BINASAT COMMUNICATIONS BERHAD ( BINASAT OR THE COMPANY ) - SUBLEASE OF LAND FROM TECHNOLOGY PARK MALAYSIA CORPORATION SDN BHD

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1 BINASAT COMMUNICATIONS BERHAD ( BINASAT OR THE COMPANY ) - SUBLEASE OF LAND FROM TECHNOLOGY PARK MALAYSIA CORPORATION SDN BHD 1. INTRODUCTION The Board of Directors of Binasat Communications Berhad ( Binasat or the Company ) wishes to announce that the Company had on 23 March 2018 accepted the offer from Technology Park Malaysia Corporation Sdn Bhd for the sub-leasing of a portion of land in Technology Park Malaysia Bukit Jalil held under Lot No. PT 13824, HS(D) , Mukim Petaling, District of Petaling, State of Wilayah Persekutuan ( the Land ) for a total sublease consideration amounting to RM6,272, ( Sub-Lease Consideration ) ( the Sub- Lease ) subject to the terms and conditions set out in the Letter of Offer dated 14 March 2018 ( Letter of Offer ). 2. INFORMATION ON TECHNOLOGY PARK MALAYSIA CORPORATION SDN BHD ( TPMC ) TPMC is a private limited company incorporated in Malaysia on 10 February The total issued share capital is RM59,691, comprising 59,691,502 ordinary shares. The shareholders of TPMC are Kementerian Kewangan (59,691,501 ordinary shares) and Federal Land Commissioner (1 ordinary share). The current Directors of TPMC are YB Dato Ahmad Fauzi bin Zahari, Dato Ir Haji Mohd Azman bin Shahidin, Datuk Seri Syed Ali bin Tan Sri Syed Abbas Alhabshee, Ir. Abd Rashid bin Md. Sidek, Dato Sri Dr. Sallehuddin bin Ishak, Datuk Seri Dr. Mohd Azhar bin Yahaya, En. Tajol Azhar bin Md. Tahir, En. Novie bin TA and Datuk Kua Abun (alternate director to Datuk Seri Dr. Mohd Azhar bin Yahaya). The principal activities of TPMC are the provision of rental of incubator and business premises and sub-lease of land parcels for technology-based companies, business and technical training and consultancy for R&D commercialisation via technology and business incubation, product development, laboratory and contract manufacturing services, engineering design and solution, CNC machining, rapid prototyping and provision of network services and ICT project management. 3. RATIONALE FOR THE SUB-LEASE OF LAND As set out in the prospectus of the Company dated 13 December 2017 ( Prospectus ) pursuant to the listing of Binasat on the ACE Market of Bursa Malaysia Securities Berhad, the Company plans to own and operate a new teleport in the Klang Valley, Malaysia. The Land will be used for the setting up of the teleport. 1

2 Binasat has obtained the requisite licences to set up a teleport and to use it to provide network related services. With the setting up of the teleport, the Company expects to provide new services to customers, such as satellite downlink services for video content, managed satellite network services, uplink and downlink services to send and receive video data between Malaysia, and other countries and regions thereby creating opportunities for new revenue streams. The Sub-Lease of Land is in line with the Group s strategy of expanding the business operations of the Company as set out in the Prospectus. 4. DETAILS OF THE SUB-LEASE OF LAND 4.1 Information of the Land Lot No. and Description Land Area : Part of Land held under Lot No. PT 13824, HS(D) , Mukim Petaling, District of Petaling, State of Wilayah Persekutuan : Approximately 1.60 acres (equivalent to approximately 69,696 sq feet) 4.2 Salient Terms of the Sub-Lease Sub-Lease Consideration The Sub-Lease Consideration amounting to RM6,272,640.00, calculated at the rate of RM90.00 per square foot excluding Goods and Services Tax and any other government tax levies and duties applicable Terms of Payment The total Sub-Lease Consideration amounting to RM6,272, for the total Sub-Lease period of 60 years ( Sub-Lease Period ) shall be paid according to the following manner:- a. RM627, representing 10% of the total Sub-Lease Consideration to be paid within fourteen (14) days upon acceptance of the Letter of Offer; and b. The balance of RM5,645, representing 90% of the total Sub-Lease Consideration to be paid beginning in the 4 th year of the Sub-Lease Period payable in 27 years instalment term. 2

3 4.2.3 Sub-Lease Period The Sub-Lease shall be for a period of sixty (60) years commencing from the delivery of vacant possession. In accordance with the National Land Code 1965, the sub-lease shall be registered in favour of the Company for a period of thirty (30) years with an extension of a further thirty (30) years Conditions Precedent The Sub-Lease shall be conditional upon the following approvals being obtained within 3 months from the date of the Letter of Offer (or any extension of the time mutually agreed by both parties): (i) (ii) (iii) Approval from the Board of Directors of TPMC; Approval from the Federal Land Commissioner; and There being no objection to the Sub-Lease from Astro Productions Sdn Bhd ( Astro ). If any of the Conditions Precedent above is not fulfilled within the prescribed time or such extended period of time, the Letter of Offer or the Sub-Lease Agreement (as the case may be) shall be terminated and TPMC shall refund all sums paid as the date of such termination free of interest within a period of 30 days from the termination Other Conditions (i) (ii) (iii) (iv) Binasat shall obtain the prior written approval from TPMC (and/or the Federal Lands Commissioner, as the case may be) for any construction and building works on the said Land. Binasat shall bear the cost of the re-location of Astro s (being the tenant of the Land) current parking facility situated on the Land including but not limited to the construction of the parking facility and the fencing thereof in no less condition that the present facility enjoyed by Astro, if requested by Astro. Binasat shall be liable for the payment of all quit rent, assessment, taxes and other outgoing in respect of the Land during the Sub-Lease period. Binasat shall obtain the consent, licenses, approvals and permits as required by law to carry on its business. 3

4 (v) Binasat shall commence construction of buildings on the Land within 12 months from the date of the Development Order (or any extension of time mutually agreed by both parties). If Binasat fails to commence the construction within the prescribed time, TPMC shall be entitled to terminate the Letter of Offer or the Sub-Lease Agreement and forfeit 10% of the Sub-Lease Consideration paid as liquidated damages. (vi) The Letter of Offer for the Sub-Lease and/or the Sub-Lease Agreement may be terminated by TPMC giving not less than six months prior notice in writing to Binasat in the event the Head Lease is terminated by the Federal Lands Commissioner. 5. BASIS OF ARRIVING AT THE SUB-LEASE CONSIDERATION The sub-lease consideration was arrived at based on a willing-buyer-willing-seller basis upon negotiation with TPMC and after taking into consideration the strategic location within the Technology Park Malaysia Bukit Jalil, with its infrastructure and facilities that fulfil the needs of Binasat. 6. SOURCE OF FUNDING As set out in the Prospectus, the Company had allocated RM14.36 million from the Initial Public Offering ( IPO ) proceeds to set up the new teleport. As such, the Company shall utilise a part of the gross proceeds raised from the IPO for the Sub-Lease of Land. 7. ESTIMATED TIMEFRAME FOR EXECUTION OF SUB-LEASE AGREEMENT The Company shall within thirty (30) days from the date of the Letter of Offer, execute Sub- Lease Agreement as prepared by TPMC. TPMC reserves the right to extend the deadline for the execution of the Sub-Lease Agreement. Further announcements will be made to Bursa Malaysia Securities Berhad upon execution of the Sub-Lease Agreement. 8. FINANCIAL EFFECTS The Sub-Lease of Land will not have any material effect on the share capital, substantial shareholders shareholding, net assets per share and gearing and earning per share of Binasat for the financial year ending 30 June RISK FACTOR The Company does not foresee any material risks in relation to the above transaction other than changes in laws or regulations, the operational risks associated with the contract and inherent risks associated with the industry. 4

5 10. HIGHEST PERCENTAGE RATIO The highest percentage ratio applicable to the transactions in relation to the above pursuant to paragraph 10.02(g) of the ACE Market Listing Requirement of Bursa Malaysia Securities Berhad is 24.5% based on the Audited Financial Statements of the Company for the financial period ended 30 June APPROVAL REQUIRED The acceptance of the Letter of Offer for the Sub-Lease of Land is not subject to the approval of the shareholders of Binasat. 12. DIRECTORS AND MAJOR SHAREHOLDERS INTERESTS None of the Directors, Major Shareholders, and persons connected with Directors or Major Shareholders of Binasat have any interest, direct or indirect, in the Sublease of Land. 13. STATEMENT OF BOARD OF DIRECTORS The Board of Directors of the Company, having reviewed and considered the terms and conditions of the Letter of Offer, the rationale and the effects of the Sub-Lease of Land, is of the opinion that the acceptance of the Letter of Offer is in the best interest of the Company and the terms and conditions of the Letter of Offer are fair, reasonable and on terms that are not detrimental to the interest of the minority shareholders of the Company. This announcement is dated 23 March