PROPOSED SUBSCRIPTION OF 27,000,000 NEW ORDINARY SHARES IN THE CAPITAL OF THE COMPANY AT THE ISSUE PRICE OF S$0.065 PER SHARE

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1 (Incorporated in the Republic of Singapore) Company Registration No G This announcement has been prepared by the Company and its contents have been reviewed by the Company s sponsor, PrimePartners Corporate Finance Pte. Ltd. (the Sponsor ), for compliance with the Singapore Exchange Securities Trading Limited (the SGX-ST ) Listing Manual Section B: Rules of Catalist. The Sponsor has not independently verified the contents of this announcement. This announcement has not been examined or approved by the SGX-ST. The Sponsor and the SGX-ST assume no responsibility for the contents of this announcement, including the accuracy, completeness or correctness of any of the information, statements or opinions made or reports contained in this announcement. The contact person for the Sponsor is Mr Thomas Lam, Associate Director, Continuing Sponsorship, at 16 Collyer Quay, #10-00 Income at Raffles, Singapore , telephone (65) PROPOSED SUBSCRIPTION OF 27,000,000 NEW ORDINARY SHARES IN THE CAPITAL OF THE COMPANY AT THE ISSUE PRICE OF S$0.065 PER SHARE 1. INTRODUCTION The Board of Directors (the Board or Directors ) of Natural Cool Holdings Limited (the Company and together with its subsidiaries, the Group ) wishes to announce that the Company had on 20 October 2016 entered into a subscription agreement (the Agreement ) with Mr. Ng Quek Peng (the Subscriber ), pursuant to which the Subscriber has agreed to subscribe for 27,000,000 new ordinary shares in the capital of the Company (the Shares ) at an issue price of S$0.065 (the Issue Price ) for each Share amounting to an aggregate cash consideration of S$1,755,000 payable by the Subscriber to the Company, and on the terms and subject to the conditions of the Agreement (the Proposed ). The Company will allot and issue the Shares pursuant to the general share issue mandate (the Share Issue Mandate ) approved by the shareholders of the Company ( Shareholders ) at the annual general meeting of the Company held on 26 April 2016 (the 2016 AGM ). As at the date of the 2016 AGM, the total number of ordinary shares in the capital of the Company ( Shares ) was 205,447,985. The Share Issue Mandate authorises the Directors to allot and issue new Shares not exceeding 100.0% of the total number of issued Shares (excluding treasury shares) as at the date of the 2016 AGM, of which the aggregate number of shares to be issued other than on a pro rata basis to existing Shareholders shall not exceed 50.0% of the total number of issued Shares (excluding treasury shares) as at the date of the 2016 AGM. Accordingly, the total number of shares that may be issued pursuant to the Share Issuance Mandate is 205,447,985 Shares, of which the maximum number of Shares to be issued other than on a pro rata basis is 102,723,992 Shares. As at the date of this announcement, 18,000,000 Shares ( Conversion Shares ) have been issued on 25 May 2016 pursuant to the conversion of the outstanding convertible loan notes of an aggregate principal amount of S$2,700,000 (the Convertible Loan Notes ). As such, the number of Shares for the purposes of the Share Issue Mandate may be adjusted upwards under Rule 806(3) of the Listing Manual Section B: Rules of Catalist to 223,447,985 Shares and the maximum number of Shares that may be issued other than on a pro rata basis under the Share Issue Mandate is 111,723,992 Shares. As at the date of this announcement, no Shares have been or are to be issued under the Share Issue Mandate. Accordingly, a balance of 111,723,992 Shares may be issued other than on a pro rata basis pursuant to the Share 1

2 Issue Mandate and hence the 27,000,000 Shares will be issued pursuant to the Share Issue Mandate. The Proposed will be carried out pursuant to Section 272B of the Securities and Futures Act (Cap. 289) of Singapore. As such, no prospectus or offer information statement will be issued in connection with the Proposed. 2. THE PROPOSED SUBSCRIPTION 2.1 The Shares and the Issue Price The Issue Price represents a discount of approximately 7.14% to the volume weighted average price of S$0.07 for trades done on Shares on the Catalist of the SGX-ST ( Catalist ) on 6 October 2016, being the last Market Day 1 preceding the date on which the Agreement was signed. The Shares, when allotted and issued by the Company, will rank pari passu in all respects with the Shares existing as at the date of issue of the Shares, except that they will not rank for any dividend, right, allotment or other distribution, the Record Date for which falls on or before the date of issue of the Shares. For the purposes herein, the Record Date means, in relation to any dividends, rights, allotments or other distributions that may be declared or paid, the date as at the close of business (or such other time as may have been notified by the Company) on which the Shareholders must be registered with the Company or The Central Depository (Pte) Limited, as the case may be, in order to participate in such dividends, rights, allotments or other distributions that may be declared or paid. As at the date of this announcement, the Company has an issued and paid-up share capital (excluding treasury shares) of S$34,656,902 comprising 223,447,985 Shares (the Existing Share Capital ). Upon completion of the Proposed ( Completion ), the Existing Share Capital will increase to S$36,411,902 comprising 250,447,985 Shares. The Shares represent approximately 12.1% of the Existing Share Capital and approximately 10.8% of the enlarged issued and paid-up share capital of the Company after Completion. The Company will be making an application to the SGX-ST through its continuing sponsor, PrimePartners Corporate Finance Pte. Ltd., for permission to deal in and for the listing and quotation of the Shares on Catalist. An appropriate announcement on the outcome of the application for the permission to deal in and for the listing and quotation of the Shares on Catalist will be made in due course. 2.2 Conditions The Proposed is conditional upon, amongst others, the receipt of the listing and quotation notice from the SGX-ST by the Company for the dealing in and listing and quotation of the Shares on Catalist and such approval not having been withdrawn or revoked as at the date of Completion, and where such approval is granted subject to conditions, such conditions being acceptable to and fulfilled by the Company. Completion shall take place within seven (7) business days from the date on which the last condition precedent has been satisfied, fulfilled or waived. 2.3 Information on the Subscriber The Subscriber was introduced to the Chairman of the Board by a Director two (2) months ago and the Chairman is confident in the Subscriber s ability to assist in the growth of the Group The Subscriber has over 30 years of experience in the corporate finance and securities industry in foreign and local financial institutions in Singapore and Malaysia. Apart from the finance industry, the Subscriber has experience in direct investments and infrastructure development. 1 Market Day means a day on which the SGX-ST is open for trading in securities. 2

3 The Subscriber is currently an independent director of Japfa Ltd, a company listed on the SGX-ST. The Subscriber graduated with a degree in Civil Engineering from the University of London in 1976 and has been a member of the Institute of Chartered Accountants in England and Wales since Apart from the Proposed, the Subscriber has no connections (including business relationships) with the Company, its controlling Shareholders or its Directors, and will not hold the Shares in trust or as a nominee for other persons. No placement agent has been appointed in relation to the Proposed and no commission or finder s fee is payable by the Company to any person in relation to the Proposed. No share borrowing arrangement has been entered into to facilitate the Proposed. 2.4 Rationale for the Proposed The Board refers to the Company s announcements dated 22 January 2013, 23 January 2013, 3 April 2013 and 18 August 2014 (the Previous Announcements ) in respect of the Company s subscription of shares in HMK Energy Pte. Ltd. ( HMK Energy ) and subscription of US$1,680,000 in principal amount of zero coupon unsecured convertible bonds issued by HMK Energy (the Bonds ), due for redemption by HMK Energy in full on 18 August Please refer to the Previous Announcements which are available on the website of the SGX-ST at for more information on HMK Energy and the Bonds. Further to internal discussions, the Board had, by way of majority resolutions on 29 September 2016, resolved to divest the Company s interest in 160,000 ordinary shares in the share capital of HMK Energy representing 16.0% of its issued and paid-up share capital (the Proposed Divestment ), to monetise its non-yielding assets. As at the date of this announcement, no agreement has been entered into, and no buyer has been identified, in connection with the Proposed Divestment. Further announcements will be made as and when appropriate. The Group is now intending to focus on the development of its Aircon and Paint businesses. Having reviewed the credentials of the Subscriber, the Board (by way of majority) believes that the Subscriber will be able to add strategic value to the Group s business and diversity of skills and expertise as an executive officer of the Company. The Board (by way of majority) also believes that the Company will be able to leverage on the Subscriber s strong business networks and extensive experience in the corporate finance and securities industry. Subject to approval of the nominating committee of the Company and the remuneration committee of the Company (with respect to the remuneration package of the Subscriber), the Company intends to appoint the Subscriber as an executive officer of the Company, responsible for spearheading the business development of the Group at the local and regional level in respect of the Group s Aircon and Paint businesses. The Subscriber believes in the growth and prospects of the Company and is demonstrating such confidence through the Proposed, which will align the interests of the Subscriber with that of the Company. The Company will release further announcements on this appointment after the aforesaid approvals have been obtained. 2.5 Use of Proceeds Upon Completion, the estimated net proceeds (the Net Proceeds ) will be approximately S$1,732,000 (after deducting expenses of approximately S$23,000 incurred by the Company in connection with the Proposed ). The Company intends to use the Net Proceeds to fund the regional and local growth and expansion of the Group s Aircon and Paint businesses. Pending the deployment of the Net Proceeds, such proceeds may be placed as deposits with financial institutions or invested in short-term money markets or debt instruments or for any other purposes on a short-term basis as the Directors may, in their absolute discretion, deem fit. 3

4 The Company will make periodic announcements on the utilisation of the Net Proceeds as and when the Net Proceeds are materially disbursed, and will provide a status report on the use of the Net Proceeds in the Company s interim and full-year financial statements and the annual report of the Company. Where the proceeds have been used for working capital purposes, the Company will provide a breakdown with specific details on how the proceeds have been applied in the announcements and status report. Where there is any material deviation from the stated use of proceeds, the Company will announce the reasons for such deviation. 2.6 Working Capital The Directors are of the opinion that after taking into consideration the present financial position of the Group, including: (a) (b) its present bank facilities, the working capital available to the Group is sufficient to meet its present requirements. Nevertheless, the Company is undertaking the Proposed for the reasons stated in paragraphs 2.4 and 2.5 above; and the present bank facilities and the Net Proceeds, the working capital available to the Group is sufficient to meet its present requirements. 3. FINANCIAL EFFECTS OF THE PROPOSED SUBSCRIPTION 3.1 Assumptions The pro forma financial effects of the Proposed on (a) the consolidated net tangible assets ( NTA ) per Share, and (b) the consolidated earnings per Share ( EPS ) set out below, are prepared purely for illustrative purposes only and do not reflect the actual financial effects or the future financial performance and condition of the Company and/or the Group after the Proposed. The pro forma financial effects below have been prepared based on the following bases and assumptions: (a) the latest audited consolidated financial statements of the Company for its financial year ended 31 December 2015 (being the most recent announced consolidated full-year financial statements of the Company); and (b) the Conversion Shares have been issued on 1 January NTA per Share Assuming that the Proposed had been completed on 31 December 2015, the pro forma financial effects on the consolidated NTA per Share would be as follows: Before the Proposed After the Proposed Number of Shares 223,447, ,447,985 NTA attributable to Shareholders (S$ 000) NTA per Share (Singapore cents) 48,423 50,

5 3.3 EPS Assuming that the Proposed had been effected on 1 January 2015, the pro forma financial effects on the EPS would be as follows: Before the Proposed After the Proposed Number of Shares 223,447, ,447,985 Profits attributable to Shareholders (S$ 000) 6,495 6,495 EPS (Singapore cents) INTERESTS OF DIRECTORS AND SUBSTANTIAL SHAREHOLDERS Save as disclosed herein, none of the Directors or substantial Shareholders has any interest, direct or indirect, in the Proposed, other than through their respective shareholdings in the Company. 5. DOCUMENTS AVAILABLE FOR INSPECTION A copy of the Agreement will be made available for inspection during normal business hours at the Company s registered office address at 29 Tai Seng Avenue, #07-01, Natural Cool Lifestyle Hub, Singapore for a period of three (3) months commencing from the date of this announcement. By Order of the Board Leaw Wei Siang Company Secretary 20 October 2016 About Natural Cool Holdings Limited Established in 1989 and listed on Catalist (formerly known as SESDAQ) in May 2006, Natural Cool provides installation, maintenance, repair and replacement services for air-conditioning systems to the residential segment, both public and private; and commercial sectors, which include factories, offices, condominiums, schools and hospitals, in Singapore. In addition, the Group sells air-conditioning components and tools used for the installation and servicing of airconditioning business. 5