SUNWAY BERHAD (“SUNWAY”)  PROPOSED ACQUISITION OF LAND BY SUNWAY SUPPLY CHAIN ENTERPRISE SDN BHD, A SUBSIDIARY

1. INTRODUCTION

The Board of Directors of Sunway wishes to announce that Sunway Supply Chain Enterprise Sdn Bhd (“SSCE”), a wholly-owned subsidiary of Sunway Holdings Sdn Bhd which in turn is a wholly-owned subsidiary of Sunway, has on 31 July 2017, entered into an agreement (“Agreement”) with Premier Place Property Sdn Bhd (Company No. 1074765-V) (“PPP”), a wholly-owned subsidiary of JAKS Resources Berhad (Company No. 585648-T) whereby PPP and SSCE or its related corporation agree to execute a sale and purchase agreement (“SPA”) within 21 days from the date of the Agreement or such extended time period as the parties shall mutually agree in writing to acquire the following 4 parcels of freehold land totaling 5.988 hectares or 644,575.24 square feet for a total purchase consideration of RM167,589,760/- (excluding Goods and Services Tax) (“Proposed Land Acquisition”):

(i) Geran Mukim 85 Lot 526, Tempat Sungei Penaga, Mukim Damansara, Daerah Petaling, Negeri measuring approximately 1.214 hectares or 130,673.87 square feet (“Land 1”);

(ii) Geran Mukim 84 Lot 527, Tempat Sungei Penaga, Mukim Damansara, Daerah Petaling, Negeri Selangor measuring approximately 1.214 hectares or 130,673.87 square feet (“Land 2”);

(iii) Geran Mukim 83 Lot 528, Tempat Sungei Penaga, Mukim Damansara, Daerah Petaling, Negeri Selangor measuring approximately 1.214 hectares or 130,673.87 square feet (“Land 3”); and

(iv) Geran Mukim 319 Lot 62506 Tempat Sungei Penaga, Pekan , Daerah Petaling, Negeri Selangor measuring approximately 2.346 hectares or 252,553.63 square feet (“Land 4”)

(“Land 1, Land 2, Land 3 and Land 4 shall collectively be referred as “the Lands”).

2. INFORMATION ON SSCE AND PPP

2.1 SSCE

SSCE is a company incorporated in and having its registered office at Level 16, Menara Sunway, Jalan Lagoon Timur, , 47500 Subang Jaya, Selangor Darul Ehsan. The issued and paid-up share capital of SSCE is RM2/- comprising 2 ordinary shares. The intended principal activity of SSCE is property development.

2.2 PPP

PPP is a company incorporated in Malaysia and having its registered office at No. 32, Lorong Angsa, Taman Berkeley, 41150 , Selangor Darul Ehsan. The issued and paid-up share capital of PPP is RM250,000/- comprising 250,000 ordinary shares. The principal activity of PPP is property development.

3. SALIENT TERMS OF THE AGREEMENT

Pursuant to the Agreement, PPP and SSCE or its related corporation agree to execute the SPA within 21 days from the date of the Agreement or such extended time period as the parties shall mutually agree in writing for the Proposed Land Acquisition.

The SPA shall be conditional upon PPP obtaining the approval of the shareholders of JAKS Resources Berhad in a general meeting for the disposal of the Lands by PPP to SSCE within 4 months from the date of the SPA or such extended time period as the parties thereto shall mutually agree in writing. The SPA shall become unconditional upon the fulfilment of this condition precedent and receipt of a written notification of the same by SSCE (“Unconditional Date”).

The total purchase consideration of RM167,589,760/- (excluding Goods and Services Tax) (“Purchase Price”) shall be satisfied by SSCE in the following manner:

(a) Payment of RM3,351,795.20 paid to PPP’s solicitors as stakeholders upon execution of the Agreement which shall be refunded to SSCE in the event the condition precedent is not met; (b) Payment of RM13,407,180.80 shall be paid to PPP’s solicitors as stakeholders upon execution of the SPA which shall be refunded to SSCE in the event the condition precedent is not met; (c) PPP’s solicitors shall release the sums referred above in (a) and (b) to PPP after the Unconditional Date; and (d) Payment of the balance Purchase Price of RM150,830,784/- shall be paid to PPP’s solicitors as stakeholders within 3 months from the Unconditional Date (“Completion Date”). If SSCE fails to pay the balance Purchase Price or any remaining part thereof on or before the Completion Date, an extension period of 1 month shall be granted subject to SSCE paying an interest of 8% per annum on the balance Purchase Price.

4. BASIS OF ARRIVING AT THE PURCHASE CONSIDERATION FOR THE PROPOSED LAND ACQUISITION

The Purchase Price of the Lands has been agreed on a willing buyer willing seller basis and is calculated based on RM260/- per square feet for a total land area of approximately 644,575.24 square feet. The Purchase Price was arrived at after taking into account comparable industrial land transactions and the future development potential of the Lands.

5. LIABILITIES TO BE ASSUMED

There are no liabilities (including contingent liabilities and guarantees) to be assumed by Sunway arising from the Proposed Land Acquisition.

6. RATIONALE

The Proposed Land Acquisition will provide Sunway immediate access to 4 industrial lots which the trading and manufacturing businesses of the Group intend to use in the immediate term as warehouses and storage facilities. Any surplus areas may be leased to external parties. In the medium term, Sunway plans to redevelop the Lands which are strategically located for mixed use development. The Lands are within 500 meters of landmark buildings such as Da Men Mall, Summit USJ, Giant Hypermarket and Mydin Hypermarket. The Lands are also located near public transportation with the South Quay BRT station about 600 meters away and the USJ7 LRT station less than 1 km away. The Lands are easily accessible via major highways like Kesas, NPE and NKVE.

7. PROSPECTS

The Lands' strategic location and easy access to major highways make it a suitable site for storage and warehousing for the Group’s trading and machinery businesses and will minimize transportation costs to clients.

In the longer term, the Lands serve as valuable landbank for the property development division as it is close enough to Sunway City to be an extension of the Group's township. In addition, it is currently well served by amenities like malls and public transportation while the immediate vicinity which currently comprise industrial warehouse are also undergoing gentrification. It is estimated that the gross development value for the future developments on the Lands will potentially be at least RM1.4 billion.

8. RISK FACTORS

When the Lands are developed, any proposed development are subject to the usual risks inherent in the property development and construction industries, which include but are not limited to competition risks, unstable global and domestic economic conditions, currency fluctuations, unfavourable interest rate movements, inflation hike, shortages of raw materials and labour, increase in the cost of capital, political instability, changes in government initiatives, changes in statutory regulations and legal disputes.

Sunway, with many years of experience in the business of property development and construction, will take the necessary steps to mitigate the various risks identified. However, no assurance can be given that significant changes in any of these factors will not materially affect Sunway’s operations and financial performance.

9. SOURCE OF FUNDS

The Proposed Land Acquisition will be funded through bank borrowings and internally generated funds.

10. EFFECTS OF THE PROPOSED LAND ACQUISITION

10.1 On Share Capital and Substantial Shareholders’ Shareholding

The Proposed Land Acquisition will not have any effect on the share capital and substantial shareholders' shareholding of Sunway as the Proposed Land Acquisition does not involve any allotment or issuance of new shares by Sunway.

10.2 On Earnings Per Share, Net Assets Per Share and Gearing

The Proposed Land Acquisition is not expected to have any immediate material effect on the earnings per share, net assets per share and gearing of Sunway for the financial year ending 31 December 2017. However, the Proposed Land Acquisition is expected to contribute positively to the future earnings of Sunway Group.

11. APPROVAL REQUIRED

The Proposed Land Acquisition does not require approval from the shareholders of Sunway or any relevant authorities.

12. DIRECTORS' AND MAJOR SHAREHOLDERS' INTERESTS

Insofar as the Directors are aware, none of the directors or major shareholders of Sunway or persons connected with them has any interest, whether direct or indirect, in the Proposed Land Acquisition.

13. STATEMENT BY THE BOARD OF DIRECTORS

The Board of Directors of Sunway is of the opinion that the Proposed Land Acquisition is in the best interests of Sunway Group.

14. DOCUMENTS AVAILABLE FOR INSPECTION

The Agreement is available for inspection at the registered office of Sunway at Level 16, Menara Sunway, Jalan Lagoon Timur, Bandar Sunway, 47500 Subang Jaya, Selangor Darul Ehsan during normal business hours (9.00 a.m. to 6.00 p.m.) from Monday to Friday (except public holidays) for a period of 3 months from the date of this announcement.

This announcement is dated 1 August 2017.