend payout (RM) C = A x B 148,082, ,298,514 Illustrative issue price of new Shares (ii) (RM) D Indicative number of new Shares to be issued (iii) E = C / D 65,814,638 81,021,561 Enlarged issued Shares F = A + E 2,533,863,589 3,119,330,125 Percentage of enlarged issued Shares (%) E / F Notes:- (i) (ii) (iii) The dividend per Gamuda Share is based on an illustrative dividend of RM0.06 per Share. For avoidance of doubt, the FYE 31 July 2019 first interim dividend as proposed and announced by the Company on 14 December 2018, will not be applicable for the Proposed DRP. The illustrative issue price is calculated based on the five (5)-day VWAMP of Gamuda Shares up to and including the LPD of RM2.31 and thereafter deducting the FYE 31 July 2019 first interim dividend of RM0.06 per Share. As set out in Section of this announcement, shareholders who elect to exercise the Reinvestment Option under the Proposed DRP shall not be allotted fractional entitlement of new Shares. As such, the amount of the Dividends relating to such fractional entitlement of new Shares will be added to the Remaining Portion and paid in cash to the shareholders in the usual manner. THE REST OF THIS PAGE HAS BEEN INTENTIONALLY LEFT BLANK 13

14 4.2 Consolidated net assets ("NA") per Share and gearing Based on the latest audited consolidated financial statements of Gamuda as at 31 July 2018, the proforma effects of the Proposals on the consolidated NA per Share and gearing of Gamuda are set out below:- Minimum Scenario I II III IV Audited as at 31 July 2018 After adjusting for subsequent events After I and the Proposed Rights Issue of Warrants After II and the Proposed DRP After III and assuming full exercise of the Warrants F RM'000 RM'000 RM'000 RM'000 RM'000 Share capital 3,452,940 3,453,371 *1 3,453,371 3,601,454 5,181,005 *5 Option reserve 57,733 57,495 *1 57,495 57,495 57,495 Capital reserve 141, , , , ,069 Foreign exchange reserve 67,226 67,226 67,226 67,226 67,226 Warrants reserve 97,199 97, ,452 *2 251,452 97,199 Retained earnings 3,751,678 3,751,678 3,750,478 *3 3,602,395 *4 3,602,395 Shareholders' funds/ NA 7,567,845 7,568,038 7,721,091 7,721,091 9,146,389 Shares in issue ('000) 2,467,992 2,468,049 *1 2,468,049 2,533,864 3,150,876 NA per Share (RM) Gross borrowings (RM'000) 5,736,700 5,736,700 5,736,700 5,736,700 5,736,700 Gross gearing ratio (times) Cash and cash equivalent (RM'000) 1,622,905 1,623,098 *1 1,776,151 *2*3 1,776,151 3,201,449 Net borrowings (RM'000) 4,113,795 4,113,602 *1 3,960,549 **2*3 3,960,549 2,535,251 Net gearing ratio (times) Notes:- *1 After adjusting for the exercise of a total of 57,000 ESOS Options at the exercise price of RM3.38 each from 1 August 2018 until the LPD and the reclassification of approximately RM238,000 from the option reserve to the share capital in relation to the said exercise of ESOS Options. *2 After recognising warrants reserve of approximately RM million arising from the issuance of 617,012,237 Warrants F at the issue price of RM0.25 per Warrant F. *3 After deducting estimated expenses of RM1.20 million in relation to the Proposals. *4 After recognising the illustrative dividends amounting to approximately RM million via the issuance of 65,814,638 Gamuda Shares at the illustrative issue price of RM2.25 per Gamuda Share. *5 After adjusting for the increase in share capital of approximately RM1, million pursuant to the full exercise of 617,012,237 Warrants F at the illustrative exercise price of RM2.31 per Warrant F and the reversal of warrants reserve of approximately RM million to the share capital account. 14

15 Maximum Scenario After adjusting for subsequent events I II III IV V After I and assuming all the outstanding After II and the After IV and ESOS Options Proposed assuming full and Warrants E Rights Issue of After III and the exercise of the are exercised Warrants Proposed DRP Warrants F Audited as at 31 July 2018 RM'000 RM'000 RM'000 RM'000 RM'000 RM'000 Share capital 3,452,940 3,453,371 *1 5,981,379 5,981,379 6,163,678 8,108,195 *5 Option reserve 57,733 57,495 * Capital reserve 141, , , , , ,069 Foreign exchange reserve 67,226 67,226 67,226 67,226 67,226 67,226 Warrants reserve 97,199 97, ,894 *2 189,894 - Retained earnings 3,751,678 3,751,678 3,751,678 3,750,478 *3 3,568,179 *4 3,568,179 Shareholders' funds/ NA 7,567,845 7,568,038 9,941,352 10,130,046 10,130,046 11,884,669 Shares in issue ('000) 2,467,992 2,468,049 *1 3,038,309 3,038,309 3,119,331 3,878,908 NA per Share (RM) Gross borrowings (RM'000) 5,736,700 5,736,700 5,736,700 5,736,700 5,736,700 5,736,700 Gross gearing ratio (times) Cash and cash equivalent (RM'000) 1,622,905 1,623,098 *1 3,996,412 4,185,106 *2*3 4,185,106 5,939,729 Net borrowings (RM'000) 4,113,795 4,113,602 *1 1,740,288 1,551,594 *2*3 1,551,594 (203,029) Net gearing ratio (times) (0.02) Notes:- *1 After adjusting for the exercise of a total of 57,000 ESOS Options at the exercise price of RM3.38 each from 1 August 2018 until the LPD and the reclassification of approximately RM238,000 from the option reserve to the share capital in relation to the said exercise of ESOS Options. *2 After recognising warrants reserve of approximately RM million arising from the issuance of 759,577,141 Warrants F at the issue price of RM0.25 per Warrant F. *3 After deducting estimated expenses of RM1.20 million in relation to the Proposals. *4 After recognising the illustrative dividends amounting to approximately RM million via the issuance of 81,021,561 Gamuda Shares at the illustrative issue price of RM2.25 per Gamuda Share. *5 After adjusting for the increase in share capital of approximately RM1, million pursuant to the full exercise of 759,577,141 Warrants F at the illustrative exercise price of RM2.31 per Warrant F and the reversal of warrants reserve of approximately RM million to the share capital account. 15

16 4.3 Substantial shareholder's shareholding The Proposed Rights Issue of Warrants is not expected to have any immediate effect on the shareholding of the substantial shareholder of Gamuda until and unless new Gamuda Shares are issued pursuant to the exercise of the Warrants F under the Proposed Rights Issue of Warrants. Notwithstanding this, the effect on the shareholding of the substantial shareholder of Gamuda arising from the exercise of the Warrants F will depend upon, amongst others, the subscription of their respective Warrants F entitlements and any additional Warrants F under the Proposed Rights Issue of Warrants as well as the number of Warrants F exercised by the substantial shareholder and the other holders of the Warrants F. The Proposed DRP is not expected to have any immediate effect on the substantial shareholder's shareholding until such time as and when the Reinvestment Option pursuant to the Proposed DRP is exercised. The shareholding percentage of the substantial shareholder of Gamuda will not be affected if all shareholders fully exercise their respective Electable Portion. However, where the substantial shareholder fully exercises its respective Electable Portion while some or all of the other shareholders of Gamuda do not elect to reinvest their Electable Portion or elect to reinvest only part of their Electable Portion, the substantial shareholder's shareholding in the Company will increase; and vice versa. The proforma effects of the Proposals on the substantial shareholder's shareholding of Gamuda assuming all shareholders including the substantial shareholder fully subscribe for their respective Warrants F entitlements and exercise their respective Warrants F and Electable Portion, are set out below:- Minimum Scenario Substantial shareholder Employees Provident Fund ("EPF") Substantial shareholder I After the Proposed Rights Issue of Shareholding as at the LPD Warrants < Direct > < Indirect > < Direct > < Indirect > Shares % Shares % Shares % Shares % 279,773, ,773, II III After II and assuming full exercise of the After I and the Proposed DRP Warrants F < Direct > < Indirect > < Direct > < Indirect > Shares % Shares % Shares % Shares % EPF 287,233, ,177, Maximum Scenario Substantial shareholder I Assuming all the outstanding ESOS Shareholding as at the LPD Options and Warrants E are exercised < Direct > < Indirect > < Direct > < Indirect > Shares % Shares % Shares % Shares % EPF 279,773, ,773,

17 Substantial shareholder II III After I and the Proposed Rights Issue of Warrants After II and the Proposed DRP < Direct > < Indirect > < Direct > < Indirect > Shares % Shares % Shares % Shares % EPF 279,773, ,233, Substantial shareholder IV After III and assuming full exercise of the Warrants F < Direct > < Indirect > Shares % Shares % EPF 357,177, Earnings and EPS The Proposals are expected to be completed in the second quarter of The Proposals are not expected to have any material effect on the consolidated earnings of Gamuda Group for the financial year ending ("FYE") 31 July However, the Company's EPS may be diluted as a result of the increase in the number of shares in issue as and when the Warrants F are exercised and new Gamuda Shares are issued pursuant to the Proposed DRP. Nevertheless, the Proposals are expected to contribute positively to the future earnings of Gamuda when the benefits of the utilisation of proceeds from the Proposed Rights Issue of Warrants, conversion of the Warrants F into new Gamuda Shares and the amount of proceeds reinvested into the Company pursuant to the Proposed DRP are realised. 4.5 Convertible securities As at the LPD, save for the ESOS Options and Warrants E, Gamuda does not have any outstanding convertible securities. Any necessary adjustments to the number and/or exercise price of the ESOS Options and Warrants E arising from the Proposed Rights Issue of Warrants will be governed by the terms of the ESOS by-laws and deed poll constituting the Warrants E, respectively. For the avoidance of doubt, no adjustments are required to be made to the number and/or exercise price of the ESOS Options and Warrants E pursuant to the Proposed DRP. 5. APPROVALS REQUIRED AND INTER-CONDITIONALITY The Proposals are subject to the following approvals being obtained:- i. Bursa Securities, for the following:- (a) (b) (c) (d) the admission of the Warrants F to be issued pursuant to the Proposed Rights Issue of Warrants to the Official List of Bursa Securities; the listing of and quotation for the Warrants F to be issued pursuant to the Proposed Rights Issue of Warrants on the Main Market of Bursa Securities; the listing of and quotation for the new Gamuda Shares to be issued pursuant to the exercise of the Warrants F on the Main Market of Bursa Securities; and the listing of and quotation for the new Gamuda Shares to be issued pursuant to the Proposed DRP on the Main Market of Bursa Securities; 17

18 ii. iii. the shareholders of Gamuda, for the Proposals at an EGM to be convened in respect of the Proposals; and any other relevant authorities, if required. The Proposed Rights Issue of Warrants and Proposed DRP are not inter-conditional upon each other. The Proposals are not conditional upon any other proposals undertaken or to be undertaken by the Company. 6. INTEREST OF DIRECTORS, MAJOR SHAREHOLDERS AND/OR PERSONS CONNECTED None of the Directors and/or major shareholders of Gamuda and/or person(s) connected with them have any interest, whether direct or indirect, in the Proposed Rights Issue of Warrants apart from their respective entitlements under the Proposed Rights Issue of Warrants which are available to all Entitled Shareholders, including their right to subscribe for additional Warrants F via the excess application, to which all shareholders of Gamuda are similarly entitled. None of the Directors and/or major shareholders of Gamuda and/or person(s) connected with them have any interest, whether direct or indirect, in the Proposed DRP apart from their respective entitlements under the Proposed DRP, to which all shareholders of Gamuda are similarly entitled. 7. DIRECTORS' STATEMENT The Board, having considered all aspects of the Proposals, is of the opinion that the Proposals are in the best interest of the Company. 8. ESTIMATED TIME FRAME FOR COMPLETION Barring any unforeseen circumstances and subject to receipt of all required approvals, the Board expects the Proposals to be completed in the second quarter of APPLICATION TO THE RELEVANT AUTHORITIES Barring any unforeseen circumstances, the applications to the relevant authorities will be made within two (2) months from the date of this announcement. 10. ADVISER RHBIB has been appointed as the Principal Adviser for the Proposals. This announcement is dated 14 December

19 APPENDIX I Indicative Salient Terms of the Warrants F The indicative salient terms of the Warrants F are set out below:- Number of Warrants F Form and Denomination Exercise Rights Tenure of Warrants F : Up to 759,577,141 Warrants F to be issued to the Entitled Shareholders on the basis of one (1) Warrant F for every four (4) Gamuda Shares held as at the Entitlement Date. : The Warrants F will be separately traded and will be issued in registered form and constituted by a Deed Poll F to be executed by the Company. : Warrants F entitle the registered holders, at any time during the Exercise Period, to subscribe for new Shares on the basis of one (1) new Gamuda Share for one (1) Warrant F at the Exercise Price at any time during the Exercise Period, subject to adjustments in accordance with the provisions of the Deed Poll F. : Five (5) years from the date of issuance of the Warrants F. Issue Price : RM0.25 per Warrant F. Exercise Period Exercise Price : The Warrants F are exercisable at any time within five (5) years commencing on and including the date of issuance of the Warrants F. Warrants F not exercised during the Exercise Period will thereafter lapse and cease to be valid. : The Exercise Price of Warrants F will be determined at a later date, after taking into consideration the theoretical ex-all price of Gamuda Shares at a price-fixing date to be determined by the Board. The Exercise Price may be subject to adjustments under certain circumstances in accordance with the provisions of the Deed Poll F governing the Warrants F. Expiry Date Mode of Exercise Mode of Transfer : A date being five (5) years from and including the date of issuance of the Warrants F. : The registered holder of the Warrant F is required to lodge a subscription form with the Company's registrar, duly completed, signed and stamped together with payment of the Exercise Price by bankers' draft or cashier's order drawn on a bank operating in Malaysia or a money order or postal order issued by a post office in Malaysia. : The Warrants F may be transferred in accordance with the Securities Industry (Central Depositories) Act 1991 and the Rules of Bursa Malaysia Depository Sdn Bhd, and traded on Bursa Securities and subject to the provisions thereof, the Warrants F shall be transferable in a board lot of 100 Warrants F carrying the right to subscribe for 100 new Gamuda Shares, or in multiples thereof or in such other denomination as may be determined by Bursa Securities. No person shall be recognised by the Company as having title to the Warrants F entitling the Warrant F holder thereof to subscribe for a fractional part of a Gamuda Share or otherwise than as the sole holder of the entirety of such Gamuda Share and save as provided under the Deed Poll F, the Warrants F shall not be transferred prior to the listing of and quotation for the Warrants F on the Main Market of Bursa Securities. 19

20 APPENDIX I Voting Rights of Warrants F Status of new Shares arising from the exercise of the Warrants F Board Lot Listing Status Adjustments in the Exercise Price and/or Number of Warrants F Modification : The Warrant F holders are not entitled to any voting right or participation in any forms of distribution and/or offer of further securities in the Company until and unless such Warrant F holders exercise the Warrants F for the new Shares in accordance with the provisions of the Deed Poll F and such new Shares have been allotted and issued to the Warrant F holders. Each Warrant F holder shall be deemed to remain the registered holder of the Warrants F credited in his/ her securities account until the name of the transferee is entered in the Record of Depositors. : The new Shares to be issued pursuant to the exercise of the Warrants F shall, upon allotment, issuance and payment of the Exercise Price, rank equally in all respects with the then existing issued and fully-paid up Gamuda Shares, save and except that they shall not be entitled to any dividends, rights, allotment and/or other distributions which may be declared, made or paid to shareholders, the entitlement date of which (namely, the date as at the close of business on which shareholders must be entered in the Record of Depositors with Bursa Depository in order to participate in any dividends, rights, allotments or other distributions) is prior to the date of allotment and issuance of the new Shares. : For the purpose of trading on the Bursa Securities, a board lot of Warrants F shall comprise 100 Warrants F carrying the right to subscribe for 100 new Gamuda Shares at any time during the Exercise Period, or such denomination as determined by Bursa Securities. : An application will be made to Bursa Securities for the admission of the Warrants F to the Official List of Bursa Securities, and for the listing of and quotation for the Warrants F as well as the new Gamuda Shares arising from the exercise of Warrants F on the Main Market of Bursa Securities. : The Exercise Price and/or number of unexercised Warrants F may be adjusted, calculated or determined by the Board from time to time, at any time during the tenure of the Warrants F in consultation with its professional advisers and certified by the auditors, in the event of alteration to the share capital of the Company, whether by way of, amongst others, rights issue, bonus issue, consolidation or subdivision or conversion of shares, reduction of capital, issuance of shares to shareholders of the Company by way of capitalisation of profits or reserves or capital distribution, offer or invitation to its shareholders or any other events in accordance with the provisions of the Deed Poll F. : Save as expressly provided in the Deed Poll F, no amendment or addition may be made to the provisions of the deed without the sanction of a special resolution unless the amendments or additions are required to correct any typographical errors or relate purely to administrative matters or are required to comply with any provisions of the prevailing laws or regulations of Malaysia or in the opinion of the Company, will not be materially prejudicial to the interests of the Warrant F holders. Any modification, amendment or addition to the Deed Poll F (including the form and content of the warrant certificate) may be effected only (i) by deed executed by the Company and expressed to be supplemental thereof and (ii) subject to the provisions of the Deed Poll F, if the approval of the Warrant F holders by way of a special resolution has been obtained. 20