BERJAYA ASSETS BERHAD

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1 BERJAYA ASSETS BERHAD ANNOUNCEMENT PROPOSED NOVATION OF AGREEMENT RELATING TO THE PROPOSED ACQUISITION OF OFFICE UNITS IN MENARA MSC CYBERPORT, JOHOR BAHRU 1.0 INTRODUCTION 1.1 The Board of Directors of Berjaya Assets Berhad ( BAssets ) wishes to announce that its 80%-owned subsidiary, Berjaya Times Square Sdn Bhd ( BTSSB ) has on 29 April 2015 entered into a Deed of Novation cum Supplemental Agreement ( Novation Deed ) with MOL Properties Sdn Bhd ( MOL Properties ) and Dunlop Estates Holdings Sdn Bhd ( Dunlop ) for the proposed assumption of rights and obligations of MOL Properties under a sale and purchase agreement dated 2 July 2014 ( SPA ) entered into between MOL Properties and Dunlop for the proposed acquisition of 76 unsold office units ( Property ) in Menara MSC Cyberport, Johor Bahru ( Proposed Assumption ). 2.0 DETAILS OF THE PROPERTY 2.1 Pursuant to the Novation Deed, BTSSB shall assume all rights, benefits, obligations and liabilities of MOL Properties under the SPA for a cash consideration of RM107.5 million and that the deposit of RM10.75 million paid by MOL Properties to Dunlop shall be deemed to be paid by BTSSB. The Property, measuring in total about 282,373 square feet ( sq. ft. ) is located within Menara MSC Cyberport which is constructed on a piece of freehold land held under title no. Geran , Lot no , Township and District of Johor Bahru, State of Johor. Menara MSC Cyberport is the first MSC Malaysia Cybercentre in Johor State and is an ISO 9001:2000 certified MSC Malaysia Cybercentre Management. The Property is strategically located along Jalan Bukit Meldrum within Tanjung Puteri and lies about 3 kilometers north of Johor Bahru city centre. Currently, 65 units (out of the 76 units) of the Property are tenanted and that all rights title and interest under the respective tenancy agreements shall be assigned to BTSSB pursuant to the Proposed Assumption. 2.2 The cash consideration for the Proposed Acquisition was arrived at on a willingbuyer willing-seller basis after taking into consideration inter-alia, the potential capital appreciation of the Property and the open market valuation by an independent valuer. The Property shall be acquired on an as is where is basis, free from all encumbrances with vacant possession together with all rights attaching thereto as well as all rights title and interest in and under the tenancy agreements in respect to the Property.

2 2.3 The cash consideration of RM107.5 million payable by BTSSB pursuant to the Proposed Assumption will be funded from internally-generated funds and/or bank borrowings. BTSSB will pay the consideration of RM107.5 million in the following manner:- i) RM10.75 million or 10% of the consideration has been paid to MOL Properties upon execution of the Novation Deed; and ii) the balance of RM96.75 million or 90% of the consideration is payable to Dunlop on or before 14 May Save for the liabilities to be assumed by BTSSB under the SPA and Novation Deed, there are no other liabilities to be assumed by BTSSB arising from the Proposed Assumption. 3.0 INFORMATION ON MOL PROPERTIES 3.1 MOL Properties, a 70%-owned subsidiary of MOL Ventures Pte. Ltd. was incorporated in Malaysia on 29 October The current issued and paid-up share capital of MOL Properties is RM250,000 comprising 250,000 ordinary shares of RM1.00 each. The principal activities of MOL Properties are property management, property development and property investment. Tan Sri Dato Seri Vincent Tan Chee Yioun ( TSVT ) is a deemed major shareholder of MOL 4.0 INFORMATION ON DUNLOP 4.1 Dunlop was incorporated in Malaysia on 20 June The current issued and paid-up share capital of Dunlop is RM25,000 comprising 25,000 ordinary shares of RM1.00 each. The principal activities of Dunlop are investment holding, property holding and development. Dunlop is 100% owned by Sarawak Energy Berhad which in turn is wholly owned by the State of Sarawak. 5.0 RATIONALE FOR THE PROPOSED ASSUMPTION 5.1 The Proposed Assumption enables the BAssets Group to expand its property portfolio and further enhance the Group s presence in Johor. 6.0 CONDITIONS OF THE PROPOSED ASSUMPTION 6.1 The Proposed Assumption is subject to, inter-alia the approval from the Economic Planning Unit of the Prime Minister s Department of Malaysia for the acquisition of the Property. 6.2 The Proposed Assumption is not subject to the approval of the shareholders of BAssets.

3 7.0 PROSPECTS AND RISK FACTORS 7.1 In 2014, Bank Negara Malaysia reported that Malaysia s economy expanded with growth in all sectors to register a Gross Domestic Product ( GDP ) growth of 6.0%. As in previous years, Malaysia s GDP continued to be driven by the services and manufacturing sectors, while construction, agriculture and mining & quarrying remained sturdy. Towards end of 2014, the drastic drop of crude oil price and weakening of Malaysia Ringgit has drawn a mixed outlook on the country s economy. Malaysia s inflation rate rose 2.7% in December 2014, which is 0.1% lower compared to November For 2014, the inflation rate has increased by 3.2% from the previous year. The past year was filled with challenges, both in the nation s property industry as well as economy. The property market which was seen to be bullish in the past few years has slowed down throughout the year of Transaction activities in most states lacked momentum compared to the previous year. Intervention from the Federal Government by introducing measures especially on lending guidelines had somehow tapered off the speculative sentiments, driving both developers and investors to fall back on the fundamentals. Goods and Services Tax, announced since Budget 2014 has been a dominant topic that somehow spurred the property market, with mixed views by both investors and analysts. As at second quarter of 2014, the existing supply of office space in Johor Bahru stood at 8.7 million sq. ft. of which government buildings contributed 33%. Demand for office space has been stable and the vacancy rate was about 25% in Rental rates for prime office space in Johor Bahru city remained steady at about RM2.80 to RM3.50 per sq. ft. ( psf ) per month, while it was RM1.80 to RM2.50 psf for other office buildings. Johor Bahru s property market has benefited from the development of Iskandar Malaysia ( IM ), which consists of Johor Bahru District, Kulaijaya District and a part of Pontian District, and is the nation s first economic corridor with a Comprehensive Development Plan of 20 years from 2006 to As of first half of 2014, cumulative committed investments into IM has reached RM146 billion, increasing almost 13 fold compared to its debut in 2006 (RM11.30 billion). Out of the committed amount, about 48% of the investment target has been realized. Demand for student/staff accommodation is rising with the establishment of Educity while hotel rooms are in need with the completion of tourist hotspots. In other words, the property market is supported by rising demand since IM kickstarted back in (Source: Property Market Report 2015 by C H Williams Talhar & Wong The property market in Johor Bahru has been on an upward trend since 2010 and whilst the recent cooling measures introduced by the Malaysian Government and Bank Negara Malaysia to control price levels of Malaysia property market may result in the softening of the general property market in Johor, the Management of the BAssets Group believes that the strategic location of the Property would provide the Group with a competitive edge and promising upside in realizing the values of the Property in the future.

4 7.3 As in any property acquisition, the Proposed Assumption is exposed to normal inherent risks in the property market sector due to overall macroeconomic environment cyclical or otherwise. The property market is exposed to factors such as credit and liquidity risks as well as inflationary pressures such as increase in lending rates. The Board of Directors of BAssets is aware of such inherent risks and will take appropriate measure to mitigate them as and when necessary. 8.0 EFFECTS OF THE PROPOSED ASSUMPTION 8.1 The Proposed Assumption will not have any effect on the issued and paid-up share capital and substantial shareholders shareholdings of BAssets. 8.2 The Proposed Assumption is not expected to have any material effect on the earnings, net assets and gearing of the BAssets Group for the current financial year ending 30 June However, the Proposed Assumption is expected to contribute positively to the earnings of the BAssets Group in future. 9.0 EXPECTED COMPLETION DATE 9.1 The Proposed Assumption is expected to be completed in mid DIRECTORS AND MAJOR SHAREHOLDERS INTERESTS 10.1 Berjaya Corporation Berhad is a major shareholder of BAssets and a deemed major shareholder of MOL TSVT is a major shareholder of BAssets and a deemed major shareholder of MOL Mr. Lim Meng Kwong ( Mr. Lim ) is a common director of BAssets and MOL Save as disclosed above, none of the other Directors and major shareholders of BAssets or persons connected to them has any interest, direct or indirect, in the Proposed Assumption PERCENTAGE RATIO 11.1 The highest percentage ratio applicable to the Proposed Assumption pursuant to Paragraph 10.02(g) of Bursa Malaysia Securities Berhad s Main Market Listing Requirements is about 4.14 % (based on the audited financial statements of the BAssets Group for the financial year ended 30 June 2014) TRANSACTIONS WITH THE SAME RELATED PARTY 12.1 Save for the Proposed Assumption, there were no other transactions with the same related party for the past 12 months.

5 13.0 DIRECTORS RECOMMENDATION 13.1 The Board of Directors of BAssets (save for Mr. Lim) is of the opinion that the Proposed Assumption is in the best interest of the BAssets Group AUDIT AND RISK MANAGEMENT COMMITTEE S STATEMENT 14.1 The Audit and Risk Management Committee of BAssets, after having considered all aspects of the Proposed Assumption (including but not limited to the rationale and financial effects), is of the opinion that the terms of the Proposed Assumption is fair, reasonable and on normal commercial terms and is not detrimental to the interest of the minority shareholders of BAssets DOCUMENT AVAILABLE FOR INSPECTION 15.1 A copy each of the Novation Deed and the SPA are available for public inspection at the Registered Office of BAssets at Lot 13-01A, 13 th Floor (East Wing), Berjaya Times Square, No.1, Jalan Imbi, Kuala Lumpur during normal office hours from Monday to Friday (except public holidays) for a period of three (3) months from the date of this Announcement. This Announcement is dated 29 April 2015.