Shareholders shall have the following options in respect of the Proposed DRS as may be made available by the Board in its absolute discretion:

Transcription

1 SUNWAY BERHAD ( SUNWAY OR THE COMPANY ) PROPOSED DIVIDEND REINVESTMENT SCHEME ( PROPOSED DRS ) 1. INTRODUCTION On behalf of the Board of Directors of Sunway ( Board ), Kenanga Investment Bank Berhad ( Kenanga IB ) is pleased to announce that Sunway is proposing to undertake a recurrent dividend reinvestment scheme that provides the shareholders of Sunway ( Shareholder(s) ) the option to elect to reinvest their cash dividend (which include interim, final, special or any other cash dividends ( Dividend(s) ) in new ordinary share(s) of RM1.00 each in Sunway ( Share(s) or Sunway Share(s) ) ( Proposed DRS ). This scheme would allow the Board, at its absolute discretion, to offer either the Proposed DRS or pay in full cash for the Dividends as and when it deems appropriate vis-à-vis Sunway s capital strategy and plans. Shareholders should note that Sunway is not obligated to make available the Proposed DRS for any Dividend declared in any year. 2. DETAILS OF THE PROPOSED DRS 2.1 Overview The Proposed DRS provides Shareholders with the opportunity to reinvest their Dividends in new Sunway Shares ( New Shares ) in lieu of receiving cash. In relation to the Dividends to be declared, the Board may, at its absolute discretion, determine whether to offer Shareholders the option to reinvest all or part of such Dividends into New Shares ( Reinvestment Option ) and the portion of such Dividends to which the Reinvestment Option is applicable ( Electable Portion ). In the event the Electable Portion is not applicable for the whole Dividend declared, the remaining portion of the Dividend ( Non-Electable Portion ) will be paid in cash. Unless the Board has determined that the Reinvestment Option will apply to a particular Dividend declared (whether in whole or in part), all Dividends as may be declared by Sunway will be paid entirely in cash to its Shareholders in the usual manner through a bank account opened by Sunway to facilitate the payment of Dividends ( Dividend Payment Account ). 2.2 Election to reinvest Dividends in New Shares Shareholders shall have the following options in respect of the Proposed DRS as may be made available by the Board in its absolute discretion: to elect to exercise the Reinvestment Option by reinvesting the whole or part of the Electable Portion at the issue price for New Shares ( Issue Price ). In the event that the Shareholders elect to reinvest only part of the Electable Portion, Shareholders shall receive cash for the remaining portion of the Electable Portion ( Remaining Portion ); or to elect not to exercise the Reinvestment Option and thereby receive their entire Dividend entitlements entirely in cash. 1

2 The approval of Bursa Malaysia Securities Berhad ( Bursa Securities ) will be sought for the listing of and quotation for the New Shares 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 such approval of Bursa Securities has been obtained. The Issue Price shall be announced either on or before the date of 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 Shareholders. Instructions will be provided in the Notice of Election in respect of the action to be taken by Shareholders should they wish to exercise the Reinvestment Option and shall 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 in relation to the Electable Portion must be received by the Company ( Expiry Date ). After the Expiry Date, the Company shall deposit funds amounting to the total net Dividends payable in cash to the Dividend Payment Account In accordance with Paragraph 6.09 of the Main Market Listing Requirements of Bursa Securities ( Listing Requirements ), the Company will, within eight (8) market days from the Expiry Date or such other date as may be prescribed by Bursa Securities, allot and issue the New Shares and despatch notices of allotment to Shareholders who have elected to exercise their Reinvestment Option ( Allotment Date ). Shareholders who do not exercise their Reinvestment Option will also be paid in the usual manner concurrently on the Allotment Date. Other than the funds raised from the reinvestment of Dividends in New Shares, there will be no new funds raised under the Proposed DRS. The Company will make an announcement in respect of the date of the listing and quotation of the New Shares on the Main Market of Bursa Securities. 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 entirely in cash are not required to take any action with regards to the Notice of Election. 2.3 Pricing of New Shares The Issue Price of the New Shares will be determined by the Board on a price fixing date to be announced later and shall be the higher of: an issue price of not more than 10% discount to the adjusted five (5)-market day volumeweighted average market price ( VWAP ) of Sunway Shares immediately preceding the price fixing date. The VWAP shall be adjusted ex-dividend before applying the aforementioned discount in fixing the Issue Price; or the par value of Sunway Shares at the material time. The New Shares will be issued free of any brokerage fees or other related transaction costs unless otherwise provided by any statute, law or regulation. 2

3 2.4 Eligibility All Shareholders are eligible to participate in the Proposed DRS provided that such participation will not result in a breach of any restrictions on such Shareholder s holding of Sunway Shares which may be imposed by any contractual obligation of such Shareholder, or by statute, law or regulation in force in Malaysia or any other relevant jurisdiction, or by any relevant authorities as the case may be or as prescribed in the Memorandum and Articles of Association of the Company. Notices of Election will not be sent to Shareholders whose address in the Company s Record of Depositors is not in Malaysia ( Foreign Addressed Shareholder(s) ) to avoid any violation on the part of Sunway of any securities laws applicable outside Malaysia. 2.5 Odd lots Under the Proposed DRS, Shareholders who exercise the Reinvestment Option and receive New Shares shall be allotted such New Shares in multiples of and not less than one hundred (100) New Shares. The amount of the Dividends relating to the entitlement of New Shares of less than one hundred (100) Shares will be added to the Non-Electable Portion and paid in cash to the Shareholders in the usual manner through the Dividend Payment Account. Shareholders shall not be allotted and issued with odd lots of New Shares arising from their election to exercise the Reinvestment Option. 2.6 Modification, suspension and termination of the Proposed DRS Subject to any requirement or provision imposed by any statute, law or regulation in force in Malaysia, even if the Board had announced the application of the Proposed DRS to a payment of Dividends, the Board is entitled at any time as it deems fit or expedient to modify, suspend (in whole or in part) or terminate the Proposed DRS by giving notice in writing to all Shareholders in such manner as the Board deems fit, irrespective of whether an election to exercise the Reinvestment Option has been made by a Shareholder. In the event the Board decides to cancel the application of the Proposed DRS in relation to the Electable Portion, Shareholders will receive the Electable Portion in cash in the usual manner from the Dividend Payment Account. 2.7 Maximum number of New Shares The maximum number of New Shares to be allotted and issued pursuant to the Proposed DRS will depend on, amongst others: (c) (d) (e) the quantum of the Dividend; the Board s decision on the proportion/size of the Electable Portion; the Issue Price in respect of the New Shares; the number of Shareholders who elect to exercise the Reinvestment Option and the extent of their election; and any necessary downward adjustment by the Board to the final number of New Shares to be allotted and issued to any of the Shareholders as referred to in Section 3.2 of this Announcement. 3

4 Under the Proposed DRS, Shareholders 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 Shares will be added to the Non-Electable Portion or the Remaining Portion, as the case may be, and shall be paid in cash to the Shareholders in the usual manner through a Dividend Payment Account. 2.8 Ranking of the New Shares The New Shares to be issued pursuant to the Proposed DRS will rank pari passu in all respects with the then existing Sunway Shares, save and except that the holders of New Shares shall not be entitled to any dividends, rights, allotments and/or other distributions which may be declared, made or paid to the Shareholders, the entitlement date of which is prior to the Allotment Date. As the New Shares to be issued pursuant to the Proposed DRS are prescribed securities, the New Shares will be credited directly into the respective Central Depository System accounts of the Shareholders who have elected to reinvest the Electable Portion. No physical share certificates will be issued. 2.9 Taxation Irrespective of whether an election is made by a Shareholder, a tax voucher will be despatched to all Shareholders. For income tax purposes, a Shareholder 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 Utilisation of cash retained arising from the Proposed DRS The amount of cash retained arising from the Proposed DRS is subject to the factors set out in Section 2.7 herein and hence cannot be ascertained at this juncture. Accordingly, the time frame for the utilisation of such proceeds may only be determined subsequently. Nonetheless, the net proceeds retained from the Proposed DRS (after deducting estimated expenses for the Proposed DRS) will be utilised for working capital and/or other requirements of Sunway and/or its subsidiaries and/or its joint ventures ( Group ) as the Board may, in their absolute discretion, deem fit in the interest of the Group. For information purposes, the estimated expenses in relation to the Proposed DRS in the first year of implementation amounts to approximately RM180, General The right to participate in the Proposed DRS will be granted to all Shareholders, including directors of Sunway ( Directors ), substantial Shareholders and other interested persons (including persons connected with a Director or substantial Shareholder) of the Company who hold Sunway Shares, subject to the restrictions referred to in Section 2.4 of this Announcement. Shareholders approval for the Proposed DRS will be sought at an extraordinary general meeting ( EGM ) to be convened. The first Shareholders approval for the issuance of such number of New Shares as may be required pursuant to the exercise of the Reinvestment Option by the Shareholders will be sought at the said EGM and such approval shall, except in respect of the issuance of New Shares in connection with an Reinvestment Option which has already been offered by the Company to Shareholder, continue to be in full force until the conclusion of next annual general meeting of Sunway. Subsequent approvals for any future issuances of New Shares pursuant to the Proposed DRS will be sought at the Company s annual general meeting ( AGM ) on an annual basis, where applicable. 4

5 For avoidance of doubt, the specific approval to be obtained from the Shareholders for the issuance of New Shares arising from the Proposed DRS is in addition to any general mandate (i.e. the Shareholders approval obtained under Section 132D of the Companies Act 1965 ( Act ), for general purposes, where the Sunway Shares to be issued shall not exceed ten percent (10%) of the nominal value of the total issued and paid-up share capital of the Company), to be sought at the Company s AGM on an annual basis. The percentage shareholding of a Shareholder may be diluted if he/she/it does not exercise the Reinvestment Option. However, the extent of the dilution will depend on the number of New Shares issued by the Company pursuant to the level of exercise of the Reinvestment Option by the other Shareholders as a whole. Amendments to the Memorandum and Articles of Association of Sunway are not required in respect of the implementation of the Proposed DRS as the Memorandum and Articles of Association of Sunway as well as the Act do not prohibit the implementation of any dividend reinvestment scheme. [The rest of this page has been intentionally left blank] 5

6 A brief process flow chart in relation to the administration of the Proposed DRS is shown below: Step 1 Sunway declares a Dividend to which the Board determines that the Reinvestment Option is made available, obtains Bursa Securities approval for the listing of and quotation for the New Shares, fixes the Issue Price and announces the Books Closure Date for the Electable Portion. Step 2 Sunway despatches the Notice of Election to the Shareholders. Step 3 Shareholders to elect whether to reinvest the Electable Portion (whole or part) upon receipt of Notice of Election. DECISION YES NO Shareholders to complete and return the Notice of Election to the Registrar of Sunway on or before the Expiry Date. Shareholders need not take any action and disregards the Notice of Election. Step 4 Sunway to allot and credit New Shares into the CDS accounts of Shareholders who elect to exercise the Reinvestment Option ( Shares Allotment ); and Step 5 Sunway to pay the Non-Electable Portion and the Remaining Portion of the Electable Portion not reinvested,, if any, in cash ( DRS Payment ). Sunway to pay Dividend entirely in cash to Shareholders who elect not to reinvest any of the Electable Portion ( Cash Payment ). Notes: (1) (2) In respect of Step 3, after the Expiry Date, funds will be deposited to a Dividend Payment Account. In respect of Step 5, Shareholders should note that the Cash Payment, the Share Allotment and the DRS Payment will take place on the same day, which shall be 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. 6

7 3. IMPLICATIONS OF THE MALAYSIAN CODE ON TAKE-OVERS AND MERGERS, 2010 ( CODE ) 3.1 The Code The attention of all Shareholders is drawn to Section 9(1) of Part III of the Code and Section 217 of the Capital Markets and Services Act, 2007 ( CMSA ). In particular, a Shareholder should note that he may be under an obligation to extend a mandatory takeover offer for the remaining Sunway Shares in the Company not already owned by him and persons acting in concert with him (collectively, the Affected Parties ), if:- by participating in the Proposed DRS in relation to the reinvestment of the Electable Portion, the Affected Parties have obtained control via the acquisition or holding of, or entitlement to exercise or control the exercise of voting shares or rights of thirty-three percent (33%) or more, or such other amount as may be prescribed in the Code, in the Company, howsoever effected; and the Affected Parties acquire, including by participating in the Proposed DRS in relation to any Electable Portion, more than two percent (2%) of the voting shares or voting rights of the Company in any six (6) month period, and the Affected Parties hold more than thirty-three percent (33%) but not more than fifty percent (50%) of the voting shares or voting rights of the Company during the said six (6) month period. Therefore, in the event an obligation to undertake a mandatory take-over offer is expected to arise resulting from the exercise of the Reinvestment Option, the Affected Parties may make an application to the Securities Commission of Malaysia for a waiver from the obligation to undertake a mandatory offer pursuant to the Code prior to exercising their Reinvestment Option. 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 Code or any other relevant legislation or regulations in force in Malaysia. Shareholders who are in doubt as to whether they would incur any obligation to make a mandatory take-over offer under the Code as a result of any subscription of New Shares through their participation in the Proposed DRS are advised to consult their professional advisers at the earliest opportunity. 3.2 Other shareholding limits Shareholders are reminded to ensure that their participation will not result in a breach of any restrictions on their respective holding of Sunway Shares which may be imposed by any of the Shareholders contractual obligations, or by statute, law or regulation in force in Malaysia or any other relevant jurisdiction, or by any relevant authorities, as the case may be (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 Memorandum and Articles of Association. In view of the shareholding limits referred as above, the Board shall be entitled but not obliged to (save and except where required by law) reduce or limit the number of New Shares to be issued to any Shareholder should the Board be aware or be informed of any expected breach of such shareholding limits as a result of the exercise of the Reinvestment Option by such Shareholder. 7

8 4. RATIONALE FOR THE PROPOSED DRS 4.1 Capital management strategy The Proposed DRS will provide Sunway with additional flexibility in managing its capital position as part of Sunway s capital management strategy. In addition, the election by the Shareholders for New Shares will enlarge the share capital base of Sunway. Under the Proposed DRS, the cash to be retained which would otherwise be paid by way of dividend, will be preserved to fund the general working capital purposes of the Sunway Group. 4.2 Enhancing shareholders value The Proposed DRS provides the Shareholders with an opportunity to enhance and maximise the value of their shareholdings in Sunway by investing in New Shares at a discount as detailed in Section 2.3 of this Announcement. The Proposed DRS also provides flexibility to the Shareholders in meeting their investment objectives as the Shareholders will have the option of receiving Dividends in cash and/or reinvesting in Sunway Shares without having to incur brokerage fees and related transaction costs, except for minimal subscription expenses, unless otherwise provided by any statute, law or regulation. 4.3 Alternative mode of Dividend payment The implementation of the Proposed DRS will provide an avenue to the Shareholders to exercise the Electable Portion under the Reinvestment Option into New Shares in lieu of receiving cash. Shareholders will not be worse off as a result of the implementation of the Proposed DRS as Shareholders are still entitled to elect to receive their Dividends in cash. 5. EFFECTS OF THE PROPOSED DRS The effects of the Proposed DRS are dependent on several factors, which include, amongst others: (c) (d) (e) the quantum of the Dividend; the Board s decision on the proportion/size of the Electable Portion; the Issue Price in respect of the New Shares; the number of Shareholders elect to exercise the Reinvestment Option and the extent of their election; and any necessary downward adjustment by the Board to the final number of New Shares to be allotted and issued to any of the Shareholders as referred to in Section 3.2 of this Announcement. As at 15 May 2014, being the latest practicable date ( LPD ), the issued and paid-up share capital of the Company is RM1,723,678,356 comprising 1,723,678,356 Sunway Shares. For information purposes, the Company holds no treasury Shares as at the LPD. 8

9 As at the LPD, the Company has 289,599,049 outstanding warrants issued on 18 May 2011 and expiring on 17 May 2016 ( Warrants 2011/2016 ). There are a total of 125,715,300 outstanding options over the Sunway Shares under the Employee Share Option Scheme of the Company as at the LPD, out of which a total of 28,881,900 had been vested and not exercised ( Outstanding ESOS Options ). Set out below is an illustration of the number of New Shares that the Company could potentially allot and issue, after taking into consideration the following assumptions: (c) a total dividend of 10% or 10 sen per Share ( Illustrative Dividend ); the Board determines that the Electable Portion applies to the entire Illustrative Dividend amount; and all Shareholders elect to exercise their Reinvestment Option and reinvest the whole of the Electable Portion in New Shares. The illustration of the number of New Shares that the Company could potentially allot and issue is based on the following scenarios: Minimum Scenario Maximum Scenario : Assuming that none of the outstanding Warrants 2011/2016 and Outstanding ESOS Options are exercised prior to the implementation of the Proposed DRS. : Assuming full exercise of the outstanding Warrants 2011/2016 are converted into Sunway Shares at the conversion price of RM2.50 and Outstanding ESOS Options are converted into Sunway Shares at the exercise price of RM2.76 prior to the implementation of the Proposed DRS (collectively known as the Proforma Adjustments ). Based on the above scenarios, the illustrative number of New Shares that the Company could potentially allot and issue under the Proposed DRS is estimated as follows: Minimum Scenario Maximum Scenario Issued and paid-up share capital as at the LPD Illustrative Dividend (RM per Sunway Share) 1,723,678,356 2,042,159,305 (A) (B) Illustrative Dividend payout 172,367, ,215,931 (C) = (A) x (B) Illustrative Issue Price of New Shares (RM)* (D) New Shares to be issued # 65,789,250 77,945,012 (E) = (C) / (D) Notes: * Calculated based on the (5) five-market day VWAP of Sunway Shares as at 15 May 2014 of RM3.01 after deducting the Illustrative Dividend and thereafter applying the maximum allowable discount of ten percent (10%). # The 65,789,250 and 77,945,012 New Shares to be issued represent approximately 3.82% of the Company s enlarged issued and paid-up share capital under the Minimum and Maximum Scenarios respectively. 9

10 5.1 Share capital Under the Proposed DRS, the Company s issued and paid-up share capital will increase due to the issuance of New Shares pursuant to any election by Shareholders of the Reinvestment Option whenever the Reinvestment Option is offered by the Board. For illustration purposes only, based on the assumptions as stated in Section 5 of this Announcement, the proforma effects of the Proposed DRS on the Company s issued and paidup share capital are as follows: <-Minimum Scenario-> Shares ( 000) (RM 000) <-Maximum Scenario-> Shares ( 000) (RM 000) Issued and paid-up share capital as at the LPD To be issued pursuant to the exercise of the outstanding Warrants 2011/2016 To be issued pursuant to the exercise of the Outstanding ESOS Options Proforma enlarged issued and paid-up share capital 1,723,678 1,723,678 1,723,678 1,723, , , ,882 28,882 1,723,678 1,723,678 2,042,159 2,042,159 To be issued pursuant to the Proposed DRS 65,789 65,789 77,945 77,945 Issued and paid-up share capital after the Proposed DRS 1,789,468 1,789,468 2,120,104 2,120,104 [The rest of this page has been intentionally left blank] 10

11 5.2 Substantial Shareholders shareholdings The substantial Shareholders percentage shareholdings in Sunway will not be affected should all Shareholders fully exercise their respective Electable Portion. However, the shareholding percentage of the substantial Shareholders who elect to reinvest their Electable Portion will increase, in the event some or all of the other Shareholders do not elect to reinvest their Electable Portion or elect to reinvest only part of their Electable Portion. Vice versa, the shareholding percentage of the substantial Shareholders will decrease, in the event they elect to not reinvest their Electable Portion while other Shareholders elect to reinvest their Electable Portion. For illustrative purposes only, based on the assumptions as stated in Section 5 of this Announcement, the proforma effects of the Proposed DRS on all substantial Shareholders shareholdings in the Company (based on the Register of Substantial Shareholders as at the LPD) are as follows: Minimum Scenario (I) (II) As at the LPD After (I) and the Proposed DRS Direct Indirect Direct Indirect Substantial shareholders of Sunway Tan Sri Dato Seri Dr Jeffrey Cheah Fook Ling, AO 76,988, (1) 877,610, ,927, (1) 911,107, Puan Sri Datin Seri (Dr) Susan Cheah Seok Cheng - - (2) 954,599, (2) 991,034, Sarena Cheah Yean Tih 577, (3) 953,889, , (3) 990,297, Evan Cheah Yean Shin 134, (4) 953,888, , (4) 990,296, Sungei Way Corporation Sdn Bhd 830,199, ,887, Active Equity Sdn Bhd - - (5) 830,199, (5) 861,887, GIC Private Limited for Government of Singapore 150,666, ,417, Notes: (1) (2) (3) (4) (5) Deemed interest by virtue of Section 6A of the Companies Act, 1965 held through Active Builder Sdn Bhd, Jef-San Enterprise Sdn Bhd, Sungei Way Corporation Sdn Bhd and children. Deemed interest by virtue of Section 6A of the Companies Act, 1965 held through Jef-San Enterprise Sdn Bhd, spouse and children. Deemed interest by virtue of Section 6A of the Companies Act, 1965 held through Active Builder Sdn Bhd, Sungei Way Corporation Sdn Bhd, spouse and parents. Deemed interest by virtue of Section 6A of the Companies Act, 1965 held through Sungei Way Corporation Sdn Bhd and parents. Deemed interest by virtue of Section 6A of the Companies Act, 1965 held through Sungei Way Corporation Sdn Bhd. 11

12 Maximum Scenario (I) (II) (III) As at the LPD After (I) and the Proforma Adjustments After (II) and the Proposed DRS Direct Indirect Direct Indirect Direct Indirect Substantial shareholders of Sunway Tan Sri Dato Seri Dr Jeffrey 76,988, (1) 877,610, (2) 92,431, (3) 1,024,698, ,959, (3) 1,063,808, Cheah Fook Ling, AO Puan Sri Datin Seri (Dr) Susan - - (4) 954,599, (5) 125, (4) 1,117,004, , (4) 1,159,638, Cheah Seok Cheng Sarena Cheah Yean Tih 577, (6) 953,889, (7) 1,074, (8) 1,115,499, ,115, (8) 1,158,075, Evan Cheah Yean Shin 134, (9) 953,888, (10) 556, (11) 1,115,498, , (11) 1,158,074, Sungei Way Corporation Sdn Bhd 830,199, (12) 969,520, ,006,525, Active Equity Sdn Bhd - - (13) 830,199, (14) 1,560, (13) 969,520, ,619, (13) 1,006,525, GIC Private Limited for Government of Singapore 150,666, (15) 186,087, ,189, Notes: (1) (2) (3) (4) (5) (6) (7) (8) (9) (10) (11) (12) (13) (14) (15) Deemed interest by virtue of Section 6A of the Companies Act, 1965 held through Active Builder Sdn Bhd, Jef-San Enterprise Sdn Bhd, Sungei Way Corporation Sdn Bhd and children. Assuming full exercise of 11,142,367 outstanding Warrants 2011/2016 and 4,300,000 outstanding ESOS Options held by Tan Sri Dato Seri Jeffrey Cheah Fook Ling, AO. Deemed interest by virtue of Section 6A of the Companies Act, 1965 held through Active Equity Sdn Bhd, Active Builder Sdn Bhd, Jef-San Enterprise Sdn Bhd, Sungei Way Corporation Sdn Bhd, spouse and children. Deemed interest by virtue of Section 6A of the Companies Act, 1965 held through Jef-San Enterprise Sdn Bhd, spouse and children. Assuming full exercise of 125,000 outstanding ESOS Options held by Puan Sri Datin Seri (Dr) Susan Cheah Seok Cheng. Deemed interest by virtue of Section 6A of the Companies Act, 1965 held through Active Builder Sdn Bhd, Sungei Way Corporation Sdn Bhd, spouse and parents. Assuming full exercise of 97,058 outstanding Warrants 2011/2016 and 400,000 outstanding ESOS Options held by Sarena Cheah Yean Tih. Deemed interest by virtue of Section 6A of the Companies Act, 1965 held through Active Equity Sdn Bhd, Active Builder Sdn Bhd, Sungei Way Corporation Sdn Bhd, spouse and parents. Deemed interest by virtue of Section 6A of the Companies Act, 1965 held through Sungei Way Corporation Sdn Bhd and parents. Assuming full exercise of 22,589 outstanding Warrants 2011/2016 and 400,000 outstanding ESOS Options held by Evan Cheah Yean Shin. Deemed interest by virtue of Section 6A of the Companies Act, 1965 held through Active Equity Sdn Bhd, Sungei Way Corporation Sdn Bhd and parents. Assuming full exercise of 139,320,922 outstanding Warrants 2011/2016 held by Sungei Way Corporation Sdn Bhd. Deemed interest by virtue of Section 6A of the Companies Act, 1965 held through Sungei Way Corporation Sdn Bhd. Assuming full exercise of 1,560,318 outstanding Warrants 2011/2016 held by Active Equity Sdn Bhd. Assuming full exercise of 35,420,438 outstanding Warrants 2011/2016 held by GIC Private Limited for Government of Singapore. [The rest of this page has been intentionally left blank] 12

13 5.3 Net asset ( NA ) and gearing The implementation of the Proposed DRS will increase the Company s NA and in turn, improve the Group s gearing ratio (without taking into account the expenses related to the payment of the Dividends entirely in cash and the Proposed DRS, respectively) as a result of the reinvestment of the Electable Portion in New Shares by the Shareholders. The quantum of the increase in NA and improvement in gearing ratio are dependent on the extent the Shareholders elect to reinvest the Electable Portion in New Shares. 5.4 Earnings per Share ( EPS ) The consolidated EPS of the Sunway Group will be diluted depending on the extent the Shareholders elect to reinvest the Electable Portion in New Shares. However, such reinvested amount will be retained to fund the working capital and/or other requirements of the Sunway Group and is expected to contribute positively to the future earnings of the Sunway Group. 5.5 Convertible securities Save for the 125,715,300 Outstanding ESOS options and 289,599,049 outstanding Warrants 2011/2016 as at the LPD, the Company does not have any other convertible securities. The terms of the bylaws constituting the outstanding ESOS options and the terms of the deed poll constituting the Warrants dated 28 June 2011 provide that the Proposed DRS will not give rise to any adjustment to the exercise price and number of the ESOS options and Warrants as long as the issue of new Shares in any one financial year do not exceed 10% of the Company s outstanding issued share capital. 6. APPROVALS REQUIRED The Proposed DRS is conditional upon the following approvals being obtained: (c) the approval of the Shareholders for the Proposed DRS and the issuance of the New Shares arising from the Proposed DRS, at the forthcoming EGM; the approval of the Bursa Securities for the listing of and quotation for the New Shares to be issued pursuant to the Proposed DRS, on the Main Market of Bursa Securities; and such other approvals, waiver and/or consents of any relevant authorities/parties, if required. The Proposed DRS is not conditional or inter-conditional upon any other corporate exercise undertaken or to be undertaken by the Company. 7. INTERESTS OF DIRECTORS, MAJOR SHAREHOLDERS AND/OR PERSONS CONNECTED TO THEM None of the Directors, major Shareholders and/or any persons connected with them have any interest, direct or indirect, in the Proposed DRS, save for their respective entitlements as Shareholders under the Proposed DRS as well as their right to participate in the Proposed DRS to which all other Shareholders are similarly entitled. 13

14 8. DIRECTORS STATEMENT After having considered all aspects of the Proposed DRS (including but not limited to the rationale and financial effects of the Proposed DRS), the Board is of the opinion that the Proposed DRS is in the best interests of the Company. 9. APPLICATION TO THE RELEVANT AUTHORITIES Application to Bursa Securities for the listing of and quotation for the New Shares to be issued pursuant to the Proposed DRS on the Main Market of Bursa Securities will be made prior to the announcement of price of the New Shares and the Books Closure Date. 10. ADVISERS For the purpose of the Proposed DRS: Kenanga IB has been appointed as the principal adviser to the Company for the implementation of the Proposed DRS; and Messrs. Lee Hishammuddin Allen & Gledhill has been appointed as the legal counsel to the Company. 11. ESTIMATED TIME FRAME FOR THE IMPLEMENTATION OF THE PROPOSED DRS Subject to the receipt of the necessary approvals stated in Section 6 above and barring any unforeseen circumstances, the Proposed DRS is expected to be ready for implementation by the second half of A detailed indicative timeline for the implementation of the Proposed DRS for any Dividend declared will be set out in the circular to shareholders to be despatched in due course. This announcement is dated 23 May