UTUSAN MELAYU (MALAYSIA) BERHAD

UTUSAN MELAYU (MALAYSIA) BERHAD - PROPOSED DISPOSAL OF 60,000 ORDINARY SHARES OF RM1.00 EACH IN UTUSAN STUDIOS SDN BHD, A WHOLLY-OWNED SUBSIDIARY OF THE COMPANY TO RAWDAH S&S SDN BHD FOR A TOTAL CONSIDERATION OF RM60,000 1. INTRODUCTION The Board of Directors of Utusan Melayu (Malaysia) Berhad ('Utusan' or the Company or 'the Vendor') is pleased to announce that it has on 19 September 2017 entered into a Share Sale Agreement ('the Agreement') with Rawdah S&S Sdn Bhd (Company No.: 1213254-X) ('Rawdah' or 'the Purchaser') for the disposal of 60,000 ordinary shares of RM1.00 each ('the Sale Shares') which represent 60% of the total issued and paid-up capital ( the Sale Shares ) in its wholly-owned subsidiary, Utusan Studios Sdn Bhd (Company No.: 266339-A) ('Utusan Studios') for the purchase consideration of RM60,000.00 (Ringgit Malaysia : Sixty Thousand) only ('the Consideration') ( Proposed Disposal ), upon such terms and subject to the conditions contained in the Agreement. Upon completion of the Proposed Disposal, Utusan Studios will cease to be a subsidiary, but it will become an associate company of Utusan. 2. BACKGROUND 2.1. Information on Utusan Studios Utusan Studios is a private limited company incorporated in Malaysia, being a wholly-owned subsidiary of Utusan and having its registered address at No. 44, Jalan Utusan, Off Jalan Chan Sow Lin, 55200 Kuala Lumpur, is principally engaged in the business of video production and editing. The present paid-up share capital of Utusan Studios is RM100,000. 2.2. Information on Rawdah Rawdah is a private limited company incorporated in Malaysia and having its registered address at No. 30A, Jalan BRP 1/2, Bukit Rahman Putra, 47000 Sungai Buloh, Selangor Darul Ehsan is principally engaged in the business of property unit trust, real estate activities with own land or leased property and investment advisory services. The directors of Rawdah are as follows : (a) Mohd Norsadiq Bin Mohd Yusof; and (b) Muhammad Syafiq Bin Musa 1

The shareholders and their respective shareholdings in Rawdah are as follows : Shareholders Shareholdings No. of Shares % Mohd Norsadiq Bin Mohd Yusof 6,000,000 50 Muhammad Syafiq Bin Musa 6,000,000 50 Total 12,000,000 100 3. SALIENT TERMS OF THE AGREEMENT 3.1. SALE AND PURCHASE OF THE SALE SHARES Subject to and upon the terms and conditions contained in the Agreement, the Vendor shall, as legal and beneficial owner, sell the number of Sale Shares and the Purchaser, in full reliance upon the Vendor s Warranties, shall purchase the Sale Shares, free from any Security Interest and with all rights, benefits and entitlements attaching to the Sale Shares and accruing as at and from the Completion Date (including the right to receive all dividends or distributions declared, made or paid on or after the Completion) on the terms and subject to the conditions contained in this Agreement 3.2. CONSIDERATION The aggregate consideration for the purchase of the Sale Shares and payable by the Purchaser to the Vendor shall be an aggregate sum of Ringgit Malaysia Sixty Thousand (RM60,000) only. 3.3. PENDING COMPLETION During the period commencing on the date of the Agreement up to and including the Completion Date the Vendor agrees and undertakes with the Purchaser, that save with the prior written consent of the Purchaser, the consent of which will not be unreasonably withheld, the Vendor will cause and will procure that the Company complies with the provisions in Schedule 1 of the Agreement. 3.4. RELEASE OF VENDOR S DOCUMENTS The Solicitors are hereby authorised by the Vendor and the Purchaser (collectively known as the Parties and singly as the Party ) to submit the instrument and documents for the transfer and registration of the Sale Shares to the company secretary of the Company upon the perfection of the transfer form and Consideration being remitted to the Vendor and the Vendor hereby undertakes to procure the company secretary to effect and register the transfer of the Sale Shares and issue the new share certificate under the name of the Purchaser or its nominee within seven (7) days from the date such instrument and documents for the transfer is submitted by the Solicitors to the company secretary. 2

3.5. DATE OF COMPLETION The Completion of the Agreement shall take place on the date when the Sale Shares are successfully registered in the name of the Purchaser or its nominee accordingly and the issuance of the new original share certificate of the Sale Shares in favour of the Purchaser ( the Completion Date ). 3.6. WARRANTIES, REPRESENTATIONS AND UNDERTAKINGS 3.6.1. Vendor s Warranties i) The Vendor represents, warrants and undertakes to the Purchaser in the terms set out in Schedule 2 of the Agreement ( Schedule 2 ) and that each of the statements set out in the Schedule 2 is now true, complete and accurate in all respects and not misleading in any respect as of the date of the Agreement. ii) The Vendor also warrant that such representations, warranties and covenants of the Vendor remaining true and accurate and having been fulfilled or performed in all material respects on each day from the date of the Agreement and the Completion Date. 3.6.2. Purchaser s Warranties The Purchaser warrants and undertakes to the Vendor that:- a) it is a company duly incorporated and validly existing under the laws of Malaysia; b) it has full power and authority to own the Sale Shares; c) it has taken all necessary action to authorise the execution, delivery and performance of this Agreement and the arrangements set out in and arising from this Agreement; and d) it has the legal right and full power and authority, and no further action, approval or consent is required to be taken or obtained for it, to enter into and perform this Agreement, which when executed will constitute valid and binding obligations on the Purchaser, in accordance with their respective terms. 3

3.7. TERMINATION OF THE AGREEMENT 3.7.1. If for any reason whatsoever, other than due to the default on part of the Purchaser, the Agreement and/or the Proposed Disposal herein is rendered void or illegal, whether prior to or after its due completion, and the transfer of the Sale Shares favouring the Purchaser cannot be carried out or even if carried out, it is rendered void or illegal thereby causing the Purchaser to lose ownership of the Sale Shares, then the Vendor shall refund to the Purchaser all monies paid by the Purchaser to the Vendor towards the account of the Consideration no later than thirty (30) days from the date the Agreement or the transfer of the Sale Shares is rendered void/illegal failing which an interest of eight percent (8%) per annum calculated on daily basis shall be chargeable on the aggregate of the aforesaid amounts until full settlement thereof by the Vendor. 3.7.2. Upon the termination of the Agreement, none of the Parties shall have any claim against the others for costs, damages, compensation or otherwise, save for any claim by the terminating against the defaulting Party (as the case may be) for costs and expenses incurred by the terminating Party up to the termination of the Agreement. 3.7.3. Any failure by either Party entitled to exercise the right to terminate the Agreement under any provisions of the Agreement shall not, following Completion Date, constitute a waiver of any other rights of the Party arising out of any breach of any Vendor's Warranty or the Purchaser s Warranties (as the case may be), or any undertakings of any Vendor or the Purchaser (as the case may be) under the Agreement. 3.7.4. Notwithstanding the rights of termination set out in the Agreement, the Parties will, prior to termination of the Agreement, use their best endeavours and take such actions as may be necessary and equitable to negotiate on such terms with the principle of good faith with fairness and without detriment to the interests of any of them. 3.8. COSTS Each Party shall bear its own legal, professional and other costs and expenses incurred by it in connection with the negotiation, preparation or completion of the Agreement, and the sale and purchase of the Sale Shares. The Purchaser shall bear all stamp duties payable in connection with the Agreement and the transfer of the Sale Shares from the Vendor to the Purchaser. 4

3.9. FURTHER ASSURANCE Each of the Parties shall, and shall use reasonable endeavours to procure that any necessary third Party shall, from time to time following Completion Date execute such documents and perform such acts (including, in the case of the Vendors, exercising their respective voting rights over the Sale Shares) and things as the other Parties may reasonably require to transfer the Sale Shares to the Purchaser and to give each Party the full benefit of this Agreement. 4. BASIS OF ARRIVING AT THE SALE PRICE The Sale Price was based on the value of the shares at RM1.00 each. 5. UTILISATION OF PROCEEDS FROM THE DISPOSAL The proceeds arising from the Proposed Disposal is expected to be utilized for working capital purposes of the Group. 6. FINANCIAL EFFECTS The Financial effects of the Proposed Disposal are set out below: 6.1. Share capital and shareholdings of substantial shareholders The Proposed Disposal will not have any effect on the issued and paid-up share capital and shareholdings of the substantial shareholders of Utusan. 6.2. Earnings The Proposed Disposal will not have material effect on the earnings of the Group for the financial year ending 31 December 2017. 6.3. Net Assets The Proposed Disposal will not have material effect on the net assets of the Group for the financial year ending 31 December 2017. 6.4. Gearing The Proposed Disposal will not have material effect on the gearing of the Group for the financial year ending 31 December 2017. 5

7. RATIONALE FOR THE PROPOSED DISPOSAL The Proposed Disposal is part of the Utusan Group's business streamlining strategy and in the best interests of Utusan Group. 8. APPLICABLE PERCENTAGE RATIOS The highest percentage ratio applicable to the Proposed Disposal pursuant to Paragraph 10.02(g) of the Main Market Listing Requirements of Bursa Malaysia Securities Berhad is 0.06% based on the audited consolidated financial statements of Utusan for the financial year ended 31 December 2016. 9. DIRECTORS AND MAJOR SHAREHOLDERS' INTERESTS None of the Directors and substantial shareholders of Utusan has any interest, direct or indirect, in the disposal of shares. 10. APPROVAL REQUIRED The Proposed Disposal is not subject to the approval of shareholders or any governmental or regulatory authorities. 11. DOCUMENTS FOR INSPECTION A copy of the Share Sale Agreement will be made available for inspection at the Corporate Office of Utusan at Level 5, Block A, No. 44, Jalan Utusan Off Jalan Chan Sow Lin, 55200 Kuala Lumpur during normal business 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 19 September 2017. 6