PROPOSED PLACEMENT OF UP TO 125,000,000 NEW ORDINARY SHARES OF RM0.50 EACH IN WCT ( WCT SHARES ) ( PROPOSED PLACEMENT )

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1 WCT HOLDINGS BERHAD ( WCT OR COMPANY ) PROPOSED PLACEMENT OF UP TO 125,000,000 NEW ORDINARY SHARES OF RM0.50 EACH IN WCT ( WCT SHARES ) ( PROPOSED PLACEMENT ) 1. INTRODUCTION On behalf of the Board of Directors of WCT ( Board ), Maybank Investment Bank Berhad ( Maybank IB ) wishes to announce that the Board has resolved to undertake the Proposed Placement for the purpose of raising additional working capital funds for the Company and its subsidiaries ( Group ), part repay bank borrowings as well as to enlarge its equity base. 2. DETAILS OF THE PROPOSED PLACEMENT 2.1 Placement size The Proposed Placement will entail the issuance of up to million new ordinary shares of RM0.50 each in the Company ( Placement Shares ), representing approximately 10% of the existing issued and paid-up share capital of the Company (excluding treasury shares). The final number of Placement Shares to be issued would depend on the then market price of WCT Shares and the demand from the potential placees ( Placees ) to be identified. 2.2 Placement arrangement The identity of the Placees and number of Placement Shares to be allotted shall be determined and finalised at a later date. Subject to prevailing market conditions or the funding requirements of the Group, the Proposed Placement may be implemented in tranches within six (6) months from the date of approval of Bursa Malaysia Securities Berhad ( Bursa Securities ) for the listing and quotation of the Placement Shares on the Main Market of Bursa Securities or any extended period as may be approved by Bursa Securities ( Bursa Securities Approval ). 2.3 Basis and justification for the issue price of the Placement Shares The issue price of the Placement Shares ( Issue Price ) will be fixed and announced later by the Board at the time of implementation of the Proposed Placement ( Price- Fixing Date ). The Issue Price may be fixed at a discount of not more than 10% to the five (5)-day volume weighted average market price ( VWAP ) of WCT Shares immediately preceding the Price-Fixing Date. 2.4 Ranking for the Placement Shares The Placement Shares shall, upon allotment and issuance, rank equally in all respects with the then existing WCT Shares, save and except that they shall not be entitled to any dividends, rights, allotments and/or any other distributions that may be declared, made or paid prior to the date of allotment of said Placement Shares. 1

2 2.5 Listing and quotation of the Placement Shares The Company will make an application to Bursa Securities for the listing and quotation of the Placement Shares on the Main Market of Bursa Securities. 2.6 Use of proceeds For illustration purposes, assuming an indicative Issue Price of RM1.70 per Placement Share, the Company may raise up to approximately RM212.5 million which will be used in the following manner: Details of utilisation Estimated timeframe for utilisation from the date of listing of the Placement Shares Amount (RM 000) Part repayment of bank borrowings of the Group (1) 12 months 80,000 Working capital of the Group (2) 12 months 130,000 Defray estimated expenses relating to the Proposed Placement (3) 1 month 2,500 Total 212,500 Notes: (1) The Board intends to allocate up to 40% of the gross proceeds to partly repay the bank borrowings of the Group comprising among others, bank overdraft, revolving credit and term loan facilities which stood at approximately RM1.02 billion as at 30 September For illustration purposes, based on the weighted average effective interest rate of 4.85% per annum, such repayment is expected to result in interest savings of approximately RM3.88 million per annum to the Group. (2) The Board intends to allocate up to 60% of the gross proceeds to fund some of the ongoing construction projects and property development projects of the Group, such as: (a) (b) (c) (d) (e) (f) construction and completion of viaduct guideway and other associated works from Bandar Malaysia South Portal to Kampung Muhibbah under the MRT2 project; development and upgrading of Pan Borneo Highway in the State of Sarawak, Malaysia - Phase 1; procurement, construction and commissioning of civil and infrastructure works for the RAPID project in Pengerang, Johor; to part finance the development cost of the Paradigm Mall, Johor Bahru; to part finance the development cost of The Lead Residence, Klang; and to part finance the development cost of The Waltz Residence, Kuala Lumpur. The final allocation of proceeds for the engineering and construction division and the property development division may vary depending on the actual needs of each project. The working capital requirements include the initial project costs (i.e. regulatory fees, consultant and professional fees), staff related costs, promotional and marketing expenses, general overheads and other administrative expenses. 2

3 (3) The estimated expenses consist of professional fees, placement fees, fees payable to authorities and other miscellaneous expenses to be incurred in relation to the Proposed Placement. Any variation to the amount of estimated expenses in relation to the Proposed Placement will result in an adjustment from/to the portion being earmarked for working capital requirements accordingly. 3. RATIONALE FOR THE PROPOSED PLACEMENT After taking into consideration the various methods of fund raising available such as debt financing/bank borrowing as well as the capital structure of the Company, the Board is of the view that the Proposed Placement is the most appropriate avenue to raise the additional working capital and to repay bank borrowings as and when required in an expeditious manner, and at the same time, enable the Company to enlarge its equity base after taking into account the Group s current level of business operations. 4. EFFECTS OF THE PROPOSED PLACEMENT 4.1 Share capital The proforma effect of the Proposed Placement on the issued and paid-up share capital of the Company is as follows: WCT Shares RM As at 30 December 2016, being the latest practicable date prior to this Announcement ( LPD ) 1,262,122, ,061,210 Less: Treasury shares (8,720,071) (4,360,036) 1,253,402, ,701,175 To be issued pursuant to the Proposed Placement 125,000,000 62,500,000 Enlarged issued and paid-up share capital 1,378,402, ,201,175 [The rest of this page is intentionally left blank] 3

4 4.2 Net assets ( NA ) per WCT Share and gearing For illustration purposes, based on the latest audited consolidated statement of financial position of the Company as at 31 December 2015 and on the assumption that the Proposed Placement had been effected on that date, the proforma effect of the Proposed Placement on the NA per WCT Share and gearing of the WCT Group is as follows: (I) (II) Audited as at 31 December 2015 Subsequent adjustments after 31 December 2015 (1) After (I) and the Proposed Placement (RM 000) (RM 000) (RM 000) Share capital 600, , ,561 Share premium 2,228,460 2,310,960 2,460,960 (2) Reserves (207,852) (209,754) (212,254) (3) Treasury shares, at cost (10,765) (12,198) (12,198) Shareholders funds / NA 2,610,253 2,720,069 2,930,069 Non-controlling interest 36,849 36,849 36,849 Total equity 2,647,102 2,756,918 2,966,918 WCT Shares in issue (excluding treasury shares) ( 000) 1,192,099 1,253,402 1,378,402 NA per WCT Share (RM) Total borrowings 2,593,246 2,593,246 2,513,246 (4) Gearing (times) (5) Notes: (1) After adjusting for WCT Shares issued from 1 January 2016 up to the LPD pursuant to the exercise of 6,040,000 employees share option scheme 2013/2023 ( ESOS Options ) and 55,262,582 warrants 2013/2016, 400 outstanding warrants 2013/2017 ("Warrants D") as well as the share-buy-back of 889,300 WCT Shares. (2) Based on an indicative Issue Price of RM1.70 per Placement Share. (3) After deducting the estimated expenses relating to the Proposed Placement of approximately RM2.5 million. (4) After taking into account the repayment of the bank borrowings of the Group of RM80.0 million from the proceeds to be raised. (5) Computed based on total borrowings over NA. 4

5 4.3 Substantial shareholders shareholdings The proforma effect of the Proposed Placement on the shareholdings of the Company s substantial shareholders as at the LPD is as follows: As at the LPD After the Proposed Placement Direct Indirect Direct Indirect WCT Shares % (2) WCT Shares % (2) WCT Shares % (2) WCT Shares % (2) Tan Sri Lim Siew Choon ,718, (1) ,718, (1) Legacy Pacific Limited ,718, (1) ,718, (1) Dominion Nexus Sdn Bhd ( DNSB ) 245,718, ,718, Lembaga Tabung Haji 124,504, ,504, Employees Provident Fund Board AmanahRaya Trustees Berhad (Skim Amanah Saham Bumiputera) Kumpulan Wang Persaraan (Diperbadankan) 99,989, ,989, ,818, ,818, ,829, ,829, Notes: (1) Deemed interested by virtue of their interest in DNSB pursuant to Section 6A of the Companies Act, 1965 ( Act ). (2) Based on the issued and paid-up share capital of the Company excluding treasury shares. 5

6 4.4 Earnings per Share ( EPS ) The Proposed Placement is not expected to have any material effect on the EPS of the WCT Group for the financial year ending 31 December 2017, save for the dilution in EPS due to the increase in the number of WCT Shares in issue pursuant to the issuance of the Placement Shares. Nevertheless, barring unforeseen circumstances, the Proposed Placement is expected to result in interest savings from the part repayment of bank borrowings which would contribute positively to the future earnings of the WCT Group. 4.5 Convertibles securities Save for the ESOS Options, Warrants D and warrants 2015/2020 ( Warrants E ), WCT does not have any other convertible securities as at the LPD. In accordance with the provisions of the relevant by-laws / deed poll constituting the ESOS Options and the respective warrants, the Proposed Placement is not expected to give rise to any adjustments to the exercise price and/or to the number of ESOS Options, Warrants D and Warrants E. 5. APPROVALS REQUIRED The Proposed Placement is subject to the following approvals being obtained: (i) (ii) Bursa Securities for the listing and quotation of the Placement Shares on the Main Market of Bursa Securities; and any other relevant authorities, if required. The Company had obtained the approval of its shareholders at its 5 th Annual General Meeting ( AGM ) convened on 27 May 2016 pursuant to Section 132D of the Act which empowers the Directors of the Company to allot and issue new WCT Shares at any time at such price, upon such terms and conditions, for such purposes and to such person(s) whomsoever as the Directors may in their absolute discretion deem fit, provided that the aggregate number of new WCT Shares issued does not exceed 10% of the total issued and paid-up share capital of the Company for the time being. Such authority shall continue to be in force until the conclusion of the next AGM of the Company. Since the Proposed Placement may be implemented in tranches within six (6) months from the Bursa Securities Approval, the Company intends to seek a new shareholders mandate pursuant to Section 132D of the Act in the event the Placement Shares are not fully issued prior to the conclusion of the next AGM of the Company to be convened on or before 30 June The Proposed Placement is not conditional upon any other corporate exercise/scheme of the Company. 6. INTERESTS OF THE DIRECTORS, MAJOR SHAREHOLDERS AND/OR PERSONS CONNECTED TO THEM None of the Directors and major shareholders of the Company as well as persons connected to them have any interest, direct and/or indirect, in the Proposed Placement. 6

7 7. DIRECTORS STATEMENT After having considered all aspects of the Proposed Placement, including the rationale and effects of the Proposed Placement, the Board is of the opinion that the Proposed Placement is in the best interest of the Company and the Group. 8. ADVISERS Maybank IB has been appointed as Principal Adviser for the Proposed Placement. The Company has also appointed Maybank IB, AmInvestment Bank Berhad and RHB Investment Bank Berhad as Joint Placement Agents for the Proposed Placement. 9. SUBMISSION TO THE RELEVANT AUTHORITIES AND THE ESTIMATED TIMEFRAME FOR COMPLETION The Company is expected to submit the application in relation to the Proposed Placement to Bursa Securities within three (3) months from the date of this Announcement. The Board intends to complete the implementation of Proposed Placement within six (6) months from the date of the Bursa Securities Approval. This Announcement is dated 18 January