THIS CIRCULAR IS IMPORTANT AND REQUIRES YOUR IMMEDIATE ATTENTION.

Transcription

1 CIRCULAR DATED 14 JANUARY 2014 THIS CIRCULAR IS IMPORTANT AND REQUIRES YOUR IMMEDIATE ATTENTION. If you are in any doubt as to the action you should take, you should consult your stockbroker, bank manager, solicitor, accountant, tax adviser or other professional adviser immediately. If you have sold or transferred all your ordinary shares in the capital of NSL Ltd. ( NSL or the Company ), you should immediately forward this Circular together with the Notice of Extraordinary General Meeting and the accompanying Proxy Form to the purchaser or transferee or to the bank, stockbroker or other agent through whom the sale or transfer was effected for onward transmission to the purchaser or transferee. The Singapore Exchange Securities Trading Limited ( SGX-ST ) assumes no responsibility for the accuracy of any of the statements made, reports contained or opinions expressed in this Circular. NSL LTD. (Incorporated in Singapore) Company Registration No C CIRCULAR TO SHAREHOLDERS in relation to THE DISPOSAL OF NSL CHEMICALS (THAILAND) PTE. LTD. (NOW KNOWN AS C4 HOLDING PTE. LTD.) BY NSL CHEMICALS LTD. Financial Adviser to the Company Standard Chartered Bank IMPORTANT DATES AND TIMES Last date and time for lodgement of Proxy Form : 27 January 2014 at 2.00 p.m. (Singapore time) Date and time of Extraordinary General Meeting : 29 January 2014 at 2.00 p.m. (Singapore time) Place of Extraordinary General Meeting : Bridge Rooms 1, 2 and 3 Raffles Marina 10 Tuas West Drive Singapore

2 CONTENTS Page DEFINITIONS... 3 LETTER TO SHAREHOLDERS Introduction Information on NSCT Principal Terms of the Disposal Pro Forma Financial Effects Rationale and Use of Proceeds Disposal as a Major Transaction Voting Undertaking Material Litigation Interests of Directors and Substantial Shareholders Directors Recommendation Extraordinary General Meeting Action to be taken by Shareholders Responsibility Statements Consent Documents for Inspection NOTICE OF EXTRAORDINARY GENERAL MEETING PROXY FORM 2

3 DEFINITIONS For the purposes of this Circular, the following definitions apply throughout unless the context otherwise requires: 3Q2013 : The nine-month period ended 30 September Holdings : 98 Holdings Pte. Ltd. Agreement : The conditional share purchase agreement dated 17 November 2013 entered into between NSC and the Purchaser in connection with the Disposal, pursuant to which NSC agreed to sell, and the Purchaser agreed to purchase, the Sale Shares on the terms and subject to the conditions contained therein Agreement Date : 17 November 2013, being the date of the Agreement Audit Adjustment : Has the meaning given to it in paragraph 3.2(b) of this Circular Board : The board of Directors of the Company BST : Bangkok Synthetics Co., Ltd. CDP : The Central Depository (Pte) Limited Circular : This Circular to Shareholders dated 14 January 2014 Companies Act : The Companies Act, Chapter 50 of Singapore Completion : The completion of the Disposal Completion Date : 3 December 2013, being the date of Completion, as mutually agreed in writing between NSC and the Purchaser Conditions : The conditions precedent to the Disposal Consideration : The aggregate purchase consideration for the Sale Shares Contingent Consideration Amounts : Has the meaning given to it in paragraph 3.2(c) of this Circular Directors : The directors of the Company for the time being Disposal : The disposal of the Sale Shares by NSC to the Purchaser on the terms and subject to the conditions contained in the Agreement EGM : The extraordinary general meeting of the Company to be held on 29 January 2014 (and any adjournment thereof), notice of which is given on page 17 of this Circular Encumbrance : Any claim, charge, mortgage, lien, option, equity, power of sale, hypothecation, retention of title, right of pre-emption, right of first refusal or other third party right or security interest of any kind or an agreement, arrangement or obligation to create any of the foregoing 3

4 DEFINITIONS EPS : Earnings per share FY : Financial year ended or ending, as the case may be, 31 December Initial Contingent Consideration Amount : Has the meaning given to it in paragraph 3.2(c) of this Circular Insurance Claim Period : The period between 1 October 2013 and 31 December 2017 (both dates inclusive), or such shorter period as mutually agreed by the Purchaser and NSC in writing Insurance Claim Proceeds : Any proceeds received by BST and/or its subsidiaries pursuant to any insurance claims made in relation to the fire incident which occurred at facilities of BST and its subsidiaries in Maptaphut Industrial Estate in Rayong on 5 May 2012 and impacted the butadiene, styrene butadiene rubber and butadiene rubber facilities and operations of BST and its subsidiaries and resultant loss of profits Latest Practicable Date : The latest practicable date prior to the printing of this Circular, being 8 January 2014 Listing Manual : The Listing Manual of the SGX-ST NAV : Net asset value NSC : NSL Chemicals Ltd., a wholly-owned subsidiary of the Company NSCT : NSL Chemicals (Thailand) Pte. Ltd. (which is now known as C4 Holding Pte. Ltd.) NSCT Share : Approximately per cent. NSL or Company : NSL Ltd. NSL Group : NSL and its subsidiaries NTA : Net tangible assets Purchaser : SCG Chemicals Co., Ltd. Sale Shares : The entire issued and paid-up share capital of NSCT comprising 7,170,000 ordinary shares as at the Completion Date SCB : Standard Chartered Bank Securities Account : A securities account maintained by a Depositor with CDP, but not including a securities sub-account SGD Upfront Consideration Amount : Has the meaning given to it in paragraph 1.3 of this Circular SGX-ST : Singapore Exchange Securities Trading Limited 4

5 DEFINITIONS SGX Waiver : The waiver granted by SGX-ST on 26 November 2013 to the Company from the requirement to obtain Shareholders approval prior to completion of the Disposal and that the Company may instead seek Shareholders ratification of the Disposal Shares : Ordinary shares in the capital of the Company Shareholders : The registered holders of Shares, except that where the registered holder is CDP, the term Shareholders shall, in relation to those Shares, mean the Depositors whose Securities Accounts are credited with Shares Substantial Shareholder : A person who, in accordance with the Securities and Futures Act, Chapter 289 of Singapore, has an interest in not less than five (5) per cent. of the issued voting Shares of the Company Updated Contingent Consideration Amount : Has the meaning given to it in paragraph 3.2(c) of this Circular Upfront Consideration Amount : Has the meaning given to it in paragraph 1.3 of this Circular S$, cents or Singapore Dollars : The lawful currency for the time being of the Republic of Singapore Bt or Thai Baht : The lawful currency for the time being of Thailand % or per cent. : Per centum or percentage The terms Depositor and Depository Register shall have the meanings ascribed to them respectively in Section 130A of the Companies Act. The term controlling shareholder shall have the meaning ascribed to it in the Listing Manual. The term subsidiaries shall have the meaning ascribed to it in Section 5 of the Companies Act. Words importing the singular shall, where applicable, include the plural and vice versa. Words importing the masculine gender shall, where applicable, include the feminine and neuter genders. References to persons shall include corporations. Any reference in this Circular to any enactment is a reference to that enactment as for the time being amended or re-enacted. Any word defined under the Companies Act or any statutory modification thereof and not otherwise defined in this Circular shall have the same meaning assigned to it under the Companies Act or any statutory modification thereof, as the case may be. Any reference to a time of day in this Circular is made by reference to Singapore time unless otherwise stated. Certain exchange rates stated herein are for reference only. No representation is made by the Company that any amount in Thai Baht has been, could have been or could be converted at the stipulated rates or at any other rates or at all. 5

6 NSL LTD. (Incorporated in Singapore) Company Registration No C Directors Prof Cham Tao Soon (Non-Executive Chairman, Independent) Mr Oo Soon Hee (Executive Director) Mr Ban Song Long (Non-Executive Director) Mr John Koh Tiong Lu (Independent Director) Mr David Fu Kuo Chen (Non-Executive Director) Dr Tan Tat Wai (Independent Director) Registered Office 77 Robinson Road #27-00 Robinson 77 Singapore January 2014 To: The Shareholders of NSL Ltd. Dear Sir/Madam THE DISPOSAL OF NSL CHEMICALS (THAILAND) PTE. LTD. (NOW KNOWN AS C4 HOLDING PTE. LTD.) BY NSL CHEMICALS LTD. 1. INTRODUCTION 1.1 Disposal. On 17 November 2013, the Company announced that NSL Chemicals Ltd. ( NSC ), a wholly-owned subsidiary of the Company, had entered into a conditional share purchase agreement (the Agreement ) with SCG Chemicals Co., Ltd. (the Purchaser ), a wholly-owned subsidiary of The Siam Cement Public Company Limited, pursuant to which NSC agreed to sell and the Purchaser agreed to purchase the entire issued and paid-up share capital of NSL Chemicals (Thailand) Pte. Ltd. (which is now known as C4 Holding Pte. Ltd.) ( NSCT ) (the Disposal ). Standard Chartered Bank ( SCB ) was appointed as the financial adviser to the Company in respect of the Disposal. 1.2 Information on NSCT. Prior to Completion, NSCT was a wholly-owned subsidiary of NSC. Further information on NSCT is set out in paragraph 2 of this Circular. 1.3 Completion. On 3 December 2013, the Company announced that the Disposal had been completed. Pursuant to the terms of the Agreement and as mutually agreed in writing between NSC and the Purchaser, the Purchaser had, on Completion, as directed by NSC, paid to the Company an amount in cash of S$311,216, (equivalent to Bt8,027,841,646 (the Upfront Consideration Amount ) based on an agreed exchange rate of S$1.00 : Bt25.795) (the SGD Upfront Consideration Amount ). Following Completion, NSC no longer holds any interest in NSCT, and NSCT has ceased to be a subsidiary and a member of the NSL Group. In accordance with the terms of the Agreement, with effect from the Completion Date, NSCT has changed its name to C4 Holding Pte. Ltd. 1.4 Circular. The purpose of this Circular is to provide Shareholders with relevant information relating to the Disposal, the rationale and the pro forma financial effects of the Disposal on the NSL Group, and to seek Shareholders ratification of the matters relating to the Disposal set out in the Ordinary Resolution to be proposed at the EGM, notice of which is set out on page 17 of this Circular. 6

7 2. INFORMATION ON NSCT 2.1 NSCT. Prior to Completion, NSCT was a wholly-owned subsidiary of NSC, a wholly-owned subsidiary of the Company. NSCT is incorporated in the Republic of Singapore with 7,170,000 ordinary shares in issue (the Sale Shares ) as at the Completion Date. As at the Completion Date: (a) NSCT is an investment holding company and is the legal and beneficial owner of 2,678,346 ordinary shares of par value Bt100 each of BST, representing approximately per cent. (the NSCT Share ) of the issued share capital of BST; and (b) BST is an integrated chemicals producer with operations in Thailand and is engaged in the manufacturing of Butadiene, Butene - 1, Styrene Butadiene Rubber and related products. The shareholders of BST include, inter alia, NSCT and the Purchaser. 2.2 Net Asset Value. Based on the unaudited consolidated financial statements of the NSL Group for 3Q2013, the NAV of NSCT as at 30 September 2013 was approximately S$205.6 million. The main asset of NSCT is its investment holding in BST and accordingly, the value of NSCT primarily comprises the value of a minority shareholding in BST, a closely held private company. No independent valuation was commissioned by the Company as prior to the Disposal: (a) (b) (c) the Company (through NSCT) was a long term shareholder of BST; the Company was familiar with BST and its financial performance and it was also aware of past discussions on potential sales of various shareholdings in BST; and the Company had received financial advice from SCB. No introducer was also involved in the Disposal given that both NSCT and the Purchaser were existing shareholders of BST. 2.3 Net Profit. Based on the unaudited consolidated financial statements of the NSL Group for 3Q2013, the net profit before income tax, minority interests and exceptional items for NSCT for 3Q2013 was approximately S$11.5 million. The realised gain on disposal pursuant to the Disposal is approximately S$ million. 3. PRINCIPAL TERMS OF THE DISPOSAL 3.1 Agreement. Pursuant to the terms of the Agreement, on Completion, NSC shall sell and the Purchaser shall purchase the Sale Shares, representing the entire issued and paid-up share capital of NSCT, free from Encumbrances, and together with (a) from the Agreement Date, only the right to receive all dividends or distributions declared, made or paid by BST on or after the Agreement Date and (b) from the Completion Date, all other rights and advantages attaching to them as at the Completion Date. 3.2 Consideration. (a) Amount. The aggregate purchase consideration for the Sale Shares (the Consideration ) shall be an amount in cash equal to the sum of (i) the Upfront Consideration Amount which is subject to the Audit Adjustment and (ii) any Contingent Consideration Amounts. The Consideration was arrived at on a willing buyer willing seller basis after taking into account, inter alia, the earnings, financial position, track record and the book value of the BST group as at 30 September 2013, and the nature of a minority investment in a private company. 7

8 (b) Upfront Consideration Amount. As mutually agreed in writing between NSC and the Purchaser on the Completion Date, the SGD Upfront Consideration, which is equivalent to the Upfront Consideration Amount in Singapore Dollars at an agreed exchange rate of S$1.00 : Bt25.795, was fully paid by the Purchaser to the Company, as directed by NSC, in cash on the Completion Date. Following Completion, the Upfront Consideration Amount is subject to adjustment based on (i) the audited consolidated balance sheet of BST as at 30 September 2013 prepared in accordance with the terms of the Agreement and (ii) the amount of residual net assets of NSCT (after excluding NSCT s investment in BST) as set out in the net asset statement of NSCT to be prepared by NSC as soon as practicable following Completion in accordance with the terms of the Agreement (collectively, the Audit Adjustment ). (c) Contingent Consideration Amounts. As and when the Purchaser becomes aware (such date(s) when the Purchaser becomes aware, being the Relevant Date(s) ) of a receipt by BST and/or its subsidiaries of the payment of any Insurance Claim Proceeds during the Insurance Claim Period, then within 30 calendar days of each Relevant Date, the Purchaser shall pay to NSC an amount in cash equivalent to the NSCT Share of any Insurance Claim Proceeds received by BST and/or its subsidiaries during the Insurance Claim Period (net of the NSCT Share of any tax which may be payable by BST and/or its subsidiaries in respect of the corresponding Insurance Claim Proceeds to any tax authority ( Applicable Tax )) in respect of such Insurance Claim Proceeds (the Contingent Consideration Amount ). From the commencement of the Insurance Claim Period to the Agreement Date, BST had received Insurance Claim Proceeds (net of estimated Applicable Tax) amounting to approximately Bt1,280.0 million. Accordingly, as at the Agreement Date, the Contingent Consideration Amount payable by the Purchaser to NSC was approximately Bt292.3 million in cash (the Initial Contingent Consideration Amount ). Subsequent to the Agreement Date, BST had received additional Insurance Claim Proceeds (net of estimated Applicable Tax) of approximately Bt million. As at the Latest Practicable Date, the aggregate Insurance Claim Proceeds (net of estimated Applicable Tax) received by BST since the commencement of the Insurance Claim Period is approximately Bt 1,960.6 million. Accordingly, as at the Latest Practicable Date, the aggregate Contingent Consideration Amount (inclusive of the Initial Contingent Consideration Amount) paid by the Purchaser, as directed by NSC, to the Company is approximately Bt million (approximately S$ 17.4 million based on realized exchange rate of S$ 1.00 : Bt ) in cash (the Updated Contingent Consideration Amount ). For the avoidance of doubt, NSC shall be entitled to receive further Contingent Consideration Amounts in accordance with the terms of the Agreement until the end of the Insurance Claim Period if there are further Insurance Claim Proceeds received by BST and/or its subsidiaries. 3.3 Top-Up Compensation. Pursuant to the terms of the Agreement, in the event that the Purchaser increases or agrees to increase, directly or indirectly, its interest in BST at any time during the 12-month period following the Agreement Date (a Follow-On Transaction ) at a valuation which is higher than an agreed valuation between NSC and the Purchaser, then an amount in cash equal to the NSCT Share of the difference between the valuation for the Follow-On Transaction and such agreed valuation between NSC and the Purchaser shall be paid by the Purchaser to NSC (or to such person as NSC may direct). 3.4 Conditions Precedent. Pursuant to the terms of the Agreement, Completion was subject to and conditional upon the satisfaction and/or waiver (as the case may be) of the Conditions set out below: (a) a resolution of Shareholders passed at the EGM approving the transactions contemplated by the Agreement for the purposes of, and in accordance with, the requirements of Chapter 10 of the Listing Manual; 8

9 (b) (c) (d) the warranties and representations given by NSC as set out in the Agreement remaining true and accurate in all material respects as at Completion; no material breach by NSC of its pre-completion undertakings under the Agreement; and no injunction or other order issued by any court of competent jurisdiction or other legal restraint or prohibition preventing the sale of the Sale Shares by NSC to the Purchaser shall be in effect on Completion. Following the receipt of the SGX Waiver by the Company, details of which are set out in paragraph 6.3 of this Circular, on 3 December 2013, NSC waived the Condition set out in paragraph 3.4(a) of this Circular. All the Conditions were thereafter satisfied or waived and Completion took place on 3 December PRO FORMA FINANCIAL EFFECTS 4.1 Bases and Assumptions. The pro forma financial effects for the Disposal have been prepared based on the audited consolidated financial statements of the NSL Group for FY2012 and are purely for illustration purposes only and do not reflect the future actual financial position of the NSL Group following Completion. The pro forma financial effects have also been prepared based on, inter alia, the following assumptions: (a) (b) (c) (d) the Disposal had been effected on 31 December 2012, being the end of the most recently completed financial year of the NSL Group, for illustrating the financial effects on the consolidated NTA of the NSL Group; the Disposal had been effected on 1 January 2012, being the beginning of the most recently completed financial year of the NSL Group, for illustrating the financial effects on the consolidated earnings of the NSL Group; the Consideration is illustrated based on the aggregate of the SGD Upfront Consideration Amount and the Updated Contingent Consideration Amount, which is S$ million. This does not include the Audit Adjustment (if any) and any further Contingent Consideration Amounts which may be received by NSC if there are further Insurance Claim Proceeds received by BST and/or its subsidiaries from the Latest Practicable Date until the end of the Insurance Claim Period; and the transaction costs associated with the Disposal are assumed to be S$3. 8 million. 4.2 NTA. For illustrative purposes only and assuming the Disposal had been completed on 31 December 2012, the pro forma financial effects on the consolidated NTA of the NSL Group for FY2012 are set out below. The NTA is determined by the consolidated NAV of the NSL Group less the intangible assets of the NSL Group. Before the Disposal After the Disposal (1) NTA (S$ million) No. of issued Shares (million) NTA per Share (S$) Note: (1) The pro forma effects with respect to the Disposal have been illustrated after taking into account the net gain on disposal (after deducting the estimated transaction costs of S$3. 8 million). 9

10 4.3 EPS. For illustrative purposes only and assuming the Disposal had been completed on 1 January 2012, the pro forma financial effects on the consolidated earnings of the NSL Group for FY2012 are as follows: Before the Disposal After the Disposal (1) Net profit attributable to Shareholders (S$ million) No. of issued Shares (million) Basic EPS (2) ( cents) Notes: (1) The pro forma effects with respect to the Disposal have been illustrated after taking into account the deconsolidation of the NSCT results, the net gain on disposal (after deducting the estimated transaction costs of S$3. 8 million) and the after-tax interest income from the proceeds of the Disposal at the rate of 0.75% per annum. (2) The calculation of basic EPS is based on the net profit attributable to Shareholders divided by the number of issued Shares. 5. RATIONALE AND USE OF PROCEEDS 5.1 Rationale. The Board and management of the Company are continuously evaluating the long-term growth strategy for each of its portfolio businesses. This process includes assessing organic growth opportunities as well as value-accretive transactions. The long term strategic investment into BST was originally made as part of the NSL Group s efforts to grow its chemicals division and the Company has participated in BST s success over the last 20 years. In recent years, BST has undertaken a significant downstream investment plan and may continue to invest in new projects for the next stage of its development. The petrochemical industry is cyclical and capital intensive, and projects require a long investment horizon. In addition, BST is now no longer part of the Company s core strategy and as a result it is now in the best interests of the Company to divest this investment. The Disposal will allow the Company to better align its strategy to develop and grow its four core businesses - Construction Products, Environmental Services, Engineering and Chemicals. The Disposal has generated gross cash proceeds of S$311.2 million based on the SGD Upfront Consideration Amount, with an additional S$ 17.4 million received as the Updated Contingent Consideration Amount. Based on the NSL Group s carrying value in NSCT as of 30 September 2013, the Disposal will result in an estimated accounting gain of S$ million to the Company. The excess of the gross cash proceeds of S$ million (being the aggregate of the SGD Upfront Consideration Amount and the Updated Contingent Consideration Amount) received by the Company (as directed by NSC) pursuant to the Disposal over the NAV of NSCT as set out in paragraph 2.2 of this Circular is S$ million. 5.2 Use of Proceeds. The Board and management of the Company will continue to evaluate opportunities to use the proceeds received from the Disposal to maximize returns for Shareholders. The Company shall announce the use of the proceeds from the Disposal as and when such funds are materially disbursed. 10

11 6. DISPOSAL AS A MAJOR TRANSACTION 6.1 Major Transaction. The relative figures in relation to the Disposal computed on the applicable bases set out in Rule 1006 of the Listing Manual ( Rule 1006 ) are as follows: Rule 1006 Bases (a) (b) (c) Disposal (S$ million) NSL Group (S$ million) Relative Figures (%) NAV of NSCT compared with the NSL Group s NAV (1) NSCT s net profit compared with the NSL Group s net profit (1)(2) Estimated Consideration (3) compared with the Company s market capitalisation (4) Notes: (1) Based on the unaudited consolidated financial statements of the NSL Group for 3Q2013. (2) Net profit is defined as profit before income tax, minority interests and exceptional items. (3) The estimated Consideration is deemed to be the aggregate of the Upfront Consideration Amount and the Initial Contingent Consideration Amount, which is S$328.3 million based on an exchange rate of S$1.00 : Bt25.34 as of 15 November This does not include the Audit Adjustment (if any) and any further Contingent Consideration Amounts which may be received by NSC if there are further Insurance Claim Proceeds received by BST and/or its subsidiaries from the Agreement Date until the end of the Insurance Claim Period (if any). (4) The market capitalisation of the Company is based upon 373,558,237 Shares in issue at a volume weighted average price of S$1.44 for each Share as at 15 November 2013, being the last full market day preceding the Agreement Date. As the relative figures under Rules 1006(a), (b) and (c) all exceed 20 per cent., the Disposal constitutes a major transaction for the Company as defined in Chapter 10 of the Listing Manual, which, in the absence of the SGX Waiver, would have been subject to the approval of Shareholders. 6.2 Grounds for SGX Waiver of Rule 1014(2). The Company had on 21 November 2013 applied to the SGX-ST to seek the SGX-ST s confirmation either that (i) notwithstanding that the relative figures for the Disposal as set out in paragraph 6.1 of this Circular exceed 20 per cent., the approval of the Shareholders at an EGM for the Disposal should not be required under Rule 1014 of the Listing Manual or (ii) in the alternative, the prior approval of the Shareholders for the Disposal is not required and that the Company may instead seek the Shareholders approval to ratify the Disposal. The Company s application to the SGX-ST was made on the following grounds: (a) the Company s interest in BST, through its indirect wholly-owned subsidiary, NSCT, is less than 30 per cent., is not consolidated by the Company in its financial results and is only accounted for as an associated company. In recent years, BST has undertaken a significant downstream investment plan and may continue to invest in new projects for the next stage of its development. The Company has and will have limited influence as a shareholder in BST s decision making process on such investment plans, which may place its investment in BST at risk. Further, as BST is no longer part of the Company s core strategy, it is and would therefore be in the best interests of the Company to, through the Disposal, divest its interest in BST; 11

12 (b) the Board is of the view that the Disposal will significantly reduce the risk profile of the Company: (1) as illustrated below, BST s earnings contribution has been volatile which has consequently resulted in significant volatility in the Company s financial performance. This is to be expected given the unpredictable nature of the business of BST and its dependence on underlying commodity prices: FY2008 FY2009 FY2010 FY2011 FY2012 3Q2013 Income from associates attributable to BST (S$ million) (1) Deferred tax (S$ million) (1) (5.1) (2.1) (4.2) (8.3) (1.3) (1.1) Income from associates attributable to BST (net of deferred tax) (S$ million) Note: (1) Based on audited consolidated financial statements of the NSL Group for FY2008 to FY2012 and unaudited consolidated financial statements of the NSL Group for 3Q2013. (2) BST has historically paid relatively low dividends in comparison to its underlying cash generation, which has led to substantial cash accumulation within BST. With its limited influence as a shareholder in the management of BST, the Company does not have any ability to control the dividend policy of BST, including the declaration of any dividends by BST; and (3) the Disposal enables the monetisation of this volatile monetary investment and will return significant cash proceeds to the Company. The Disposal will generate gross cash proceeds of at least S$328.3 million 1 based on the Upfront Consideration Amount and the Initial Contingent Consideration Amount, and will result in an estimated accounting gain of S$119.8 million 1 to the Company, based on the NSL Group s carrying value in NSCT as at 30 September 2013; (c) with significant volatility in regional currencies (including the Thai Baht) resulting from ongoing concerns over the US Federal Reserve s tapering of its quantitative easing measures, as the Consideration and the payment of any Consideration is/will be denominated in Thai Baht, the timely completion of the Disposal would allow the Company to, in the interests of all Shareholders, minimise any erosion to the Consideration by reducing its exposure to any currency fluctuations in the Thai Baht, as well as managing any hedging costs. As an illustration, during the period commencing on 1 November 2013 and ending on 21 November 2013, the Thai Baht has weakened against the Singapore dollar by approximately 1.5 per cent. 2, translating into a potential reduction of the Consideration of approximately S$4.9 million 2 (after conversion of the Thai Baht equivalent of the aggregate of the Upfront Consideration Amount and the Initial Contingent Consideration Amount into Singapore Dollars). The timely completion of the Disposal would also allow management to receive and deploy the proceeds of the Disposal at the earliest opportunity to the benefit of all Shareholders; and 1 S$ equivalent of Bt amounts based on an exchange rate of S$1.00 : Bt25.34 as at 15 November 2013, being the last trading day prior to the Agreement Date. 2 Based on an exchange rate of S$1.00 : Bt25.10 as at 1 November 2013 and S$1.00 : Bt25.47 as at 21 November 2013, being the date of the application made to the SGX-ST. 12

13 (d) the majority Shareholder has already given an undertaking to approve the Disposal. 98 Holdings Pte. Ltd. ( 98 Holdings ), who holds a direct per cent. interest in the Company, will be, in accordance with the voting undertaking given by 98 Holdings on 15 November 2013, voting all of its Shares in favour of the Disposal. As 98 Holdings holds a clear majority of the Shares, the resolution to approve the Disposal will be approved by the Shareholders. However, if required to hold an EGM to ratify the Disposal, minority Shareholders would also not be prejudiced as they would be afforded the opportunity to raise questions and express their views at the EGM to ratify the Disposal. 6.3 Conditions for SGX Waiver. Following the Company s application, the SGX-ST confirmed on 26 November 2013 that it had no objections in granting the Company a waiver from compliance with Rule 1014(2) of the Listing Manual for the Disposal, subject to the following conditions: (a) (b) (c) (d) the Company announcing the SGX Waiver, the reasons seeking the SGX Waiver and the conditions as required under Rule 107 of the Listing Manual; a shareholders meeting being held by the Company to ratify the Disposal; submission of a written undertaking from the controlling shareholder, 98 Holdings, to vote in favour of the ratification of the Disposal at the EGM to be convened (the 98 Holdings Undertaking ); and submission of a written confirmation from the Company that the SGX Waiver does not contravene any laws and regulations governing the Company and the articles of association of the Company (the Company Undertaking ). In satisfaction of the conditions of the SGX Waiver: (i) (ii) (iii) (iv) the Company had on 26 November 2013 announced the SGX Waiver, the reasons for seeking the SGX Waiver and the conditions attached to the SGX Waiver. The grounds for seeking the SGX Waiver have also been disclosed in paragraph 6.2 of this Circular; the Company will be convening the EGM to seek Shareholders ratification of the Disposal on 29 January 2014; a copy of the 98 Holdings Undertaking has been provided to the SGX-ST; and the Company has submitted the Company Undertaking to the SGX-ST. 7. VOTING UNDERTAKING As at the Latest Practicable Date, 98 Holdings, the controlling shareholder of the Company, holds 303,484,453 Shares, representing approximately per cent. of the total number of Shares in issue. 98 Holdings had, on 28 November 2013, provided an undertaking to the Company that it will, inter alia, vote in favour of any resolutions to be proposed at the EGM to ratify the Disposal. 8. MATERIAL LITIGATION As at the Latest Practicable Date, the Directors are not aware of any litigation, claims or proceedings pending or threatened against the Company or any of its subsidiaries or any facts likely to give rise to any litigation, claims or proceedings which, in the opinion of the Directors, might materially and adversely affect the financial position of the Company and its subsidiaries taken as a whole. 13

14 9. INTERESTS OF DIRECTORS AND SUBSTANTIAL SHAREHOLDERS Save as disclosed in paragraph 7 of this Circular and below, none of the Directors or the Substantial Shareholders has any interest, direct or indirect, in the Disposal. 9.1 Directors. Based on the Company s Register of Directors Shareholdings as at the Latest Practicable Date, save as disclosed below, the Directors do not hold any interests, direct or deemed, in the Shares. Direct Interest Deemed Interest Total Interest Director Number Number Number of Shares % (1) of Shares % (1) of Shares % (1) Prof Cham Tao Soon (2) ,000 n.m. (3) 10,000 n.m. (3) Notes: (1) Percentage shareholding interest is based on 373,558,237 issued Shares (none of which are treasury shares) as at the Latest Practicable Date. (2) Prof Cham Tao Soon is deemed to have an interest in the Shares held by his spouse. (3) n.m. means not meaningful. Mr Oo Soon Hee, the Executive Director of the Company, is also a director of NSC. Prior to the Completion Date, Mr Oo Soon Hee was a director of each of BST and its subsidiaries, BST Elastomers Co., Ltd and BST Specialty Co., Ltd. Mr David Fu Kuo Chen, a director of the Company, was a director of each of BST and BST Elastomers Co., Ltd. With effect from the Completion Date, Mr Oo Soon Hee has resigned from his office as a director of each of BST, BST Elastomers Co., Ltd and BST Specialty Co., Ltd and Mr David Fu Kuo Chen has resigned from his office as a director of each of BST and BST Elastomers Co., Ltd. 9.2 Substantial Shareholders. The interests of the Substantial Shareholders in the Shares as recorded in the Company s Register of Substantial Shareholders as at the Latest Practicable Date are set out below: Substantial Shareholders Direct Interest Deemed Interest Total Interest Number Number Number of Shares % (1) of Shares % (1) of Shares % (1) 98 Holdings 303,484, ,484, Mr Ong Beng Seng (2) ,484, ,484, Excel Partners Pte. Ltd. (2) ,484, ,484, Excelfin Pte Ltd (2) ,484, ,484, Y.S. Fu Holdings (2002) ,484, ,484, Pte. Ltd. (3) Reef Holdings Pte Ltd (2) ,484, ,484, Reef Investments Pte Ltd (2) ,484, ,484, Notes: (1) Percentage shareholding interest is based on 373,558,237 issued Shares (none of which are treasury shares) as at the Latest Practicable Date. (2) Mr Ong Beng Seng is deemed to have an interest through Reef Holdings Pte Ltd, which is deemed to have an interest through Reef Investments Pte Ltd, which is deemed to have an interest through Excelfin Pte Ltd and Excel Partners Pte. Ltd. Excelfin Pte Ltd is deemed to have an interest through Excel Partners Pte. Ltd., which is deemed to have an interest through its interest in 98 Holdings. (3) Y.S. Fu Holdings (2002) Pte. Ltd. is deemed to have an interest through Excel Partners Pte. Ltd., which is deemed to have an interest through its interest in 98 Holdings. 14

15 10. DIRECTORS RECOMMENDATION Having considered, inter alia, the terms, financial effects and rationale for the Disposal, and after discussions with the management of the Company, the Directors are of the opinion that the Disposal is in the interests of the Company and the Shareholders. Accordingly, the Directors recommend that Shareholders vote in favour of the Ordinary Resolution relating to the ratification of the Disposal (set out in the notice of EGM on page 17 of this Circular) to be proposed at the EGM to be held on 29 January EXTRAORDINARY GENERAL MEETING The EGM, notice (the Notice ) of which is set out on page 17 of this Circular, will be held at Bridge Rooms 1, 2 and 3, Raffles Marina, 10 Tuas West Drive, Singapore on 29 January 2014 at 2.00 p.m. for the purpose of considering and, if thought fit, passing with or without any modifications, the Ordinary Resolution set out in the Notice. A Depositor shall not be regarded as a Shareholder entitled to attend the EGM and to speak and vote thereat unless he is shown to have Shares entered against his name in the Depository Register, as certified by CDP as at 48 hours before the EGM. 12. ACTION TO BE TAKEN BY SHAREHOLDERS Shareholders will find enclosed with this Circular, the Notice and a Proxy Form. If a Shareholder is unable to attend the EGM and wishes to appoint a proxy to attend and vote on his behalf, he should complete, sign and return the attached Proxy Form in accordance with the instructions printed thereon as soon as possible and, in any event, so as to reach the registered office of the Company at 77 Robinson Road #27-00, Robinson 77, Singapore , not later than 2.00 p.m. on 27 January Completion and return of the Proxy Form by a Shareholder will not prevent him from attending and voting at the EGM if he so wishes. 13. RESPONSIBILITY STATEMENTS 13.1 Directors. The Directors collectively and individually accept full responsibility for the accuracy of the information given in this Circular and confirm after making all reasonable enquiries that, to the best of their knowledge and belief, this Circular constitutes full and true disclosure of all material facts about the Disposal and the NSL Group, and the Directors are not aware of any facts the omission of which would make any statement in this Circular misleading. Where information in this Circular has been extracted from published or otherwise publicly available sources or obtained from a named source, the sole responsibility of the Directors has been to ensure that such information has been accurately and correctly extracted from those sources and/ or reproduced in this Circular in its proper form and context Financial Adviser. To the best of SCB s knowledge and belief, this Circular constitutes full and true disclosure of all material facts about the Disposal and the NSL Group, and it is not aware of any facts the omission of which would make any statement in this Circular misleading. 14. CONSENT SCB has given and has not withdrawn its written consent to the inclusion within this Circular of references to its name in the form and context in which it appears in this Circular. 15

16 15. DOCUMENTS FOR INSPECTION Copies of the following documents are available for inspection at the registered office of the Company at 77 Robinson Road #27-00, Robinson 77, Singapore , during normal business hours from the date of this Circular up to and including the date of the EGM: (a) (b) (c) the Memorandum and Articles of Association of the Company; the annual reports of the Company for FY2010, FY2011 and FY2012 and the unaudited consolidated financial statements of the NSL Group for 3Q2013; and the Agreement. Yours faithfully For and on behalf of the Board of Directors of NSL LTD. Prof Cham Tao Soon Chairman 16

17 NOTICE OF EXTRAORDINARY GENERAL MEETING NSL LTD. (Incorporated in Singapore) Company Registration No C NOTICE OF EXTRAORDINARY GENERAL MEETING NOTICE IS HEREBY GIVEN that an Extraordinary General Meeting of NSL Ltd. (the Company ) will be held at Bridge Rooms 1, 2 and 3, Raffles Marina, 10 Tuas West Drive, Singapore on 29 January 2014 at 2.00 p.m. for the purpose of considering and, if thought fit, passing with or without amendment, the following resolution: Ordinary Resolution Ratification of the Disposal of NSL Chemicals (Thailand) Pte. Ltd. (now known as C4 Holding Pte. Ltd.) by NSL Chemicals Ltd. That: (a) (b) (c) the disposal (the Disposal ) by NSL Chemicals Ltd. ( NSC ), a wholly-owned subsidiary of the Company, of the entire issued and paid-up share capital of NSL Chemicals (Thailand) Pte. Ltd. (now known as C4 Holding Pte. Ltd.), comprising 7,170,000 ordinary shares, to SCG Chemicals Co., Ltd. (the Purchaser ), on the terms and conditions set out in the share purchase agreement dated 17 November 2013 entered into between NSC and the Purchaser (the Agreement ), be and is hereby approved, confirmed and ratified; any acts, matters and things done or performed, and/or documents signed, executed, sealed and/ or delivered by any one of the Directors in connection with the Disposal, the Agreement and this Ordinary Resolution be and are hereby approved, confirmed and ratified; and the Directors of the Company and each of them be and are hereby authorised to complete and do all such acts and things (including, but not limited to, executing all such documents as may be required in connection with this Ordinary Resolution and the Disposal) as they or he may consider desirable, necessary or expedient in the interests of the Company to give full effect to this Ordinary Resolution and the Disposal. By Order of the Board Lim Su-Ling (Ms) Company Secretary Singapore 14 January 2014 Notes: 1. A member of the Company entitled to attend and vote at the Extraordinary Ordinary Meeting is entitled to appoint not more than two proxies to attend and vote in his stead. 2. A member of the Company which is a corporation is entitled to appoint its authorised representative or proxy to vote on its behalf. 3. A proxy need not be a member of the Company. 4. The instrument appointing a proxy must be deposited at the registered office of the Company at 77 Robinson Road #27-00, Robinson 77, Singapore , not less than 48 hours before the time set for holding the Extraordinary General Meeting. 17

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19 NSL LTD. (Incorporated in Singapore) (Co. Reg. No C) PROXY FORM EXTRAORDINARY GENERAL MEETING IMPORTANT 1. For investors who have used their Central Provident Fund ( CPF ) moneys to buy shares in the capital of NSL LTD., this Circular is sent to them at the request of their CPF Approved Nominees and is sent solely FOR INFORMATION ONLY. 2. This Proxy Form is not valid for use by CPF investors and shall be ineffective for all intents and purposes if used or purported to be used by them. 3. CPF investors who wish to attend the Extraordinary General Meeting as observers should register with their respective CPF Agent Banks who must submit their requests to the Company not later than 48 hours before the time set for the Meeting. I/We (Name) of (Address) being a member/members of NSL LTD. (the Company ), hereby appoint the Chairman of the Meeting (Note 2): Name Address NRIC/ Passport No. Proportion of Shareholdings (%) and/or (delete as appropriate) Name Address NRIC/ Passport No. Proportion of Shareholdings (%) as my/our proxy/proxies to attend and to vote for me/us on my/our behalf and, if necessary, to demand a poll, at the Extraordinary General Meeting of the Company (the Meeting ) to be held at Bridge Rooms 1, 2 and 3, Raffles Marina, 10 Tuas West Drive, Singapore on 29 January 2014 at 2.00 p.m. and at any adjournment thereof. (Please indicate with an X in the spaces provided whether you wish your vote(s) to be cast FOR or AGAINST the Ordinary Resolution as set out in the Notice of the Meeting. In the absence of specific directions, the proxy/proxies will vote or abstain as he/they may think fit, as he/they will on any other matter arising at the Meeting). ORDINARY RESOLUTION FOR AGAINST Ratification of the Disposal of NSL Chemicals (Thailand) Pte. Ltd. (now known as C4 Holding Pte. Ltd.) by NSL Chemicals Ltd. Dated this day of Total number of Shares held Signature(s) of Member(s)/Common Seal IMPORTANT: PLEASE READ NOTES OVERLEAF

20 Notes: 1. Please insert the total number of shares held by you. If you have shares entered against your name in the Depository Register (as defined in Section 130A of the Companies Act, Chapter 50 of Singapore), you should insert that number. If you have shares registered in your name in the Register of Members of NSL LTD. (the Company ), you should insert that number. If you have shares entered against your name in the Depository Register and registered in your name in the Register of Members, you should insert the aggregate number. If no number is inserted, this form of proxy will be deemed to relate to all the shares held by you. 2. A member of the Company entitled to attend and vote at a meeting of the Company is entitled to appoint one or two proxies to attend and vote on his behalf. Such proxy need not be a member of the Company. If any other proxy is to be appointed, please strike out Chairman of the Meeting and insert the name(s) and particulars of the proxy or proxies to be appointed in the box provided. 3. If the Chairman of the Meeting is appointed as proxy, this instrument appointing a proxy or proxies shall be deemed to confer on him the right to nominate a person to vote on his behalf on a show of hands. 4. Where a member appoints more than one proxy, the appointments shall be invalid unless he specifies the proportion of his holding to be represented by each proxy. 5. Completion and return of this instrument appointing a proxy shall not preclude a member from attending and voting at the Meeting. Any appointment of a proxy or proxies shall be deemed to be revoked if a member attends the Meeting in person, and in such event, the Company reserves the right to refuse to admit any person or persons appointed under the instrument of proxy, to the Meeting. 6. The instrument appointing a proxy or proxies must be deposited at the Company s registered office at 77 Robinson Road, #27-00, Robinson 77, Singapore not less than 48 hours before the time set for holding the Meeting. 7. The instrument appointing a proxy or proxies must be under the hand of the appointor or of his attorney duly authorised in writing. Where the instrument appointing a proxy or proxies is executed by a corporation, it must be executed either under its seal or under the hand of a director or an officer or attorney duly authorised. 8. A corporation which is a member may authorise by resolution of its directors or other governing body such person as it thinks fit to act as its representative at the Meeting, in accordance with Section 179 of the Companies Act, Chapter 50 of Singapore. 9. The Company shall be entitled to reject an instrument of proxy which is incomplete, improperly completed, illegible or where the true intentions of the appointor are not ascertainable from the instructions of the appointor specified on the instrument of proxy. In addition, in the case of shares entered in the Depository Register, the Company may reject an instrument of proxy if the member, being the appointor, is not shown to have shares entered against his name in the Depository Register as at 48 hours before the time appointed for holding the Meeting, as certified by The Central Depository (Pte) Limited to the Company.