News

Signing Of Sale & Purchase Agreement And Option Agreement

The Board of Directors of ASL Marine Holdings Ltd ("ASL Marine") is pleased to announce that it has, together with its 50% owned associated company, ASL Energy Pte Ltd ("ASL Energy"), today entered into (i) a sale and purchase agreement ("S&P Agreement") and (ii) an option agreement (the "Option Agreement") with Oriental Mineral Corporation (the "Vendor"), Manhattan Investments Pte Ltd ("Manhattan Investments") and Pan Assets International Limited ("Pan Assets") in connection with the proposed acquisition of issued share capital of Pan Assets by ASL Energy

PT. Fajar Sakti Prima ("FSP") is the holder of a mining concession (the "Concession") located at Tabang, East Kalimantan, Indonesia that was granted by the Indonesian government. PT. FSP has entered into a coal mining agreement with PT. Indonesia Pratama ("IP") pursuant to which FSP granted full authority to IP to conduct mining operations in and marketing of coal (the "Operating and Marketing Rights") for the Concession to IP. Pan Assets has, by way of a novation agreement dated 26 May 2004 entered into between Pan Assets, FSP and IP, acquired the rights to conduct mining operation in and marketing of coal for the Concession.

The Vendor is the legal and beneficial owner of all the issued and paid up share capital in Pan Assets.

i. Rationale

As mentioned in the announcements dated 26 December 2003 and 9 January 2004, the Directors believe that it would be prudent for ASL Energy to secure strategic stakes in the supply chain for coal which it currently has no control over. This is in order to ensure a minimal level of utilisation of the proposed 40 tugs and 40 barges to be deployed by ASL Energy. Accordingly, the Directors believe that it would be advantageous for ASL Energy to acquire an interest in the exclusive rights to conduct mining operations in and marketing of coal for the Concession, through the acquisition of an interest in Pan Assets.

ii. S&P Agreement

Consideration

Under the S&P Agreement, ASL Energy will acquire 50.2% of the issued and paid up share capital in Pan Assets (the "Sale Shares") from Vendor for an aggregate purchase consideration of S$20,080,000.00 (the "S&P Consideration").

To satisfy the consideration payable under the S&P Agreement, ASL Energy will make a call on each of its shareholders, ASL Marine and Manhattan Investments, to subscribe for additional shares in ASL Energy, with the subscription amounts for such additional shares in ASL Energy to be satisfied as follows:

a. ASL Marine: the issue and allotment of 20,080,000 new shares in the capital of ASL Marine (the "S&P Consideration Shares") at an issue price of S$0.50 per S&P Consideration Share, credited as fully paid-up and ranking pari passu in all respects with the existing shares in the capital of ASL Marine at the date of issue ;

b. Manhattan Investments: the issue by Manhattan Investments of a promissory note made in favour of the Vendor, in such form acceptable to the Vendor, for the sum of S$10,040,000.00.

S$10,040,000.00 of the S&P Consideration will accordingly be satisfied by the issue by ASL Marine of the S&P Consideration Shares to the Vendor and the balance S$10,040,000.00 of the S&P Consideration will be satisfied by the issue by Manhattan Investments of a promissory note made in favour of the Vendor.

Conditions precedent

The acquisition of the Sale Shares is conditional upon the following:

a. ASL Energy and ASL Marine, their representatives and advisors complete a due diligence exercise on Pan Assets and its assets, including but not limited to the Operating and Marketing Rights, and the results of such due diligence exercise are satisfactory to ASL Energy and ASL Marine in ASL Energy's and ASL Marine's sole discretion;

b. the approval in-principle of the SGX-ST has obtained in connection with the transactions contemplated herein, including without limitation, for the listing and quotation of the ASL Marine Shares to be issued in satisfaction of the S&P Consideration, such approval not having been withdrawn prior to completion, and where such approval in-principle is obtained subject to any conditions, such conditions being complied with by completion;

c. if necessary, the approval of the shareholders of ASL Marine in general meeting being obtained for the transactions referred to herein including, without limitation, the purchase of the Sale Shares and the allotment and issue of the S&P Consideration Shares, in favour of the Vendor;

d. all necessary consents or approvals, if any, from third parties or governmental or regulatory bodies or competent authorities having jurisdiction over the sale of the Sale Shares or the transactions contemplated under this Agreement (including without limitation but only where required, by the SGX-ST and the relevant licensing authorities) and where any such consent or approval is subject to any conditions, such conditions being reasonably acceptable to the party on which they are imposed, and if such conditions are required to be fulfilled before completion, such conditions being fulfilled before completion, as the case may be, and such consents or approvals not being revoked or repealed on or before completion, as the case may be.

In the event that any of the conditions precedent referred to above are not fulfilled or the condition set out in (a) is not waived by ASL Energy, on or before 30 June 2004, the S&P Agreement shall lapse and cease to have further effect and all obligations and liabilities of the parties shall cease and determine and no party shall have any claim against the others for costs, damages, compensation or otherwise, save when such non-fulfilment is caused by the default of any of the parties as the case may be.

The due diligence exercise on Pan Assets and its assets commissioned by ASL Energy and ASL Marine has at the date hereof been satisfactorily completed. ASL Energy has also commissioned a technical evaluation report on the coal mine located in Tabang, East Kalimantan, Indonesia which has at the date hereof been satisfactorily completed.

As the relative figures computed on the bases set out in Rule 1006 of the SGX-ST Listing Manual do not exceed 20% (see below), shareholders approval in general meeting is not required for the acquisition of the Sale Shares.

Other salient terms

The Vendor undertakes to procure Pan Assets to sub-contract the mining and marketing of coal of the Concession up till 30 June 2009 and the Vendor warrants to and undertakes with ASL Energy that Pan Asset's operating net cash inflow for the following periods shall not be less than the amounts shown opposite such periods:

Period Operating Net Cash Inflow

26 May 2004 to 30 June 2004 US$100,000.00
1 July 2004 to 31 December 2004 US$1,100,000.00
1 January 2005 to 30 June 2005 US$1,200,000.00

1 July 2005 to 31 December 2005 US$1,500,000.00
1 January 2006 to 30 June 2006 US$1,500,000.00
1 July 2006 to 31 December 2006 US$1,800,000.00
1 January 2007 to 30 June 2007 US$1,800,000.00

1 July 2007 to 31 December 2007 US$1,800,000.00
1 January 2008 to 30 June 2008 US$1,800,000.00
1 July 2008 to 31 December 2008 US$1,800,000.00
1 January 2009 to 30 June 2009 US$1,800,000.00

For the above purposes, Pan Assets' operating net cash inflow shall be based on Pan Assets' audited accounts and the half-year unaudited accounts (the "Accounts") which are reviewed by Pan Assets' external auditors, in accordance with the financial reporting standards (FRS).

In the event Pan Assets' operating net cash inflow for the periods set out above is less than the amounts shown opposite the relevant period, the Vendor shall pay to Pan Assets, no later than 14 days after the figures for the Accounts of Pan Assets for each period have been prepared and submitted to Pan Assets by its external auditors, the sum equivalent to the shortfall between Pan Assets' actual operating net cash inflow for that relevant period as determined from the Accounts as prepared by Pan Assets external auditors and the amount shown opposite the relevant period.

Financial effects of the transaction

Net Tangible Asset:

For illustration purposes only and assuming the acquisition of the Sale Shares has been completed on 30 June 2003, the effect of the acquisition of the Sale Shares on the consolidated net tangible asset ("NTA") of the Group, based on the audited consolidated balance sheet of the Group as at 30 June 2003, would have been as follows:




	As at 30 June 2003	Proforma after acquisition of Sale Shares
NTA (S$'000)	50,131	60,171
No. of shares	198,000,000	218,080,000
NTA per share (cents)	25.32	27.59



Earnings per Share:

For illustration purposes only and assuming the acquisition of the Sale Shares has been completed on 1 July 2003, the effect of the Acquisition on the earnings per share ("EPS") of the Group, based on the audited consolidated profit and loss account of the Group for the financial year ended 30 June 2003 ("FY2003"), would have been as follows:



	FY2003	Profoma after acquisition of Sale Shares
EPS (cents)
- basic	5.38	4.81
- diluted	5.38	4.81


Note:
The calculation of earnings per share is based on net profit for the year attributable to ordinary shareholders divided by the weighted average number of ordinary shares in issue during the year. The proforma net profit for the year attributable to ordinary shareholders after the acquisition of Sale Shares is the same as the net profit for FY2003 attributable to ordinary shareholders as Pan Assets is a newly incorporated company and has no attributable profit/loss prior to acquisition.
Weighted average number of ordinary shares for FY2003 is 168,833,333 and for Proforma after acquisition of Sale Shares is 188,913,333.

Relative figures computed on bases set out in Rule 1006 of the SGX-ST Listing Manual

a. Net asset value of assets disposed of compared with the group's net asset value: Not applicable as proposed transaction is an acquisition.

b. Net profits attributable to assets acquired compared with the group's net profits:

Not applicable as Pan Assets is newly incorporated, as such there is no net profit attributable to the assets acquired.



c. aggregate value of consideration given compared with the issuer's market capitalization = 9.1%

Note:
The market capitalization is calculated based on multiplying the number of shares in issue prior to the acquisition by the weighted average price of the shares transacted on the market day preceding the date of the S&P and Option Agreements

d. Number of equity securities issued by the issuer as consideration for an acquisition,
compared with the number of equity securities previously in issue = 10.1%

iii. Option Agreement

Consideration

Under the Option Agreement, the Vendor has granted ASL Energy an option to require the Vendor to sell to ASL Energy 49.8% of the issued and paid up share capital in Pan Assets, or any part thereof (the "Option Shares") from Vendor for an aggregate exercise price of S$19,920,000.00, or such prorated amount (the "Option Consideration"). The option period commences on the date of the execution of the Option agreement and will end at 5.00 pm on 31 July 2005 (or such later date as ASL Energy and the Vendor may agree in writing). The option is only exercisable by ASL Energy and the Vendor does not have the right under the Option Agreement to require ASL Energy to purchase the Option Shares.

To satisfy the Option Consideration payable under the S&P Agreement, ASL Energy will make a call on each of its shareholders, ASL Marine and Manhattan Investments, to subscribe for additional shares in ASL Energy, with the subscription amounts for such additional shares in ASL Energy to be satisfied as follows:

a. ASL Marine: either (i) the issue and allotment of such number of new shares in the capital of ASL Marine (the "Option Consideration Shares") at an issue price which is set at 10% discount to the Market Price, credited as fully paid-up and ranking pari passu in all respects with the existing shares in the capital of ASL Marine at the date of issue or (ii) cash. The manner of satisfaction of the subscription amounts will be at ASL Marine's sole discretion;

b. Manhattan Investments: the issue by Manhattan Investments of a promissory note made in favour of the Vendor, in such form acceptable to the Vendor, for the sum of 50% of the Option Consideration.

50% of the Option Consideration will accordingly be satisfied by the issue by ASL Marine of the Option Consideration Shares to the Vendor or payment by ASL Marine in cash to the Vendor for the account of ASL Energy and the balance 50% of the Option Consideration will be satisfied by the issue by Manhattan Investments of a promissory note made in favour of the Vendor.

Conditions precedent

The acquisition of the Sale Shares is conditional upon the following:

a. ASL Energy and ASL Marine, their representatives and advisors complete a due diligence exercise on Pan Assets and its assets, including but not limited to the Operating and Marketing Rights, and the results of such due diligence exercise are satisfactory to ASL Energy and ASL Marine in ASL Energy's and ASL Marine's sole discretion;

b. the approval in-principle of the SGX-ST has obtained in connection with the transactions contemplated herein, including without limitation, for the listing and quotation of the ASL Marine Shares to be issued in satisfaction of the Option Consideration, such approval not having been withdrawn prior to completion, and where such approval in-principle is obtained subject to any conditions, such conditions being complied with by completion;

c. if necessary, the approval of the shareholders of ASL Marine in general meeting being obtained for the transactions referred to herein including, without limitation, the purchase of the Option Shares and the allotment and issue of the Option Consideration Shares, in favour of the Vendor;

d. all necessary consents or approvals, if any, from third parties or governmental or regulatory bodies or competent authorities having jurisdiction over the sale of the Option Shares or the transactions contemplated under this Agreement (including without limitation but only where required, by the SGX-ST and the relevant licensing authorities) and where any such consent or approval is subject to any conditions, such conditions being reasonably acceptable to the party on which they are imposed, and if such conditions are required to be fulfilled before completion, such conditions being fulfilled before completion, as the case may be, and such consents or approvals not being revoked or repealed on or before completion, as the case may be.

In the event that any of the conditions precedent referred to above are not fulfilled or the condition set out in (a) is not waived by ASL Energy, on or before 31 July 2005, the Option Agreement shall lapse and cease to have further effect and all obligations and liabilities of the parties shall cease and determine and no party shall have any claim against the others for costs, damages, compensation or otherwise, save when such non-fulfilment is caused by the default of any of the parties as the case may be.

The due diligence exercise on Pan Assets and its assets commissioned by ASL Energy and ASL Marine has at the date hereof been satisfactorily completed. ASL Energy has also commissioned a technical evaluation report on the coal mine located in Tabang, East Kalimantan, Indonesia which has at the date hereof been satisfactorily completed.

Other salient terms

The Vendor undertakes to procure Pan Assets to sub-contract the mining and marketing of coal of the Concession up till 30 June 2009 and the Vendor warrants to and undertakes with ASL Energy that Pan Asset's operating net cash inflow for the following periods shall not be less than the amounts shown opposite such periods:

Period Operating Net Cash Inflow

26 May 2004 to 30 June 2004 US$100,000.00
1 July 2004 to 31 December 2004 US$1,100,000.00
1 January 2005 to 30 June 2005 US$1,200,000.00

1 July 2005 to 31 December 2005 US$1,500,000.00
1 January 2006 to 30 June 2006 US$1,500,000.00
1 July 2006 to 31 December 2006 US$1,800,000.00
1 January 2007 to 30 June 2007 US$1,800,000.00

1 July 2007 to 31 December 2007 US$1,800,000.00
1 January 2008 to 30 June 2008 US$1,800,000.00
1 July 2008 to 31 December 2008 US$1,800,000.00
1 January 2009 to 30 June 2009 US$1,800,000.00

For the above purposes, Pan Assets' operating net cash inflow shall be based on Pan Assets' audited accounts and the half-year unaudited accounts (the "Accounts") which are reviewed by Pan Assets' external auditors, in accordance with the financial reporting standards (FRS).

In the event Pan Assets' operating net cash inflow for the periods set out above is less than the amounts shown opposite the relevant period, the Vendor shall pay to Pan Assets, no later than 14 days after the figures for the Accounts of Pan Assets for each period have been prepared and submitted to Pan Assets by its external auditors, the sum equivalent to the shortfall between Pan Assets' actual operating net cash inflow for that relevant period as determined from the Accounts as prepared by Pan Assets external auditors and the amount shown opposite the relevant period.

For the avoidance of doubt, the aforementioned warranty and undertaking given by the Vendor to Pan Assets on the operating net cash inflow are not in addition to the warranty and undertaking given under the S&P Agreement.

The option is only exercisable by ASL Energy and the Vendor does not have the right under the Option Agreement to require ASL Energy to purchase the Option Shares. In the event ASL Energy decides to exercise the option under the Option Agreement, shareholders approval, if required pursuant to the rules of the SGX-ST Listing Manual, will be obtained. ASL Marine will make further announcements relating to the exercise of the option under the Option Agreement when appropriate.

iv. Interests of the Directors and controlling shareholders

None of the Directors of ASL Marine has any interest, direct or indirect, in the above matter. As far as the Directors are aware, no controlling shareholder of ASL Marine has an interest, direct or indirect, in the above matter and the Directors have not received any notification of any interest in the above matter from any controlling shareholder.

v. Inspection of Documents

A copy of the S&P Agreement and the Option Agreement are available for inspection at the Registered Office of the Company at 19 Pandan Road, Singapore 609271 during normal business hours for three months from the date of this Announcement.

BY ORDER OF THE BOARD


Ang Kok Tian
Chairman and Managing Director

26 May 2004