PELIKAN INTERNATIONAL CORPORATION BERHAD (“” or “Company”)

PROPOSED INTERNAL REORGANISATION OF PELIKAN’S BUSINESS IN (“PROPOSED REORGANISATION”)

1 INTRODUCTION

The Board of Directors of Pelikan (“Board”) wishes to announce that it has on 3 October 2013 written to the Management Board of Aktiengesellschaft (“Herlitz AG”) regarding Pelikan’s proposal to the Management Board of Herlitz AG (“Management Board”) to enable Herlitz AG to expedite the completion of the Proposed Reorganisation as the ongoing proposal to set-up a joint venture company to merge the Pelikan German and Herlitz German operations has taken too long to complete due to the complexities of such joint venture structure.

2 DETAILS OF THE PROPOSED REORGANISATION

Pelikan’s proposal to the Management Board would entail the following:-

(a) Acquisition by Pelikan or its nominated subsidiaries of the German and business (including all customer base, relationships, intellectual properties, fixed assets, inventories, trade debtors and selected payables) from Herlitz PBS Aktiengesellschaft papier-,Büro-Und Schreibwaren (“Herlitz PBS”), a wholly-owned subsidiary of Herlitz; and

(b) Acquisition by Pelikan or its nominated subsidiaries all active services companies in the area of logistics from Herlitz PBS;

Pelikan and the Herlitz Management shall agree on the final terms of the Proposed Reorganisation by 31 October 2013 and thereafter sign the necessary definitive agreements. A further announcement will be made by Pelikan upon signing of the definitive agreements related to the Proposed Reorganisation.

3 RATIONALE OF THE PROPOSED REORGANISATION

The interest of Pelikan in Herlitz was acquired in March 2010. Since then, the Herlitz Group had implemented some standalone restructurings and also some form of integration with Pelikan for its and Benelux operations. The key market of Herlitz and Pelikan which is Germany continues to be operated under different set of management, administration and organisation.

As Pelikan is also operating its own sales organization for the German market under the Pelikan Holding AG Group, a 96.45% subsidiary of Pelikan, it is imperative for the Pelikan Group to integrate the entire German business, to enable the German operations to operate profitably and efficiently as one. The Herlitz Group on a standalone basis has historically made the following losses since the completion of the acquisition by Pelikan:-

Audited Year Ended 31 December 2010 2011 2012 * EUR'000 RM'000 EUR'000 RM'000 EUR'000 RM'000

Revenue 233,780 993,495 228,880 979,286 164,395 656,577

EBITDA 1,522 6,468 (3,710) (15,874) (10,027) (40,047)

EBIT (1,918) (8,151) (7,010) (29,993) (11,688) (46,681)

Loss before taxation (3,557) (15,116) (9,543) (40,831) (12,666) (50,587)

Loss after tax (3,981) (16,918) (9,818) (42,007) (13,190) (52,680)

Notes:-

* Disclosed on a continuing operations basis.

^ Converted at exchange rate 2010 = RM4.2497/EUR, 2011 = RM4.2786/EUR and 2012 = RM3.9939/EUR

The Proposed Reorganisation is expected to cut the losses which are being made by the Herlitz Group on a standalone basis. In addition, the Proposed Reorganisation will enable the Pelikan Group to consolidate its core market operations under one organization and one management to achieve economies of scale in its operations and improve business efficiency. It will also enable the Group to streamline its operation processes to bring more efficient and effective management and cost savings in the overall Group administration. Such organization structure will also be more adaptive to the market environment and aligned to its customer needs and hence, provide the Group with more competitive edge.

Pelikan is also the owner of the logistics centre in via its 98.52% subsidiary Molkari Vermietungsgesellschaft mbH Objekt Falkensee KG (“Molkari”). The integration of the logistics operations of Herlitz under Molkari would in the long term benefit the Pelikan Group as it provides it with an integrated logistics service company with both a logistics facility and a service company which operates as a logistics service provider that business can be expanded both internally within the Group and to external parties.

4 FINANCIAL EFFECTS

4.1 Share Capital and Substantial Shareholders’ Shareholdings

The Proposed Reorganisation will not have any effect on the issued and paid-up share capital of Pelikan and the shareholdings of the substantial shareholders of Pelikan.

4.2 Net Assets

The effects on Proposed Reorganisation will be determined upon the finalization of the terms of the transaction.

4.3 Earnings

The Proposed Reorganisation is not expected to have a material effect on the earnings of the Pelikan Group for the financial year ending 31 December 2013 as it is expected to be completed towards the year end. However, the Proposed Reorganisation is expected to contribute positively to the earnings of the Pelikan Group going forward.

4.4 Gearing

The Proposed Reorganisation will not have any material effect on the gearing of the Pelikan Group.

5 APPROVALS REQUIRED

The Proposed Reorganisation is not subject to the approval of the shareholders of Pelikan.

6 DIRECTORS’ AND MAJOR SHAREHOLDERS’ INTERESTS

None of the directors and/or major shareholders of Pelikan and/or persons connected to them have any interest, direct or indirect, in the Proposed Reorganisation.

7 DIRECTORS’ RECOMMENDATION

The Directors of Pelikan, are of the opinion that the Proposed Reorganisation are in the best interest of the Company.

8 OTHER MATTERS

8.1 Estimated timeframe for completion

The Proposed Reorganisation is expected to be completed on or before 31 December 2013.

8.2 Any departure from Securities Commission’s Policies and Guidelines on Issue/ Offer of Securities

The Proposed Reorganisation does not depart from the Securities Commission’s Policies and Guidelines on Issue/Offer of Securities.

This announcement is dated 3 October 2013.