2. RATIONALE FOR THE RIGHTS ISSUE AND THE USE OF PROCEEDS

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Bruno Hall
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1 VALLIANZ HOLDINGS LIMITED (Company Registration No E) (Incorporated in the Republic of Singapore) PROPOSED RENOUNCEABLE NON-UNDERWRITTEN RIGHTS ISSUE OF NEW ORDINARY SHARES (THE "NEW SHARES") ON THE BASIS OF ONE NEW SHARE FOR EVERY ONE EXISTING ORDINARY SHARE (THE "EXISTING SHARES") 1. INTRODUCTION 1.1 Rights Issue. The Board of Directors (the "Directors") of Vallianz Holdings Limited (the "Company") wishes to announce a proposed renounceable non-underwritten rights issue of up to 594,706,061 New Shares, at an issue price of S$0.05 for each New Share (the "Issue Price"), on the basis of one New Share for every one Existing Share held by Entitled Shareholders (as defined below) as at a books closure date to be determined by the Directors (the "Books Closure Date"), fractional entitlements to be disregarded (the "Rights Issue"). 1.2 The Company will be seeking specific approval from shareholders of the Company (the "Shareholders") for the Rights Issue at an extraordinary general meeting to be convened (the "EGM"). 1.3 The Company has appointed DBS Bank Ltd. (the "Manager") as the manager for the Rights Issue. 2. RATIONALE FOR THE RIGHTS ISSUE AND THE USE OF PROCEEDS 2.1 Rationale for the Rights Issue. The Directors are proposing the Rights Issue as they believe that the Rights Issue will provide Shareholders with the opportunity to maintain their equity participation in the Company, and increase the Company s capital base and strengthen its balance sheet and enhance the financial flexibility of the Company to capitalise on growth opportunities as and when they arise. 2.2 Use of Proceeds. Based on the Existing Issued Share Capital (as defined below) whereby up to 594,706,061 New Shares will be issued under the Rights Issue, the Company is expected to raise gross proceeds of a minimum of approximately S$11.8 million (due to the Undertaking as described below) and up to a maximum of approximately S$29.7 million. The minimum net proceeds of the Rights Issue is approximately S$11.4 million and the maximum net proceeds of the Rights Issue is approximately S$29.3 million. The net proceeds will be used for the following purposes:- up to 90% of the net proceeds will be used for the acquisition of vessels directly or via special purpose vehicles; and the balance for general working capital purposes. Pending the deployment of the net proceeds from the Rights Issue, the proceeds may be deposited with banks and/or financial institutions, invested in short-term money markets and/or marketable securities, and/or used for any other purposes on a shortterm basis, as the Directors may, in their absolute discretion, deem fit. The Company will make the necessary announcements and subsequently provide a status report on the use of such proceeds in its annual report.

2 3. TERMS OF THE RIGHTS ISSUE 3.1 Terms. The Company is proposing the Rights Issue to be offered on a renounceable non-underwritten basis to Entitled Shareholders on the basis of one New Share for every one Existing Share held by Entitled Shareholders as at the Books Closure Date at the Issue Price. Entitled Shareholders will be entitled to participate in the Rights Issue and receive the Offer Information Statement (as defined below) together with the appropriate application forms and accompanying documents at their respective Singapore addresses. Entitled Shareholders will be free to accept in full or in part, decline or otherwise renounce or, in the case of Entitled Depositors only, trade (during the nil-paid rights trading period prescribed by the SGX-ST) their provisional allotment of New Shares under the Rights Issue, and will also be eligible to apply for additional New Shares in excess of their provisional allotments (the "Excess New Shares"). In the allotment of Excess New Shares, preference will be given to the rounding of odd lots, and the Directors and Substantial Shareholders 1 will rank last in priority. The Rights Issue offers the Entitled Shareholders an opportunity to subscribe for the New Shares at the Issue Price. The Issue Price represents a discount of approximately: 44.4% to the closing market price of S$0.09 per Share on 19 November 2010, being the last traded price of the Shares on Catalist on the full market day immediately preceding the date of this Announcement; 47.7% to the volume-weighted average price per Share for the 10 market days period preceding the date of this Announcement; and 28.6% to the theoretical ex-rights price 2 of S$0.07 per Share. The Issue Price will be payable in full upon acceptance and/or application. The New Shares will, upon allotment and issue, rank pari passu in all respects with the Existing Shares, save for any dividends, rights, allotments or other distributions, the record date for which falls before the date of issue of the New Shares. The terms and conditions of the Rights Issue are subject to such changes as the Directors may deem fit. The final terms and conditions of the Rights Issue will be contained in the offer information statement to be issued by the Company in connection with the Rights Issue (the "Offer Information Statement"). 3.2 Size of the Rights Issue. As at the date hereof, the Company has 594,706,061 ordinary shares in the Company (the "Shares") that have been issued and are fully paid-up (the "Existing Issued Share Capital"). Based on the Existing Issued Share Capital, up to 594,706,061 New Shares will be issued under the Rights Issue. 3.3 Eligibility of Shareholders to Participate in the Rights Issue. The Company proposes to provisionally allot the New Shares to all Shareholders who are eligible to participate in the Rights Issue (the "Entitled Shareholders") comprising Entitled 1 2 Substantial Shareholder refers to a Shareholder with an interest in Shares constituting not less than 5.0% of all outstanding Shares. Theoretical ex-rights price per Share refers to the theoretical market price of each Share assuming the completion and full subscription of the Rights Issue, and is calculated based on the closing price of S$0.09 per Share on Catalist on 19 November 2010 (being the last traded price of the Shares on Catalist on the full market day immediately preceding the date of this Announcement), the gross proceeds from the Rights Issue and the total number of Shares following the completion and full subscription of the Rights Issue.

3 Depositors and Entitled Scripholders (each as defined below) whose registered addresses with The Central Depository (Pte) Limited ("CDP") or the Company, as the case may be, are in Singapore or who have, at least three market days prior to the Books Closure Date, provided to CDP or the Company, as the case may be, addresses in Singapore for the service of notices and documents. 3.4 Entitled Depositors. Entitled Depositors are Entitled Shareholders with Shares entered against their names in the Depository Register 3 as at the Books Closure Date. 3.5 Entitled Scripholders. Entitled Scripholders are Entitled Shareholders with Shares registered in their own names with the Company or Tricor Barbinder Share Registration Services (a division of Tricor Singapore Pte. Ltd.) (the "Share Registrar") as at the Books Closure Date. 3.6 Foreign Shareholders. For practical reasons and in order to avoid any violation of the securities legislation applicable in countries other than Singapore, the Rights Issue is only made in Singapore and will not be offered to Shareholders with registered addresses outside Singapore as at the Books Closure Date and who have not, at least three market days prior to the Books Closure Date, provided the CDP or Share Registrar, as the case may be, with addresses in Singapore for the service of notices and documents (the "Foreign Shareholders"). The Offer Information Statement and the accompanying documents will not be mailed outside Singapore. Foreign Shareholders who wish to be eligible to participate in the Rights Issue may provide a Singapore address by notifying in writing, as the case may be, CDP at 4 Shenton Way, #02-01 SGX Centre 2, Singapore or Vallianz Holdings Limited c/o the Share Registrar, Tricor Barbinder Share Registration Services (a division of Tricor Singapore Pte. Ltd.), 8 Cross Street, #11-00 PWC Building, Singapore , not later than three market days before the Books Closure Date. If it is practicable to do so, arrangements may, at the absolute discretion of the Company, be made for the provisional allotments of New Shares which would otherwise have been provisionally allotted to Foreign Shareholders to be sold "nilpaid" on the SGX-ST as soon as practicable after dealings in the provisional allotments of New Shares commence. Such sales may, however, only be effected if the Company, in its absolute discretion, determines that a premium can be obtained from such sales, after taking into account expenses to be incurred in relation thereto. The net proceeds from all such sales, after deduction of all expenses therefrom, will be pooled and thereafter distributed to Foreign Shareholders in proportion to their respective shareholdings or, as the case may be, the number of Shares entered against their names in the depository register maintained by CDP as at the Books Closure Date and sent to them at their own risk by ordinary post. If the amount of net proceeds to be distributed to any single Foreign Shareholder is less than S$10.00, such amount shall be dealt with as the Directors may, in their absolute discretion, deem fit in the interests of the Company and no Foreign Shareholder shall have any claim whatsoever against the Company, the Manager or CDP in connection therewith. Where such provisional allotments of New Shares are sold "nil-paid" on the SGX-ST, they will be sold at such price or prices as the Company may, in its absolute discretion, decide and no Foreign Shareholder shall have any claim whatsoever against the Company, the Manager or CDP. If such provisional allotments of New Shares cannot be or are not sold on the SGX-ST as aforesaid for any reason by such time as the SGX-ST shall have declared to be the last day for trading in the provisional allotments of New Shares, the New Shares represented by such provisional allotments will be allotted and issued to satisfy excess applications or disposed of or dealt with in such manner as the Directors may, in their absolute discretion, deem fit in the interests of the Company and no Foreign Shareholder shall 3 Depository Register refers to a register maintained by CDP in respect of book-entry securities.

4 have any claim whatsoever against the Company, the Manager or CDP in connection therewith. 3.7 Provisional Allotments. Entitled Shareholders will be at liberty to accept (in full or in part), decline or otherwise renounce or, in the case of Entitled Depositors only, trade (during the nil-paid rights trading period prescribed by the SGX-ST) their provisional allotments of the New Shares and will be eligible to apply for Excess New Shares. Provisional allotments of New Shares which are not taken up for any reason, will be aggregated and used to satisfy excess applications (if any), or disposed of or otherwise dealt with in such manner as the Directors may, in their absolute discretion, deem fit for the benefit of the Company. 3.8 Non-Underwritten Rights Issue. The Rights Issue will not be underwritten. The Company has decided to undertake the Rights Issue on a non-underwritten basis in view of the Undertaking (as defined below) provided by Swiber Holdings Limited ("Swiber") and the savings in cost by the Company in respect of underwriting fees. 4. UNDERTAKING 4.1 Undertaking. As at the date of this Announcement, Swiber holds a direct interest in 171,767,493 Shares representing approximately 28.88% of the Existing Issued Share Capital. To demonstrate its commitment to the Company in respect of the Rights Issue, Swiber has provided the Undertaking in respect of the number of Shares held by it as at the Books Closure Date and for such number of Excess New Shares provided that its shareholding in the Company following the Rights Issue will not exceed 49.1%. Subject to, among others, the approvals set out below, Swiber has undertaken to the Company, among others, that: that as at the Books Closure Date, it will, directly and/or through one or more of our nominee(s), own not less than 171,767,493 Shares; it will subscribe and pay for all of its provisional allotments of New Shares represented by the number of Shares held by it as at the Books Closure Date; and it will subscribe for such number of Excess New Shares, subject to availability, provided that its shareholding in the Company following the Rights Issue will not exceed 49.1%, (the "Undertaking"). 4.2 Shareholdings in the Company. Based on the terms of the Rights Issue as set out herein, the shareholding interest of Swiber immediately after the close of the Rights Issue will be: 28.88% (in the event that 171,767,493 New Shares are issued to Swiber, allowing it to maintain its shareholding in the Company and all of the Entitled Shareholders have subscribed for their provisional allotments of New Shares, the "Maximum Subscription Scenario"); accordingly, no excess New Shares will be available for Swiber's subscription, or 49.1% (in the event that 171,767,493 New Shares as well as 64,447,011 Excess New Shares are issued to Swiber and none of the Entitled Shareholders has subscribed for any New Shares, the "Minimum Subscription Scenario").

5 4.3 Whitewash Waiver. Accordingly, an application was made to the Securities Industry Council ("SIC") on 21 October 2010 for a waiver of the obligation for Swiber and its concert parties to make a general offer for the Company under Rule 14 of the Singapore Code on Takeovers and Mergers (the "Code") should their aggregate voting rights in the Company increase to 30.0% or more based on the enlarged issued share capital as a result of Swiber acquiring the New Shares and Excess New Shares pursuant to the Undertaking (the "Whitewash Waiver"). On 1 November 2010, the SIC granted the Whitewash Waiver to Swiber and its concert parties. The Whitewash Waiver is subject to the satisfaction of, amongst others, the following conditions (the "SIC Conditions"): (d) a majority of holders of voting rights of the Company present and voting at a general meeting, held before the Rights Issue, approve by way of a poll, in a resolution (the "Whitewash Resolution") to waive their rights to receive a general offer from Swiber and its concert parties; the Whitewash Resolution is separate from other resolutions; Swiber and its concert parties as well as parties not independent of them abstain from voting on the Whitewash Resolution; and Swiber and its concert parties did not acquire and are not to acquire any Shares or instruments convertible into and options in respect of Shares (other than subscriptions for, rights to subscribe for, instrument convertible into or options in respect of the New Shares which have been disclosed in the circular: (i) (ii) during the period between the date of this Announcement and the date the Shareholders' approval is obtained for the Whitewash Resolution; and in the six months prior to the date of this Announcement, but subsequent to negotiations, discussions or the reaching of understandings or agreements with the Directors in relation to the Rights Issue. The Company has appointed PrimePartners Corporate Finance Pte Ltd as the independent financial adviser to advise its shareholders in relation to the Whitewash Resolution. Save for Swiber and subject to the approval of the Whitewash Resolution and approval of the SGX-ST, the Company may scale down any Shareholder's application to subscribe for any New Shares, including Swiber s application such that its shareholding in the Company following the Rights Issue will not exceed 49.1%, to avoid placing such a Shareholder in the position of incurring an obligation to make a mandatory general offer for the Shares under the Code as a result of other Shareholders not taking up their entitlements of New Shares in full. 5. APPROVALS The Rights Issue is subject to, amongst others, the following: the approval in-principle by the SGX-ST and/or the Sponsor (as defined below) for the dealing in, listing and quotation of the New Shares on Catalist having been obtained and not having been withdrawn;

6 (d) (e) the Rights Issue and the issuance and allotment of the New Shares having been approved by Shareholders at the EGM; Shareholders voting in favour of the Whitewash Resolution at the EGM; the Whitewash Waiver having been obtained from the SIC in respect of the Rights Issue; and the lodgment of the Offer Information Statement in respect of the Rights Issue on the Catalodge. The Offer Information Statement will be despatched to Entitled Shareholders in due course. Stamford Corporate Services Pte Ltd, the Company s sponsor (the "Sponsor"), will be submitting an additional listing confirmation to the SGX-ST for the listing and quotation of the New Shares on Catalist. An appropriate announcement will be made in due course when the Company receives the listing and quotation notice for the New Shares from the SGX-ST. 6. CIRCULAR TO SHAREHOLDERS A circular to Shareholders containing, among others, the Notice of the EGM and further details of the Rights Issue and the Whitewash Resolution will be despatched to Shareholders in due course. Thereafter, the Offer Information Statement will be lodged with the SGX-ST (acting as agent on behalf of the Monetary Authority of Singapore) and despatched by the Company to the Entitled Shareholders following the EGM, if the Rights Issue and the Whitewash Resolution are approved at the EGM. 7. WORKING CAPITAL The Directors are of the opinion that, barring unforeseen circumstances, after taking into consideration the Company's present bank facilities, the working capital available to the Company and its subsidiaries is sufficient to meet their present requirements and the reasons for proposing to undertake the Rights Issue (as mentioned in paragraph 2.1 above) are to increase the Company s capital base and strengthen its balance sheet and enhance the financial flexibility of the Company to capitalise on potential growth opportunities; and after taking into consideration the Company's present bank facilities and the net proceeds of the Rights Issue, the working capital available to the Company and its subsidiaries will be sufficient to meet their present requirements. 8. RESPONSIBILITY STATEMENT The Directors have taken all reasonable care to ensure that the facts stated in this Announcement are fair and accurate and that no material facts have been omitted from this Announcement, and they jointly and severally accept responsibility accordingly.

7 9. INTERESTS OF DIRECTORS AND SUBSTANTIAL SHAREHOLDERS Save as disclosed in this Announcement, none of the Directors or Substantial Shareholders, has any interest, direct or indirect, in the Rights Issue (other than through their respective shareholdings in the Company). Where there are variations or amendments to the terms of the Rights Issue, the Company will make further announcements as and when appropriate. By Order of the Board Lee Bee Fong Company Secretary 22 November 2010 This announcement has been prepared by the Company and its content have been reviewed by the Company's sponsor, Stamford Corporate Services Pte Ltd (the "Sponsor"), for compliance with the relevant rules of the SGX-ST. The Sponsor has not independently verified the contents of this announcement. This announcement has not been examined or approved by the SGX-ST and the SGX-ST assumes no responsibility for the contents of this announcement including the correctness of any of the statements or opinions made or reports contained in this announcement. The contact person for the Sponsor is Mr. Bernard Lui. Telephone number:

SAMKO TIMBER LIMITED (Incorporated in the Republic of Singapore) (Company Registration Number: M)

SAMKO TIMBER LIMITED (Incorporated in the Republic of Singapore) (Company Registration Number: 200517815M) PROPOSED RENOUNCEABLE NON-UNDERWRITTEN RIGHTS ISSUE 1. INTRODUCTION 1.1 The board of directors