ENRA GROUP BERHAD ( ENRA OR THE COMPANY ) [FORMERLY KNOWN AS PERDUREN (M) BERHAD]

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1 ENRA GROUP BERHAD ( ENRA OR THE COMPANY ) [FORMERLY KNOWN AS PERDUREN (M) BERHAD] - SHAREHOLDERS AGREEMENT ENTERED BETWEEN THE COMPANY S SUBSIDIARY, ENRA OIL & GAS SDN BHD (FORMERLY KNOWN AS RATUS NUSA SDN BHD) AND AWT INTERNATIONAL (DECOMMISSIONING) SDN BHD 1. INTRODUCTION Further to the announcements made on 21 September 2015, 20 November 2015 and 18 December 2015 pertaining to the Heads of Agreement entered between the Company and AWT International (Asia) Sdn Bhd, the Board of Directors of the Company ( Board ) is pleased to announce that ENRA Oil & Gas Sdn Bhd (formerly known as Ratus Nusa Sdn Bhd) (Company No U) of D3-U6-15, Block D3, Solaris Dutamas, No. 1 Jalan Dutamas 1, Kuala Lumpur ( EOGS ), a subsidiary of the Company and AWT International (Decommissioning) Sdn Bhd (Company No D) of Unit 30-01, Level 30, Tower A, Vertical Business Suite, Avenue 3, Bangsar South, No. 8, Jalan Kerinchi, Kuala Lumpur ("AWT") (hereinafter collectively referred to as the Parties or Party, as the context may permit) had, on 26 February 2016, entered into a Shareholders Agreement ( Agreement ) to collaborate on well, platform and field abandonment/decommissioning and brownfield rejuvenation projects with Petroliam Nasional Berhad ( Petronas ) or any Petronas affiliates or Malaysian Oil and Gas Operators ( Malaysian Opportunities ), subject to the terms and conditions as stipulated in the Agreement. The Parties propose to form or acquire a special purpose vehicle ( SPV ) to identify, source and/or secure the Malaysian Opportunities and to provide project management, technical engineering services and other technical support and all assets, machine, equipment and related services for the Malaysian and/or any operations outside Malaysia mutually agreed by the Parties whether via the Company or any other entity in which the Parties have equity interests ( Other Opportunities ). 2. INFORMATON ON EOGS AND AWT 2.1 EOGS EOGS was incorporated on 6 February 2015 and has an authorised share capital of RM5,000, divided into 5,000,000 ordinary shares of RM1.00 each, of which 1,000,000 ordinary shares have been issued and are fully paid. EOGS is principally engaged in the business of importing, exporting, leasing, trading, manufacturing, wholesaling, distributing, retailing, agency, stocking and dealership in all kind of industrial products, construction equipment and machineries, marine vessels, process and storage facilities, oil and gas product handling equipment and the provision of associated services, installation, commissioning, decommissioning, repair, maintenance, cleaning and enhancement services and provides advisory, consultancy, supervisory, skilled works and management services for relevant industries. 1

2 EOGS has been identified by the Company to be the party to enter into the Agreement with AWT for the matters set out in the Agreement. The Directors of EOGS are Dato Mazlin bin Md Junid, Dato Kamaluddin bin Abdullah, Encik Kamalukhair bin Abdullah and Mr Loh Chen Yook. 2.2 AWT AWT was incorporated on 6 February 2015 and has an authorised share capital of RM2.00 divided into 2 ordinary shares of RM1.00 each, of which 2 ordinary shares have been issued and are fully paid. AWT is principally engaged in the provision of engineering services associated with the development of oil, gas and alternative energy assets and possesses the know-how, capabilities and services, and business opportunities in respect thereof. AWT is the wholly owned subsidiary of AWT International (Asia) Sdn Bhd, which, in turn, is an indirect subsidiary of NauticAWT Limited, a company listed on the Catalist Board of the Singapore Exchange Securities Trading Limited, and has been identified by AWT International (Asia) Sdn Bhd to be the party to enter into the Agreement with EOGS for the matters set out in the Agreement. The Directors of AWT are Mr Andrew Leslie Fooks and Mr Mark Denis Sweetman. 3. SALIENT TERMS OF THE AGREEMENT 3.1 The Parties have mutually agreed to enter into the Agreement for the purpose of regulating their rights and duties and their relationship inter se the SPV and to the extent and in the manner hereinafter provided. 3.2 The Parties shall identify a suitable company incorporated under the laws of Malaysia as the agreed vehicle for the provision of project management, technical engineering services and other technical support and all assets, machine, equipment and related services for the Malaysian Opportunities and the Other Opportunities and to do such other things as may be reasonably ancillary thereto or agreed by the shareholders ( Business ) and procure that its authorised share capital shall be RM500, only comprising 500,000 ordinary shares of which RM100, only comprising 100,000 ordinary shares shall be issued and paid up based on their equity proportions within 30 days from the date of the Agreement or such other period mutually agreed by the Parties. The Parties agree that the name of the SPV shall subject to the approval of the Companies Commission of Malaysia, be ENRA NauticAWT Sdn Bhd or such other name as the Parties shall mutually agree. 2

3 3.3. The Parties agree that unless otherwise transferred by any of the Parties in accordance with the terms of the Agreement or unless agreed by all Parties in writing, it is the intention of the Parties that the respective shareholdings of the Parties in the SPV whether ordinary shares or any other classes, shall be as follows: Parties Percentage of Shareholdings No. of Ordinary Shares of RM1.00 each Consideration at Par Value (RM) EOGS 51% 51,000 51,000 AWT 49% 49,000 49,000 Unless otherwise agreed by all shareholders, all shares of whatever class held by them shall rank pari passu in all respects in such classes. 3.4 The Board shall consist of not less than 4 Directors. EOGS shall be entitled to nominate 3 persons while AWT shall be entitled to nominate 1 person as Directors of the SPV. Each Director will be authorised and empowered to make decisions on behalf of and to bind the shareholders which appointed him. 3.5 The shareholders shall each use all reasonable endeavours to procure a loan from a bank or other source and on such terms commercially beneficial or otherwise in accordance with the usual and standard terms offered to similar companies, to assist the SPV to raise the funds required for the conduct of the Business and each shareholder shall with all reasonable expedition take such action reasonably required of it for such purpose including providing any proportionate guarantee or security in relation thereto the bank or other lender. 3.6 Subject to all shareholders agreeing, the shareholders shall each from time to time lend the SPV such sums as the SPV requires over and above the loans from any third party proportionate to their respective shareholdings and on terms to be mutually agreed between the shareholders and the SPV. 3.7 AWT acknowledges and agrees that EOGS and/or any of its related corporation may at any time, undertake pre-commissioning, commissioning and/or de-commissioning businesses and activities for the oil and gas industry in Malaysia and outside Malaysia, whether solely or jointly with others and whether directly or indirectly. Save for the foregoing or unless otherwise agreed in writing by the shareholders, none of them shall enter into any agreement, arrangement or discussion with any third party regarding any proposal or transaction or do any act or thing which would be inconsistent, in conflict or competing, with the proposed joint effort, the Business and any other transactions or arrangements contemplated by the Agreement. 3.8 Except as otherwise provided herein, the Agreement shall continue in full force and effect without limit in point of time until the earlier of the following events: (a) (b) the shareholders agree in writing to terminate the Agreement; or in relation to any one shareholder, upon that shareholder ceasing to hold any shares. 3

4 3.9 An "Event of Default" means the occurrence of any of the following if in relation to any of the shareholders: (a) (b) (c) (d) a material breach by a shareholder of its obligations under or pursuant to the Agreement and, in the case of a breach capable of remedy, failure to remedy the same within 30 days of receipt of a written notice by any other shareholders complaining of such breach and requiring remedy of such breach; inability or admission of inability to pay its debts as they fall due, the value of its assets being less than its liabilities (taking into account contingent and prospective liabilities) or declaration of a moratorium in respect of any of its indebtedness; being adjudicated a bankrupt; any corporate action, legal proceedings or other procedure or step being taken (or any analogous procedure or step being taken in any jurisdiction) in relation to: a. the suspension of payments, a moratorium of any indebtedness, windingup, dissolution, administration or reorganisation (by way of voluntary arrangement, scheme of arrangement or otherwise); b. a composition, assignment or arrangement with any creditor; or c. the appointment of a liquidator, receiver, administrative receiver or other similar officer in respect of any of its assets; or (e) at any time there is a material adverse change in its condition or status such that, in the reasonable opinion of the non-defaulting shareholder ( Other Party ), it appears likely that it will be unable to meet its obligations under the Agreement If after a period of 3 years from the date of the Agreement, the SPV does not for whatsoever reason, commence the Business or having commenced the Business, has not for whatsoever reason, secured a Malaysian Opportunity, then any shareholder may terminate the Agreement by giving not less than 14 days prior written notice to the other Party, without prejudice to any previously accrued rights, obligations or liabilities, and the shareholders agree that the SPV shall then be voluntarily wound up in which event the shareholders shall forthwith do all acts and things necessary to wind up the SPV in accordance with all applicable laws and the Articles. Upon the incorporation of the SPV, the SPV shall become a subsidiary of EOGS. As a result, the SPV will also be deemed a subsidiary to the Company. 4. RATIONALE AND PROSPECTS The Agreement and setting up/acquisition of the SPV to pursue Malaysian Opportunities is in line with the Company s plans to explore business in the oil and gas industry in Malaysia. It is expected to contribute positively to the profitability and growth of the Company in the future. 4

5 5. SOURCE OF FUNDING The Company will fund its investment in the SPV through the Company s internally generated funds. 6. FINANCIAL EFFECTS 6.1 Share Capital The Agreement does not have any effect on the issued and paid-up share capital of the Company since the purchase consideration / incorporation of the SPV will be fully satisfied in cash. 6.2 Substantial Shareholders Shareholdings The Agreement does not have any effect on the substantial shareholders shareholdings in the Company. 6.3 Net Assets per Share and Gearing The Agreement does not have any material effect on the Net Assets per Share and Gearing in the Company for the financial year ending 31 March Earnings per Share The SPV is not expected to have any material impact on the earnings per share of the Company for the financial year ending 31 March RISK FACTORS The SPV is subject to financial risks inherent in the oil and gas business. Such risks may include competition in the industry, changes in economic and political conditions, loss or suspension of licenses and/or agency rights and increases in costs. The Board of Directors is not aware of any other material risk arising from the SPV other than stated above. 8. ASSUMPTION OF LIABILITIES There are no liabilities, including contingent liabilities and other guarantees to be assumed by the Company arising from the Agreement. 9. DIRECTORS AND MAJOR SHAREHOLDERS INTEREST None of the Directors and/or major shareholders of the Company and/or persons connected to them have any interest, either direct or indirect, in relation to the above. 5

6 10. STATEMENT BY BOARD OF DIRECTORS The Directors of the Company, having considered all aspects of the Agreement, are of the opinion that the Agreement is in best interests of the Company. 11. HIGHEST PERCENTAGE RATIO The highest percentage ratio applicable to the Agreement and the SPV pursuant to Paragraph 10.02(g) of the Main Market Listing Requirements of Bursa Malaysia Securities Berhad is % based on the latest audited financial statements of ENRA for the financial year ended 31 March ESTIMATED TIME FRAME FOR COMPLETION The acquisition of each Party of their agreed shareholdings in the SPV is expected to be completed within thirty (30) days from the date of the Agreement. 13. APPROVALS REQUIRED The Agreement and the setting up of the SPV is not subject to the approval of shareholders of the Company and/or any other relevant authorities. 14. DOCUMENTS AVAILABLE FOR INSPECTION The Agreement is available for inspection at the Company s Registered Office located at D3-U6-15, Block D3, Solaris Dutamas, No. 1 Jalan Dutamas 1, Kuala Lumpur during normal business hours on Mondays to Fridays (except public holidays) for a period of three (3) months from the date of this announcement. This announcement is dated 26 February