SAPURA ENERGY BERHADir.chartnexus.com/sapuraenergy/website_HTML/attachments/attach… · (iii)...

THIS CIRCULAR IS IMPORTANT AND REQUIRES YOUR IMMEDIATE ATTENTION.If you are in any doubt as to the course of action to be taken, you should consult your stockbroker, bank manager, solicitor, accountant or other professional adviser immediately.Bursa Malaysia Securities Berhad (“Bursa Securities”) has not perused the contents of this Circular in relation to the Proposed Amendments (as defined inthis Circular) as such contents fall under the category of Exempt Circulars pursuant to Practice Note 18 of the Main Market Listing Requirements of Bursa Securities. Bursa Securities has not perused the contents of this Circular in relation to the Proposed Exemption (as defined below) and independent advice letter (“IAL”) in relation to the Proposed Exemption.

Bursa Securities takes no responsibility for the contents of this Circular, makes no representation as to its accuracy or completeness and expressly disclaims any liability whatsoever for any loss howsoever arising from, or in reliance upon the whole or any part of the contents of this Circular.The Securities Commission Malaysia (“SC”) has notified that it has no further comments to the contents of the IAL in relation to the Proposed Exemption (as defined below) pursuant to Paragraph 4.08(3)(e) of the Rules on Take-overs, Mergers and Compulsory Acquisitions (“Rules”). However, such notification shall not be taken to suggest that the SC agrees with the recommendation of the independent adviser or assumes responsibility for the correctness of any statements made or opinions or reports expressed in the IAL.This Circular is being made available to you for information purposes only to enable you to consider the proposals at the Extraordinary General Meeting (“EGM”), and is not an offer of securities for sale in the United States of America (“United States”) or in any other jurisdiction. This Circular shall not constitute an offer to sell or the solicitation of an offer to buy any securities, nor shall there be any sale or purchase of securities in any jurisdiction in which such offer,solicitation or sale would be unlawful prior to registration or qualification under the securities laws of such jurisdiction. No securities of Sapura Energy Berhad have been or will be registered under the United States Securities Act of 1933 (“U.S. Securities Act”), and any such securities may not be offered or sold in the United States absent registration or an available exemption from the registration requirements of the U.S. Securities Act. There will be no public offering of any such securities in the United States.

SAPURA ENERGY BERHAD (Company No. 950894-T) (Incorporated in Malaysia)

CIRCULAR TO SHAREHOLDERS IN RELATION TO THE PART A

(I) PROPOSED RENOUNCEABLE RIGHTS ISSUE OF UP TO 9,986,925,145 NEW ORDINARY SHARES IN SAPURA ENERGY BERHAD (“SEB”) (“SEB SHARES”) (“RIGHTS SHARES”) AT AN ISSUE PRICE OF RM0.30 PER RIGHTS SHARE TOGETHER WITH UP TO 998,692,515 FREE DETACHABLE WARRANTS (“WARRANTS”) ON THE BASIS OF FIVE (5) RIGHTS SHARES FOR EVERY THREE (3) SEB SHARES HELD AT AN ENTITLEMENT DATE TO BE DETERMINED LATER AND ONE (1) FREE WARRANT FOR EVERY TEN (10) RIGHTS SHARES SUBSCRIBED;

(II) PROPOSED RENOUNCEABLE RIGHTS ISSUE OF UP TO 2,396,862,035 NEW ISLAMIC REDEEMABLE CONVERTIBLE PREFERENCE SHARES IN SEB (“RCPS-i”) AT AN ISSUE PRICE OF RM0.41 PER RCPS-i ON THE BASIS OF TWO (2) RCPS-i FOR EVERY FIVE (5) SEB SHARES HELD AT AN ENTITLEMENT DATE TO BE DETERMINED LATER;

(III) PROPOSED EXEMPTION FOR PERMODALAN NASIONAL BERHAD, AMANAH SAHAM BUMIPUTERA AND PERSONS ACTING IN CONCERT WITH THEM FROM THE OBLIGATION TO UNDERTAKE A MANDATORY TAKE-OVER OFFER FOR ALL THE REMAINING SEB SHARES, WARRANTS AND RCPS-i NOT ALREADY OWNED BY THEM PURSUANT TO PARAGRAPHS 4.08(1)(B) AND 4.08(1)(C) OF THE RULES (“PROPOSED EXEMPTION”);

(IV) PROPOSED ESTABLISHMENT OF AN EXECUTIVE SHARE OPTION SCHEME OF UP TO 10% OF THE TOTAL NUMBER OF ISSUED SEB SHARES (EXCLUDING TREASURY SHARES, IF ANY) AT ANY POINT IN TIME (“PROPOSED ESOS”);

(V) PROPOSED GRANTING OF OPTIONS TO TAN SRI DATO’ SERI SHAHRIL SHAMSUDDIN TO SUBSCRIBE FOR UP TO 5% OF THE ISSUED SEB SHARES FROM TIME TO TIME PURSUANT TO THE PROPOSED ESOS; AND

(VI) PROPOSED AMENDMENTS TO THE CONSTITUTION OF SEB PART B

INDEPENDENT ADVICE LETTER FROM MERCURY SECURITIES SDN BHD TO OUR NON-INTERESTED SHAREHOLDERS IN RELATION TO THE PROPOSED EXEMPTION

AND NOTICE OF EXTRAORDINARY GENERAL MEETING

Principal Adviser Independent Adviser

Mercury Securities Sdn Bhd (113193-W)(A Participating Organisation of Bursa Malaysia Securities Berhad)

The Notice of EGM and the Proxy Form are enclosed in this Circular. The details of our EGM are as follows:

Date and time of the EGM : Thursday, 29 November 2018 at 10.00 a.m.Venue of the EGM : Multi-Purpose Hall, Ground Floor, Sapura@Mines, No. 7 Jalan Tasik

The Mines Resort City, 43300 Seri Kembangan, Selangor Darul Ehsan, MalaysiaLast date and time for lodging the Proxy Form : Wednesday, 28 November 2018 at 10.00 a.m.

This Circular is dated 7 November 2018













































































































DEFINITIONS (Cont’d)

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Implied Conversion Price : The implied conversion price for the RCPS-i of RM0.41 for every new SEB Share based on the Conversion Ratio, subject to adjustments to be determined by our Board in the event of any alteration to the share capital of our Company

Listing Requirements : Main Market Listing Requirements of Bursa Securities

LPD : 31 October 2018, being the latest practicable date prior to the printing of this Circular

LTIP : Our Company’s existing long-term incentive plan via a share issuance scheme which commenced on 1 December 2014 and will expire on 30 November 2021

Mandatory Offer : The obligation of the PNB Group to undertake a mandatory take-over offer to acquire:

(i) all the remaining SEB Shares, Warrants and RCPS-i not already owned by them after the Proposed Rights Issue of Shares with Warrants; and/or

(ii) all the remaining SEB Shares following the exercise of the Warrants during the Exercise Period and/or the conversion of the RCPS-i at the RCPS-i Maturity Date

Market Day : A day on which the stock market of Bursa Securities is open for trading in securities

Maximum Shares : Ten percent (10%) of the total number of issued SEB Shares(excluding treasury shares, if any)

Maybank IB or Principal Adviser

: Maybank Investment Bank Berhad

Maybank Islamic : Maybank Islamic Berhad, being the Shariah Adviser for the Proposed Rights Issue of RCPS-i

Mercury Securities : Mercury Securities Sdn Bhd, being the Independent Adviser for the Proposed Exemption

MFRS 2 : Malaysian Financial Reporting Standard 2 on Share-based Payment

NA : Net assets

Offer : An offer made in writing by the ESOS Committee to an Eligible Person in accordance with the By-Laws

OPEC : Organisation of the Petroleum Exporting Countries

Options Exercise Price : The price at which a Grantee shall be entitled to subscribe for new SEB Shares pursuant to the exercise of an Option

Participating Group : Our Group excluding dormant subsidiaries

PNB : Permodalan Nasional Berhad

PNB Funds : Collectively, the Funds and Bumiputera Wealth Fund, ASN Equity 5 and ASN Sara (Mixed Asset Conservative) 2

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(b)

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Proposed Rights Issue of Shares with Warrants

: Proposed renounceable rights issue of up to 9,986,925,145 Rights Shares at the Rights Issue Price together with up to 998,692,515 Warrants on the basis of five (5) Rights Shares for every three (3) SEB Shares held on the Entitlement Date and one (1) Warrant for every ten (10) Rights Shares subscribed

RCPS-i : New Islamic redeemable convertible preference shares in our Company to be issued pursuant to the Proposed Rights Issue of RCPS-i

RCPS-i Issue Date : The date of issuance of the RCPS-i

RCPS-i Issue Price : The issue price of RM0.41 per RCPS-i

RCPS-i Maturity Date : The day immediately preceding the fifth (5th) anniversary from the RCPS-i Issue Date

Record of Depositors : A record provided by Bursa Depository pursuant to Chapter 24 of the Rules of Bursa Depository

Rights Issue Price : The issue price of RM0.30 per Rights Share

Rights Shares : New SEB Shares to be issued pursuant to the Proposed Rights Issue of Shares with Warrants

Rules : Rules on Take-Overs, Mergers and Compulsory Acquisitions

SC : Securities Commission Malaysia

SEB or Company : Sapura Energy Berhad

SEB Group or Group : Collectively, SEB and its subsidiaries

SEB Shares or Shares : Ordinary shares in SEB

SEP Malaysia : Sapura Exploration and Production (Malaysia) Inc

Shariah Pronouncement Letter

: Pronouncement letter issued by the Maybank Islamic in relation to the RCPS-i

STSB : Sapura Technology Sdn Bhd

STSB Undertaking : The irrevocable undertaking from STSB to subscribe to a minimum of RM300 million worth of Rights Shares with Warrants that STSB shall be entitled to under the Proposed Rights Issue of Shares with Warrants as at the Entitlement Date

TERP : Theoretical ex-rights price

TSS : Tan Sri Dato’ Seri Shahril Shamsuddin

Undertakings : Collectively, PNB Undertaking, the Funds’ Undertaking and STSB Undertaking

Undertaking Letters : Letters dated 21 September 2018 and 24 September 2018 from the Undertaking Shareholders on their respective undertakings in relation to the Proposed Rights Issue

Undertaking Shareholders

: Collectively, PNB, the Funds and STSB

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United States : United States of America

U.S. Securities Act : United States Securities Act of 1933

VWAMP : Volume weighted average market price

WAMP : Weighted average market price

Warrants : Free detachable warrants in SEB to be issued pursuant to the Proposed Rights Issue of Shares with Warrants

CURRENCIES

RM and sen : Ringgit Malaysia and sen

USD : United States Dollar

INR : Indian Rupee

All references to “our Company” or “SEB” in this Circular are to SEB and references to “our Group” or “SEB Group” are to our Company and our subsidiaries, collectively. All references to “we”, “us”, “our” and “ourselves” are to our Company, and where the context requires otherwise, shall include our Company and our subsidiaries.

All references to “you” or “your” in this Circular are to our shareholders.

Unless specifically referred to, words denoting the singular shall, where applicable, include the plural and vice versa, and words denoting the masculine gender shall, where applicable, include the feminine and/or neuter genders, and vice versa. Reference to persons shall include corporations, unless otherwise specified.

Any reference to any act, written law, ordinance, enactment or guideline in this Circular is a reference to that act, written law, ordinance, enactment or guideline as amended or re-enacted from time to time.

Any discrepancy in the figures included in this Circular between the amounts stated and the totals thereof are due to rounding.

Any discrepancies in the tables included in this Circular between the amounts listed, actual figures and the totals thereof are due to rounding.

Any reference to a time of day in this Circular is a reference to Malaysian time, unless otherwise stated.

This Circular includes forward-looking statements. All statements other than statements of historical facts included in this Circular including, without limitation, those regarding our Group’s financial position, business strategies, prospects, plans and objectives of our Company for future operations, are forward-looking statements. There can be no assurance that such forward-looking statements will materialise, be fulfilled or be achieved.

Unless otherwise stated, the exchange rate of USD1:RM4.1840, being the middle rate quoted by Bank Negara Malaysia at 5.00 p.m. as at the LPD has been applied throughout this Circular for illustration purposes.

Any exchange rate translations in this Circular are provided solely for your convenience and should not be constituted as representative that the translated amount stated in this Circular could have been or would have been converted into such other amounts or vice versa.

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CONTENTS

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PAGE

PART A LETTER TO OUR SHAREHOLDERS IN RELATION TO THE PROPOSALS AND PROPOSED GRANT CONTAINING: 1. INTRODUCTION ...................................................................................................................... 1 2. DETAILS OF THE PROPOSED RIGHTS ISSUE OF SHARES WITH WARRANTS .............. 3 3. DETAILS OF THE PROPOSED RIGHTS ISSUE OF RCPS-i ................................................. 8 4. DETAILS OF THE PROPOSED EXEMPTION ...................................................................... 11 5. DETAILS OF THE PROPOSED ESOS ................................................................................. 15 6. DETAILS OF THE PROPOSED AMENDMENTS .................................................................. 20 7. USE OF PROCEEDS ............................................................................................................. 20 8. RATIONALE AND BENEFITS OF THE PROPOSALS .......................................................... 22 9. FOREIGN ADDRESSED SHAREHOLDERS ........................................................................ 23 10. INDUSTRY OVERVIEW AND PROSPECTS ........................................................................ 25 11. EFFECTS OF THE PROPOSALS ......................................................................................... 28 12. APPROVALS REQUIRED ..................................................................................................... 37 13. INTERESTS OF THE DIRECTORS, MAJOR SHAREHOLDERS AND/OR PERSONS

CONNECTED WITH THEM ................................................................................................... 40 14. DIRECTORS’ RECOMMENDATION ..................................................................................... 41 15. TENTATIVE TIMETABLE ...................................................................................................... 41 16. HISTORICAL SHARE PRICES .............................................................................................. 42 17. CORPORATE EXERCISE/SCHEME ANNOUNCED BUT PENDING COMPLETION .......... 42 18. EGM ....................................................................................................................................... 42 19. FURTHER INFORMATION .................................................................................................... 43 PART B IAL FROM MERCURY SECURITIES TO OUR NON-INTERESTED SHAREHOLDERS IN RELATION TO THE PROPOSED EXEMPTION ................................................................................ 44

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CONTENTS (Cont’d)

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PAGE APPENDICES I SALIENT TERMS OF THE WARRANTS 152 II SALIENT TERMS OF THE RCPS-i 154 III DRAFT BY-LAWS 160 IV SUMMARY INFORMATION ON THE LTIP 184 V AMENDMENTS TO OUR CONSTITUTION 185 VI SHARIAH PRONOUNCEMENT LETTER 202 VII FURTHER INFORMATION 219 NOTICE OF EGM ENCLOSED PROXY FORM ENCLOSED

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PART A

LETTER FROM OUR BOARD TO OUR SHAREHOLDERS IN RELATION TO THE PROPOSALS AND PROPOSED GRANT

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SAPURA ENERGY BERHAD (Company No. 950894-T)(Incorporated in Malaysia)

Registered Office Sapura@Mines

No. 7, Jalan Tasik The Mines Resort City

43300 Seri Kembangan Selangor Darul Ehsan

Malaysia

7 November 2018

Board of Directors Dato’ Hamzah Bakar (Chairman, Non-Independent Non-Executive Director) Tan Sri Dato’ Seri Shahril Shamsuddin (President and Group Chief Executive Officer, Non-Independent Executive Director) Tan Sri Datuk Amar (Dr) Hamid Bugo (Senior Independent Non-Executive Director) Dato’ Shahriman Shamsuddin (Non-Independent Non-Executive Director)Mohamed Rashdi Mohamed Ghazalli (Independent Non-Executive Director) Gee Siew Yoong (Independent Non-Executive Director) Datuk Ramlan Abdul Malek (Non-Independent Non-Executive Director) Datuk Muhamad Noor Hamid (Independent Non-Executive Director) Datuk Ramlan Abdul Rashid (Independent Non-Executive Director)

To: Our Shareholders

Dear Sir/Madam,

(I) PROPOSED RIGHTS ISSUE OF SHARES WITH WARRANTS;(II) PROPOSED RIGHTS ISSUE OF RCPS-i;(III) PROPOSED EXEMPTION;(IV) PROPOSED ESOS;(V) PROPOSED GRANT; AND(VI) PROPOSED AMENDMENTS

1. INTRODUCTION

On 24 August 2018, Maybank IB had, on behalf of our Board, announced that our Company proposes to undertake the following:

(i) Proposed Rights Issue of Shares with Warrants;

(ii) Proposed Rights Issue of RCPS-i; and

(iii) Proposed Amendments.

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SAPURA ENERGY BERHAD (Company No. 950894-T)(Incorporated in Malaysia)

Registered Office Sapura@Mines

No. 7, Jalan Tasik The Mines Resort City

43300 Seri Kembangan Selangor Darul Ehsan

Malaysia

7 November 2018

Board of Directors Dato’ Hamzah Bakar (Chairman, Non-Independent Non-Executive Director) Tan Sri Dato’ Seri Shahril Shamsuddin (President and Group Chief Executive Officer, Non-Independent Executive Director) Tan Sri Datuk Amar (Dr) Hamid Bugo (Senior Independent Non-Executive Director) Dato’ Shahriman Shamsuddin (Non-Independent Non-Executive Director)Mohamed Rashdi Mohamed Ghazalli (Independent Non-Executive Director) Gee Siew Yoong (Independent Non-Executive Director) Datuk Ramlan Abdul Malek (Non-Independent Non-Executive Director) Datuk Muhamad Noor Hamid (Independent Non-Executive Director) Datuk Ramlan Abdul Rashid (Independent Non-Executive Director)

To: Our Shareholders

Dear Sir/Madam,

(I) PROPOSED RIGHTS ISSUE OF SHARES WITH WARRANTS;(II) PROPOSED RIGHTS ISSUE OF RCPS-i;(III) PROPOSED EXEMPTION;(IV) PROPOSED ESOS;(V) PROPOSED GRANT; AND(VI) PROPOSED AMENDMENTS

1. INTRODUCTION

On 24 August 2018, Maybank IB had, on behalf of our Board, announced that our Company proposes to undertake the following:

(i) Proposed Rights Issue of Shares with Warrants;

(ii) Proposed Rights Issue of RCPS-i; and

(iii) Proposed Amendments.

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On 25 September 2018, Maybank IB had, on behalf of our Board, announced that our Company proposes to undertake the Proposed ESOS. It was also announced that in conjunction with the Proposed Rights Issue of Shares with Warrants and Proposed Rights Issue of RCPS-i, an exemption from the SC will be sought by the PNB Group under Paragraphs 4.08(1)(b) and 4.08(1)(c) of the Rules from the obligation to undertake the Mandatory Offer.

Mercury Securities has been appointed by our Company pursuant to the Rules to act as the Independent Adviser to the non-interested directors and non-interested shareholders of our Company on the Proposed Exemption.

On 16 October 2018, Maybank IB had, on behalf of our Board, announced that BNM had, vide its letter dated 15 October 2018, approved the issuance of the RCPS-i to the non-resident shareholders of our Company pursuant to the Proposed Rights Issue of RCPS-i subject to the conditions set out in Section 12 of Part A of this Circular.

On 5 November 2018, Maybank IB had, on behalf of our Board, announced that the Shariah Advisory Council of the SC had, vide its letter dated 2 November 2018, informed that it has no objection to the Proposed Rights Issue of RCPS-i.

On 5 November 2018, Maybank IB had, on behalf of our Board, announced that Bursa Securities had, vide its letter dated 5 November 2018, approved the following:

(i) admission of up to 998,692,515 Warrants and 2,396,862,035 RCPS-i to the Official List of Bursa Securities;

(ii) listing of the following on the Main Market of Bursa Securities:

(a) up to 9,986,925,145 Rights Shares;

(b) up to 998,692,515 Warrants;

(c) up to 998,692,515 Exercised Shares;

(d) up to 2,396,862,035 RCPS-i;

(e) up to 2,396,862,035 Conversion Shares; and

(f) such number of new SEB Shares to be issued pursuant to the Proposed ESOS,representing up to ten percent (10%) of the total issued SEB Shares (excluding treasury shares, if any) at any point in time,

subject to the conditions set out in Section 12 of Part A of this Circular.

THE PURPOSE OF THIS CIRCULAR IS TO PROVIDE YOU WITH THE DETAILS OF THE PROPOSALS AND PROPOSED GRANT AND TO SEEK YOUR APPROVAL FOR THE RESOLUTIONS PERTAINING TO THE PROPOSALS AND PROPOSED GRANT TO BE TABLED AT THE FORTHCOMING EGM. THE NOTICE OF EGM TOGETHER WITH THE PROXY FORM ARE ENCLOSED IN THIS CIRCULAR.

YOU ARE ADVISED TO READ AND CONSIDER CAREFULLY THE CONTENTS OF THIS CIRCULAR, INCLUDING THE IAL AS SET OUT IN PART B OF THIS CIRCULAR BEFORE VOTING ON THE RESOLUTIONS PERTAINING TO THE PROPOSALS AND PROPOSED GRANT TO BE TABLED AT THE FORTHCOMING EGM.

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2. DETAILS OF THE PROPOSED RIGHTS ISSUE OF SHARES WITH WARRANTS

2.1 Background information on the Proposed Rights Issue of Shares with Warrants

The Proposed Rights Issue of Shares with Warrants entails the issuance of up to 9,986,925,145 Rights Shares at the Rights Issue Price together with up to 998,692,515 Warrants to the Entitled Shareholders on the basis of five (5) Rights Shares for every three (3) SEB Shares held on the Entitlement Date and one (1) Warrant for every ten (10) Rights Shares subscribed by the Entitled Shareholders.

As at the LPD, our Company has not granted any SEB Shares pursuant to the LTIP. In any case, the actual number of Rights Shares to be issued will be determined based on the issued share capital of SEB as at the Entitlement Date and the actual number of Warrants to be issued will depend on the total number of Rights Shares subscribed by the Entitled Shareholders.

The Rights Shares with Warrants will be provisionally allotted to the Entitled Shareholders. In determining shareholders’ entitlements under the Proposed RightsIssue of Shares with Warrants, fractional entitlements, if any, will be disregarded and dealt with in such manner as our Board in its absolute discretion deems fit and expedient, and in the best interest of our Company. The Proposed Rights Issue of Shares with Warrants is renounceable in full or in part. Accordingly, the Entitled Shareholders can subscribe for and/or renounce their entitlements to the Rights Shares together with the Warrants in full or in part. The renunciation of the Rights Shares by the Entitled Shareholders will entail the renunciation of the Warrants to be issued together with the Rights Shares. However, if the Entitled Shareholders decide to accept only part of the Rights Shares entitlements, they shall be entitled to the Warrants in proportion of their acceptance of their Rights Shares entitlements. For avoidance of doubt, the Rights Shares and the Warrants are not separately renounceable.

The Rights Shares which are not taken up or not validly taken up will be made available for excess application by the other Entitled Shareholders and/or their renouncees. It is the intention of our Board to allocate the excess Rights Shares with Warrants, if any, in a fair and equitable manner on a basis to be determined by our Board.

The Warrants will be immediately detached from the Rights Shares upon issuance and will be traded separately. The salient terms of the Warrants are set out in Appendix Iof this Circular.

Notwithstanding anything to the contrary herein, the Rights Shares with Warrants will not be offered or sold to any shareholders or in any jurisdictions where such offer or sale would be unlawful. In particular, the Rights Shares with Warrants will only be offered and sold outside the United States in offshore transactions in reliance on Regulation S under the U.S. Securities Act. For the avoidance of doubt, nothing in this Circular constitutes an offer of securities in the United States or in any other jurisdiction. This Circular is being made available to you for information purposes only to enable you to consider the Proposals and Proposed Grant at the forthcoming EGM.

2.2 Basis and justification for the Rights Issue Price and Exercise Price

2.2.1 Rights Issue Price

The Rights Issue Price was determined after taking into consideration the following:

(i) prevailing market price of the SEB Shares;

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2.3 Ranking of the Rights Shares and Exercised Shares

The Rights Shares shall, upon allotment and issue, rank equally in all respects with the then issued SEB Shares including the entitlements to dividends, rights, allotments or other distributions, except that they shall not be entitled to any dividends, rights, allotments and/or other distributions, of which the entitlement date is before the date of allotment of such Rights Shares. The Exercised Shares shall, upon allotment and issue, rank equally in all respects with the then issued SEB Shares including the entitlements to dividends, rights, allotments or other distributions, except that they shall not be entitled to any dividends, rights, allotments and/or other distributions, of which the entitlement date is before the date of allotment of such Exercised Shares.

2.4 Listing of the Rights Shares, Warrants and Exercised Shares

Bursa Securities had, vide its letter dated 5 November 2018, granted its approval for the following:

(i) admission of up to 998,692,515 Warrants to the Official List of Bursa Securities; and

(ii) listing of up to 9,986,925,145 Rights Shares, 998,692,515 Warrants and 998,692,515 Exercised Shares on the Main Market of Bursa Securities,

subject to the conditions set out in Section 12 of Part A of this Circular.

2.5 Shareholders’ undertaking and underwriting arrangement

The Proposed Rights Issue of Shares with Warrants will be undertaken on full subscription basis.

Our Company has procured the following undertakings in respect of the Proposed Rights Issue of Shares with Warrants:

(i) STSB Undertaking, pursuant to which STSB irrevocably undertakes that STSB will subscribe to a minimum of RM300 million worth of Rights Shares with Warrants that STSB shall be entitled to under the Proposed Rights Issue of Shares with Warrants as at the Entitlement Date; and

(ii) PNB Undertaking and the Funds’ Undertaking, pursuant to which PNB and ART, acting in its capacity as trustee of the Funds, irrevocably undertakes that:

(a) PNB and the Funds will subscribe in full for all the Rights Shares with Warrants that PNB and the Funds shall be entitled to under the Proposed Rights Issue of Shares with Warrants as at the Entitlement Date; and

(b) PNB Group will, at an allocation to be determined later and subject to the availability of Excess Rights Shares, subscribe to such Excess Rights Shares, resulting in the PNB Group having shareholding of 40% of the enlarged issued share capital of SEB immediately following the implementation of the Proposed Rights Issue of Shares with Warrants.

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010

.01

PN

B G

roup

5,66

3,22

71,

698,

968.

2 56

6,32

356

.71

6,39

1,63

2 40

.00

566,

323

56.7

1 6,

663,

227

1,99

8,96

8.2

666,

323

66.7

2 8,

344,

636

52.2

2 66

6,32

366

.72

Not

es:

(1)

Com

pute

d ba

sed

on th

e R

ight

s S

hare

s su

bscr

ibed

div

ided

by

the

tota

l Rig

hts

Shar

es is

sued

pur

suan

t to

the

Pro

pose

d R

ight

s Is

sue

of S

hare

s w

ith W

arra

nts.

(2

) C

ompu

ted

base

d on

the

War

rant

s su

bscr

ibed

div

ided

by

the

tota

l War

rant

s is

sued

pur

suan

t to

the

Pro

pose

d R

ight

s Is

sue

of S

hare

s w

ith W

arra

nts.

The

Und

erta

king

Sha

reho

lder

s ha

ve a

lso

resp

ectiv

ely

conf

irmed

via

the

Und

erta

king

sLe

tters

that

the

y ha

ve s

uffic

ient

fin

anci

al r

esou

rces

to

fulfi

l th

eir

com

mitm

ent

unde

r th

e U

nder

taki

ng L

ette

rs.

May

bank

IB

has

verif

ied

that

the

Und

erta

king

Sha

reho

lder

s ha

ve s

uffic

ient

fin

anci

al r

esou

rces

to

fulfi

l th

eir

resp

ectiv

e co

mm

itmen

tpur

suan

t to

the

Und

erta

king

Lette

rs.

As th

e Pr

opos

ed R

ight

s Is

sue

of S

hare

s w

ith W

arra

nts

will

be

unde

rtake

n on

full

subs

crip

tion

basi

s, o

ur C

ompa

ny w

ill e

nter

into

und

erw

ritin

g ar

rang

emen

ts fo

r th

e po

rtion

of t

he R

ight

s S

hare

s fo

r w

hich

no

unde

rtaki

ng h

as b

een

prov

ided

. The

und

erw

ritin

g ar

rang

emen

ts a

re o

nly

expe

cted

to b

e in

pla

ce p

rior

to th

e im

plem

enta

tion

of th

e Pr

opos

ed R

ight

s Is

sue

of S

hare

s w

ith W

arra

nts,

det

ails

of w

hich

will

be a

nnou

nced

upo

n ex

ecut

ion

of th

e un

derw

ritin

g ag

reem

ent.

7

8

In the event that the direct shareholding of the PNB Group increases to above 33% of the enlarged issued share capital of our Company upon completion of the Proposed Rights Issue of Shares with Warrants as a consequence of the PNB Undertaking and the Funds’ Undertaking, the PNB Group will be obliged to undertake the Mandatory Offer. The PNB Group therefore intends to seek the Proposed Exemption, details of which are set out in Section 4 of Part A of this Circular.

3. DETAILS OF THE PROPOSED RIGHTS ISSUE OF RCPS-i

3.1 Background information on the Proposed Rights Issue of RCPS-i

The Proposed Rights Issue of RCPS-i entails the issuance of up to 2,396,862,035 RCPS-i to the Entitled Shareholders on the basis of two (2) RCPS-i for every five (5) SEB Shares held by the Entitled Shareholders on the Entitlement Date at the RCPS-iIssue Price.

The RCPS-i will be provisionally allotted to the Entitled Shareholders. In determining shareholders’ entitlements under the Proposed Rights Issue of RCPS-i, fractional entitlements, if any, will be disregarded and dealt with in such manner as our Board in its absolute discretion deems fit and expedient, and in the best interest of our Company. The Proposed Rights Issue of RCPS-i is renounceable in full or in part. Accordingly, the Entitled Shareholders can subscribe for and/or renounce their entitlements to the RCPS-i in full or in part.

The RCPS-i which are not taken up or not validly taken up will be made available for excess application by the other Entitled Shareholders and/or their renouncees. It is the intention of our Board to allocate the excess RCPS-i, if any, in a fair and equitable manner on a basis to be determined by our Board.

The salient terms of the RCPS-i are set out in Appendix II of this Circular.

Notwithstanding anything to the contrary herein, the RCPS-i will not be offered or sold to any shareholders or in any jurisdictions where such offer or sale would be unlawful. In particular, the RCPS-i will only be offered and sold outside the United States in offshore transactions in reliance on Regulation S under the U.S. Securities Act. For the avoidance of doubt, nothing in this Circular constitutes an offer of securities in the United States or in any other jurisdiction. This Circular is being made available to you for information purposes only to enable you to consider the Proposals and Proposed Grant at the forthcoming EGM.

3.2 Basis and justification for the RCPS-i Issue Price, Implied Conversion Price and Conversion Ratio

3.2.1 RCPS-i Issue Price

The RCPS-i Issue Price represents the TERP of SEB Shares of RM0.41 based on the five (5)-day VWAMP of SEB Shares up to and including the Announcement LTD of RM0.59.

The RCPS-i Issue Price was determined after taking into consideration the following:

(i) TERP of SEB Shares based on the five (5)-day VWAMP of SEB Shares up to and including the Announcement LTD of RM0.59; and

(ii) prospects of our Group after the completion of the Proposed Rights Issue.

8

9

3.2.2 Implied Conversion Price and Conversion Ratio

The Implied Conversion Price was determined based on the RCPS-i Issue Price and the Conversion Ratio, and represents the TERP of SEB Shares. The Conversion Ratio and/or the Implied Conversion Price were determined after taking into consideration the following: (i) TERP of SEB Shares of RM0.41 based on the five (5)-day VWAMP

of SEB Shares up to and including the Announcement LTD of RM0.59; and

(ii) timing restriction imposed on the conversion of RCPS-i into new SEB

Shares. Assuming all the RCPS-i issued pursuant to the Proposed Rights Issue of RCPS-i are converted, a total of 2,396,862,035 new SEB Shares will be issued.

3.3 Ranking of the Conversion Shares

The Conversion Shares shall, upon allotment and issue, rank equally in all respects with the then issued SEB Shares including the entitlements to dividends, rights, allotments or other distributions, except that they shall not be entitled to any dividends, rights, allotments and/or other distributions, of which the entitlement date is before the date of allotment of such Conversion Shares.

3.4 Listing of the RCPS-i and Conversion Shares

Bursa Securities had, vide its letter dated 5 November 2018, granted its approval for the admission of 2,396,862,035 RCPS-i to the Official List of Bursa Securities and thelisting of 2,396,862,035 RCPS-i and 2,396,862,035 Conversion Shares on the Main Market of Bursa Securities, subject to the conditions set out in Section 12 of Part A of this Circular.

3.5 Shareholders’ undertaking and underwriting arrangement

The Proposed Rights Issue of RCPS-i will be undertaken on full subscription basis.

Our Company has procured the PNB Undertaking and the Funds’ Undertaking in respect of the Proposed Rights Issue of RCPS-i, pursuant to which PNB and ART, acting in its capacity as trustee of the Funds, irrevocably undertakes that:

(i) PNB and the Funds will subscribe in full for all the RCPS-i that PNB and the Funds shall be entitled to under the Proposed Rights Issue of RCPS-i as at the Entitlement Date; and

(ii) PNB Group will, at an allocation to be determined later, subscribe for all the remaining RCPS-i not taken up or not validly taken up by other Entitled Shareholders and/or their renouncees by way of excess application.

The undertakings from PNB and ART are subject to and conditional upon all regulatory and other required approvals having been obtained by our Company for the Proposed Rights Issue as set out in Section 12 of Part A of this Circular.

As the PNB Undertaking and the Funds’ Undertaking will enable the Proposed Rights Issue of RCPS-i to be undertaken on a full subscription basis, our Company will not procure any underwriting arrangement for the excess RCPS-i not taken up or not validly taken up by the Entitled Shareholders and/or their renouncees.

9

11

4. DETAILS OF THE PROPOSED EXEMPTION

4.1 Background information on the Proposed Exemption

The shareholdings of the PNB Group in our Company as at the LPD are as follows:

No. of SEB Shares

Shareholding in SEB

(‘000) %

PNB 19,641 0.33

ART - ASB 387,000 6.46

ART - Amanah Saham Malaysia 2 - Wawasan(formerly known as Amanah Saham Wawasan 2020)

83,000 1.39

ART - Amanah Saham Malaysia 93,154 1.55

ART - Amanah Saham Malaysia 3 (formerly known as Amanah Saham 1Malaysia)

65,456 1.09

ART - Amanah Saham Bumiputera 3 - Didik(formerly known as Amanah Saham Didik)

37,554 0.63

ART - Amanah Saham Bumiputera 2 9,000 0.15

ART - Amanah Saham Nasional 7,741 0.13

ART - ASN Equity 2 (formerly known as Amanah Saham Nasional 2)

3,674 0.06

ART - ASN Imbang (Mixed Asset Balanced) 1(formerly known as Amanah Saham Nasional 3 Imbang)

7,390 0.12

ART - ASN Equity 3 (formerly known as Amanah Saham Kesihatan)

9,533 0.16

ART - ASN Imbang (Mixed Asset Balanced) 2(formerly known as Amanah Saham Pendidikan)

4,762 0.08

PNB - Bumiputera Wealth Fund 500 0.01

PNB Group 728,405 12.16

The Proposed Exemption is being sought by the PNB Group pursuant to:

(i) the subscription for the Rights Shares with Warrants (including Excess Rights Shares) by the PNB Group pursuant to the PNB Undertaking and the Funds’ Undertaking under the Proposed Rights Issue of Shares with Warrants;

(ii) the exercise of Warrants held by the PNB Group into new SEB Shares during the Exercise Period; and

(iii) the conversion of the RCPS-i held by the PNB Group on the RCPS-i Maturity Date,

which may result in:

(i) an increase in the individual shareholding of ASB and/or collective shareholding of the PNB Group to above 33% of the enlarged issued share capital of SEB pursuant to the subscription of the Rights Shares, exercise of Warrants into new SEB Shares during the Exercise Period and/or conversion of the RCPS-i on the RCPS-i Maturity Date; and/or

11

12

(ii) where ASB individually and/or the PNB Group collectively holds more than 33% but less than 50% of the enlarged issued share capital of SEB, an increase in the individual shareholding of ASB and/or collective shareholding of the PNBGroup by more than 2% of the enlarged issued share capital of SEB in any period of six (6) months pursuant to the exercise of Warrants into new SEB Shares during the Exercise Period and/or conversion of the RCPS-i on the RCPS-iMaturity Date.

For the avoidance of doubt, save for ASB, none of the shareholding of the other members of the PNB Group is expected to exceed 33%.

The shareholding limit to be established for the Proposed Exemption will be based on the actual number and percentage of voting rights that ASB individually and/or the PNBGroup collectively will hold upon completion of the Proposed Rights Issue, and assuming the PNB Group exercises in full its right to exercise the Warrants and the RCPS-i are fully converted, based on the actual number of RCPS-i and Warrants held by the PNB Group at the time of completion of the Proposed Rights Issue (“Exemption Shareholding Limit”).

Should the PNB Group breaches the Exemption Shareholding Limit, the PNB Group would be obliged to observe the requirement of the Rules.

4.2 Mandatory Offer and exemption sought

The obligation to undertake the Mandatory Offer will depend upon, among others, the actual subscription rate of the Rights Shares and exercise of the Warrants by the Entitled Shareholders and/or their renouncees.

The maximum direct shareholdings of ASB individually and the PNB Group collectively after the Proposed Rights Issue, full exercise of the Warrants and conversion of the RCPS-i have been illustrated based on the following scenarios:

Scenario 1 ASB individually and the PNB Group collectively triggering the Mandatory Offer obligation

(i) STSB subscribes for RM300 million worth of Rights Shares with Warrants and PNB and the Funds subscribe in full for all the Rights Shares with Warrants and RCPS-i that they are entitled to under the Proposed Rights Issue as at the Entitlement Date pursuant to the Undertakings;

(ii) save for the subscription by the Undertaking Shareholders as disclosed in item (i) above, none of the other Entitled Shareholders subscribe for their respective entitlements under the Proposed Rights Issue and the shareholdings of the other Entitled Shareholders in SEB remain unchanged;

(iii) in respect of the committed excess application under the PNB Undertaking and the Funds’ Undertaking, only ASB subscribes for (a) the Excess Rights Shares resulting in the PNB Group having shareholding of 40% of the enlarged issued share capital of SEB immediately following the implementation of the Proposed Rights Issue of Shares with Warrants; and (b) all the remaining RCPS-i not taken up or not validly taken up by other Entitled Shareholders and/or their renouncees by way of excess application under the Funds’ Undertaking;

(iv) all outstanding RCPS-i are mandatorily converted into new SEB Shares on the RCPS-i Maturity Date; and

12

14

Scen

ario

1 -

ASB

indi

vidu

ally

and

the

PNB

Gro

up c

olle

ctiv

ely

trig

gerin

g th

e M

anda

tory

Offe

r obl

igat

ion

Dire

ct s

hare

hold

ing

in

our C

ompa

ny a

s at

th

e LP

D

Max

imum

dire

ct

shar

ehol

ding

afte

r the

Pr

opos

ed R

ight

s Is

sue

of S

hare

s w

ith

War

rant

s (1

)

Max

imum

dire

ct

shar

ehol

ding

afte

rthe

Pr

opos

ed R

ight

s Is

sue

of R

CPS

-i

Max

imum

dire

ct

shar

ehol

ding

afte

rth

e co

nver

sion

of t

he

RC

PS-i

(2)

Max

imum

dire

ct

shar

ehol

ding

afte

rthe

fu

ll ex

erci

se o

f the

W

arra

nts

by A

SB o

nly(3

)

Max

imum

dire

ct

shar

ehol

ding

afte

rthe

full

exer

cise

of t

he W

arra

nts

by

the

PNB

Gro

up (o

ther

than

A

SB)

No.

of S

EB

Shar

es%

No.

of S

EB

Shar

es%

No.

of S

EB

Shar

es%

No.

of S

EB

Shar

es%

No.

of S

EB

Shar

es%

No.

of S

EB

Shar

es%

(‘000

)(‘0

00)

(‘000

)(‘0

00)

(‘000

)(‘0

00)

AR

T -A

SB

387,

000

6.46

5,48

2,05

3 34

.31

5,48

2,05

334

.31

7,74

2,55

3 42

.13

8,25

2,05

8 43

.70

8,25

2,05

843

.56

PN

B G

roup

728,

405

12.1

66,

391,

632

40.0

06,

391,

632

40.0

08,

788,

494

47.8

39,

297,

999

49.2

3(4

)9,

354,

817

49.3

9

Not

es:

(1)

Ass

umin

g th

e al

loca

tion

of 5

,095

.0 m

illio

n R

ight

s Sh

ares

and

568

.2 m

illio

n R

ight

s Sh

ares

to A

SB

and

the

PN

B G

roup

(oth

er th

an A

SB

), re

spec

tivel

y, p

ursu

ant t

o th

e P

NB

Und

erta

king

and

the

Fund

s’ U

nder

taki

ng.

(2)

Ass

umin

g th

e co

nver

sion

of 2

,260

.5 m

illio

n R

CP

S-i

and

136.

4 m

illio

n R

CP

S-i

into

new

SE

B S

hare

s, b

eing

the

num

ber o

f RC

PS

-i to

be

subs

crib

ed b

y AS

B a

nd th

e P

NB

Gro

up (o

ther

than

AS

B),

resp

ectiv

ely,

pur

suan

t to

the

PN

B U

nder

taki

ng a

nd th

e Fu

nds’

Und

erta

king

. (3

)A

ssum

ing

the

exer

cise

of 5

09.5

mill

ion

War

rant

s in

to n

ew S

EB S

hare

s, b

eing

the

num

ber o

f War

rant

s to

be

allo

cate

d to

AS

B p

ursu

ant t

o th

e Fu

nds’

Und

erta

king

.(4

)A

ssum

ing

the

exer

cise

of 5

6.8

mill

ion

War

rant

s in

to n

ew S

EB

Sha

res,

bei

ng th

e nu

mbe

r of W

arra

nts

to b

e al

loca

ted

to th

e P

NB

Gro

up (o

ther

than

AS

B) p

ursu

ant t

o th

e P

NB

Und

erta

king

and

the

Fund

s’ U

nder

taki

ng.

Scen

ario

2 –

The

PN

B G

roup

col

lect

ivel

y (w

ith n

o in

divi

dual

mem

ber o

f the

PN

B G

roup

) trig

gerin

g th

e M

anda

tory

Offe

r obl

igat

ion

Dire

ct s

hare

hold

ing

in o

ur C

ompa

ny a

s at

the

LPD

Max

imum

dire

ct

shar

ehol

ding

afte

rthe

Pr

opos

ed R

ight

s Is

sue

of S

hare

s w

ith

War

rant

s

Max

imum

dire

ct

shar

ehol

ding

afte

rth

e Pr

opos

ed R

ight

s Is

sue

of R

CPS

-i

Max

imum

dire

ct

shar

ehol

ding

afte

rthe

co

nver

sion

of t

he

RC

PS-i

Max

imum

dire

ct

shar

ehol

ding

afte

r the

fu

ll ex

erci

se o

f the

W

arra

nts

by A

SB o

nly(3

)

Max

imum

dire

ct

shar

ehol

ding

afte

rthe

full

exer

cise

of t

he W

arra

nts

by

the

PNB

Gro

up (o

ther

than

A

SB)

No.

of S

EB

Shar

es%

No.

of S

EB

Shar

es%

No.

of S

EB

Shar

es%

No.

of S

EB

Shar

es%

No.

of S

EB

Shar

es%

No.

of S

EB

Shar

es%

(‘000

)(‘0

00)

(‘000

)(‘0

00)

(‘000

)(‘0

00)

PN

B G

roup

728,

405

12.1

6(1

) 6,3

91,6

3240

.00

6,39

1,63

240

.00

(2) 8

,788

,494

47.8

39,

297,

999

49.2

3(4

)9,

354,

817

49.3

9

Not

es:

(1)

Ass

umin

g th

e al

loca

tion

of 5

,663

.2 m

illio

n R

ight

s Sh

ares

to th

e P

NB

Gro

up p

ursu

ant t

o th

e P

NB

Und

erta

king

and

the

Fund

s’ U

nder

taki

ng.

(2)

Ass

umin

g th

e co

nver

sion

of 2

,396

.9 m

illio

n R

CP

S-i

into

new

SE

B S

hare

s, b

eing

the

num

ber

of R

CP

S-i

to b

e su

bscr

ibed

by

the

PN

B G

roup

pur

suan

t to

the

PN

B U

nder

taki

ng a

nd th

e Fu

nds’

Und

erta

king

. (3

)A

ssum

ing

the

exer

cise

of 5

09.5

mill

ion

War

rant

s in

to n

ew S

EB S

hare

s, b

eing

the

num

ber o

f War

rant

s to

be

allo

cate

d to

AS

B p

ursu

ant t

o th

e Fu

nds’

Und

erta

king

.(4

)A

ssum

ing

the

exer

cise

of 5

6.8

mill

ion

War

rant

s in

to n

ew S

EB

Sha

res,

bei

ng th

e nu

mbe

r of W

arra

nts

to b

e al

loca

ted

to th

e P

NB

Gro

up (o

ther

than

AS

B) p

ursu

ant t

o th

e P

NB

Und

erta

king

and

the

Fund

s’ U

nder

taki

ng.

14

15

Based on the above, the shareholdings of ASB individually and/or the PNB Group collectively may increase to above 33% of the enlarged issued share capital of our Company upon completion of the Proposed Rights Issue pursuant to the PNB Undertaking and the Funds’ Undertaking resulting in a Mandatory Offer obligation being triggered. Further, ASB individually and/or the collective shareholding of the PNB Group may increase by more than 2% of the enlarged issued share capital of our Company over a six (6)-month period, after the completion of the Proposed Rights Issue, upon exercise of the Warrants or conversion of the RCPS-i. Accordingly, the PNB Group may be obliged to undertake the Mandatory Offer pursuant to Section 218(2) of the CMSA and Paragraphs 4.01(a) and 4.01(b) of the Rules.

As it is not the intention of the PNB Group to undertake the Mandatory Offer, the PNBGroup intends to seek an exemption from the SC pursuant to the Paragraphs 4.08(1)(b) and 4.08(1)(c) of the Rules from the obligation to undertake the Mandatory Offer.

An application for the Proposed Exemption will only be submitted to the SC by PNB on behalf of the PNB Group after the approval of the non-interested shareholders of SEB has been obtained at the forthcoming EGM.

The Proposed Rights Issue of Shares with Warrants, the Proposed Rights Issue of RCPS-i and the Proposed Exemption are inter-conditional. Hence, in the event that the non-interested shareholders of SEB or the SC does not approve the Proposed Exemption, the Proposed Rights Issue of Shares with Warrants and the Proposed Rights Issue of RCPS-i will not be implemented.

5. DETAILS OF THE PROPOSED ESOS

The Proposed ESOS involves the granting of Options to the senior management and Executive Directors of our Participating Group who meet the criteria of eligibility for participation as set out in the By-Laws to subscribe for new SEB Shares at specified prices.

For the avoidance of doubt, the ESOS Options will not be granted to the Non-Executive Directors of our Company. The Proposed ESOS will be administered by the ESOS Committee and governed by the By-Laws. Under the Proposed ESOS, an Eligible Person may from time to time within the duration of the Proposed ESOS, at the discretion of the ESOS Committee, be granted the Offer. In this respect, the Proposed ESOS is expected to be effective after the forthcoming EGM and approval of the SC for the Proposed Exemption but prior to the completion of the Proposed Rights Issue. In the event that the Offer is granted prior to the Entitlement Date, the Options Exercise Price will be subject to adjustments, at the determination of the ESOS Committee, arising from the alteration of our Company’s share capital by way of the Proposed Rights Issue in accordance with the provision of the By-Laws. Our Company has on 1 December 2014 established the LTIP following the approval from our shareholders in 2014. The LTIP is for a period of seven (7) years and will expire on 30 November 2021. Under the LTIP, each grant of SEB Shares are subject to a certain vesting period and conditions before new SEB Shares are issued to the grantees. Although the maximum number of SEB Shares which may be issued under the LTIP is up to 5% of the issued share capital of SEB, as at the LPD, our Company has not granted any SEB Shares pursuant to the LTIP. A summary of the information on the LTIP is set out in Appendix IV of this Circular.

15

16

The salient features of the Proposed ESOS are as follows:

5.1 Maximum number of new SEB Shares available under the Proposed ESOS

The maximum number of new SEB Shares which may allotted and issued pursuant to the exercise of the Options that may be granted under the Proposed ESOS shall not in aggregate exceed the Maximum Shares at any point in time during the duration of the Proposed ESOS.

5.2 Maximum allowable allotment and basis of allocation

Subject to any adjustments which may be made under the By-Laws, the maximum number of Options that may be granted under the Proposed ESOS to any one (1) Eligible Person shall be at the sole and absolute discretion of the ESOS Committee after taking into consideration the position, performance and length of service of the Eligible Person in our Participating Group, and/or such other factors which the ESOS Committee may in its absolute discretion deem fit, subject to the following:

(i) the senior management and Executive Directors of our Participating Group do not participate in the deliberation or discussion in respect of his/her own allocation; and

(ii) the number of new SEB Shares to be allocated to any Eligible Person who, either singly or collectively through persons connected with such Eligible Person, holds twenty percent (20%) or more of the total issued SEB Shares(excluding treasury shares, if any), does not exceed ten percent (10%) (or such percentage as allowable by the relevant authorities) of the total number of newSEB Shares to be issued under the Proposed ESOS,

provided always that it is in accordance with any prevailing guidelines issued by Bursa Securities, the Listing Requirements or any other requirements of the relevant authorities and as amended from time to time.

Pursuant to Paragraph 6.06(1) of the Listing Requirements, the participation by each of the Directors, chief executive and major shareholders of our Company and/or persons connected with them (if any) in the Proposed ESOS must be approved by the shareholders of our Company in a general meeting. Accordingly, our Company will seek the approval of our shareholders for the Proposed Grant, subject to Sections 5.2 (i) and (ii) above.

For the avoidance of doubt, the ESOS Committee shall have the sole and absolute discretion in determining whether the Options are to be granted to the Eligible Persons via:

(a) one (1) single Offer at a time determined by the ESOS Committee; or (b) several Offers where the vesting of the Options comprised in those Offers is

staggered or made in several tranches at such times and on such terms and conditions as may be determined by the ESOS Committee,

provided always that the aggregate number of new SEB Shares in respect of the Offers granted to any Eligible Person shall not exceed the amount stipulated in Sections 5.1 and 5.2(ii) above.

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In the event the ESOS Committee decides that the vesting of the Options is to be staggered or made in several tranches, the number of Options to be granted pursuant to each vesting of the Options and the timing for the vesting of the same shall be decided by the ESOS Committee at its sole and absolute discretion and each vesting of the Options shall be separate and independent from the others.

As at the LPD, our Company has yet to ascertain any performance targets required to be met and vesting period before the Options can be granted and/or exercised by a Grantee. In any event, such performance targets and vesting period, if any, will be determined by the ESOS Committee.

5.3 Eligibility

Subject to the discretion of the ESOS Committee, any senior management and/orExecutive Director of our Participating Group shall be eligible to participate in the Proposed ESOS if, as at the Date of Offer, that person:

(i) has attained at least eighteen (18) years of age and is not an undischarged bankrupt nor subject to any bankruptcy proceedings;

(ii) if he/she is a senior management, he/she is employed on a full time basis and is on the payroll of any company in our Participating Group, and his/her employment has been confirmed by such company in our Participating Group;

(iii) if he/she is a senior management, he/she is serving in a specific designation under an employment contract for a fixed duration and has been in the employment of our Participating Group for such period as may be determined by the ESOS Committee prior to and up to the Date of Offer;

(iv) if he/she is an Executive Director, he/she has been serving our Participating Group for such period as may be determined by the ESOS Committee prior to and up to the Date of Offer;

(v) if he/she is an Executive Director of our Company, the allocation of the Options granted to him/her in his/her capacity as an Executive Director of our Company under the Proposed ESOS has been approved by the shareholders of our Company at a general meeting; and

(vi) fulfils any other criteria and/or falls within such category as may be determined by the ESOS Committee at its absolute discretion for purposes of selecting an Eligible Person from time to time.

Eligibility under the Proposed ESOS however does not confer upon an Eligible Person a claim or right to participate in the Proposed ESOS or any rights whatsoever under the Proposed ESOS and an Eligible Person does not have any rights over or in connection with the Options or the new SEB Shares comprised therein unless an Offer has been made in writing by the ESOS Committee to that Eligible Person and the Eligible Person has accepted the Offer in accordance with the By-Laws.

5.4 Option Exercise Price

The Option Exercise Price shall be determined by our Board upon recommendation of the ESOS Committee, subject always to such adjustments as may be made in accordance with the provisions of the By-Laws, based on the five (5)-day WAMP of SEB Shares, as quoted on Bursa Securities, immediately preceding the Date of Offer with a discount of not more than ten percent (10%) or such other percentage of discount as may be permitted by Bursa Securities or any other relevant authorities from time to time during the duration of the Proposed ESOS.

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5.5 Duration and termination of the Proposed ESOS

The Proposed ESOS shall take effect on a date to be determined by the ESOS Committee following full compliance with the following relevant requirements prescribed under the Listing Requirements:

(i) approval of Bursa Securities for the listing of the new SEB Shares to be issued

pursuant to the exercise of the Options being obtained;

(ii) approval of the shareholders of our Company for the Proposed ESOS at the forthcoming EGM being obtained;

(iii) submission to Bursa Securities of the final copy of the By-Laws together with a letter of compliance pursuant to Paragraph 2.12 of the Listing Requirements and a checklist showing compliance with Appendix 6E of the Listing Requirements (and/or such other documents as may be determined by Bursa Securities from time to time);

(iv) approval of any other relevant authorities, where applicable, being obtained; and

(v) fulfilment or waiver (as the case may be) of all applicable conditions attached to the above approvals (if any).

The Proposed ESOS shall be in force for a period of seven (7) years from the Effective Date.

Subject to a notice period of at least thirty (30) days being provided, and in compliance with the existing guidelines or directives of Bursa Securities or any other regulatory authorities, the Proposed ESOS may be terminated by the ESOS Committee at any time during the duration of the Proposed ESOS and our Company shall make an announcement immediately through Bursa Securities. The announcement shall include:

(i) the effective date of termination; (ii) the number of Options exercised and/or vested; and

(iii) the reasons for termination.

5.6 Ranking of new SEB Shares to be issued upon exercise of the Options

The new SEB Shares to be allotted and issued upon exercise of the Options shall, upon allotment and issue, rank equally in all respects with the then issued SEB Shares including the entitlements to dividends, rights, allotments or other distributions, except that they shall not be entitled to any dividends, rights, allotments and/or other distributions, of which the entitlement date is before the date of allotment of the new SEB Shares.

5.7 Retention period

The Grantee must not sell, transfer or assign any new SEB Shares obtained through the exercise of the Options offered to him under the Proposed ESOS within three (3) years from the Date of Offer.

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5.8 Alteration of share capital during the Option Period

In the event of any alteration in the capital structure of our Company during the duration of the Proposed ESOS, whether by way of capitalisation of profits or reserves, rights issue, bonus issue, reduction, subdivision or consolidation of capital or any other variations of capital, the ESOS Committee shall have the discretion, in accordance with the provision of the By-Laws, to make adjustments to:

(i) the Options Exercise Price; and/or

(ii) the number of Shares comprised in the Option or any portion thereof which have not been exercised; and/or

(iii) the number of SEB Shares and/or Options Exercise Price comprised in an Offer which is open for acceptance (if such Offer is subsequently accepted in accordance with the terms and conditions of the Offer and the By-Laws).

Alteration of share capital does not apply to, among others, issuance of securities as consideration for an acquisition, pursuant to a special issue or private placement or any purchase by our Company of SEB Shares or any conversion of convertibles.

Save for a bonus issue, subdivision or consolidation of Shares, such adjustments must be confirmed in writing by the external auditors of our Company for the time being (acting as experts and not as arbitrators) or the principal adviser upon reference to them by the ESOS Committee, to be in their opinion, fair and reasonable.

5.9 Modification, variation and/or amendments to the Proposed ESOS

Subject to compliance with the Listing Requirements and the approval of any other authorities, the ESOS Committee may from time to time recommend to our Board any additions, modifications and amendments to or deletions of the By-Laws as it shall in its discretion think fit.

The approval of our shareholders in a general meeting shall not be required in respect of additions or amendments to or deletions of the By-Laws provided that no additions, amendments or deletions shall be made to the By-Laws which would:

(i) prejudice any rights which would have accrued to any Grantee without his/her

prior consent; or

(ii) increase the number of Shares to be issued pursuant to the exercise of the Options available under the Proposed ESOS beyond the Maximum Shares; or

(iii) alter any matter which are required to be contained in the By-Laws by virtue of the Listing Requirements to the advantage of the Eligible Person and/or Grantee.

5.10 Listing of the new SEB Shares to be issued pursuant to the exercise of the Options

Bursa Securities had, vide its letter dated 5 November 2018, granted its approval for the listing of such number of new SEB Shares to be issued pursuant to the Proposed ESOS, representing up to ten percent (10%) of the total issued SEB Shares (excluding treasury shares, if any) at any point in time on the Main Market of Bursa Securities, subject to the conditions set out in Section 12 of Part A of this Circular.

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6. DETAILS OF THE PROPOSED AMENDMENTS

The Proposed Amendments entail the amendments to be made to our Constitution to facilitate the implementation of the Proposed Rights Issue in respect of the issuance of RCPS-i and serving of notices by electronic form, details of which are set out in Appendix V of this Circular.

7. USE OF PROCEEDS

7.1 Proposed Rights Issue

The Proposed Rights Issue is expected to raise gross proceeds of approximately RM3,978.8 million, the breakdown of which is as follows:

Amount

(RM‘000)

Proceeds from the Proposed Rights Issue of Shares with Warrants 2,996,077.5Proceeds from the Proposed Rights Issue of RCPS-i 982,713.5Total gross proceeds 3,978,791.0

The total gross proceeds are expected to be used in the following manner:

Description of use of proceeds

Estimated timeframe for use of proceeds from the date of listing of the Rights Shares,

Warrants and RCPS-i Amount

(RM‘000)

Part repayment of the bank borrowings of our Group (1)

Within four (4) months 3,957,949.5

Defray estimated expenses relating to the Proposals (2)

Within one (1) month 20,841.5

Total gross proceeds 3,978,791.0

Notes:

(1) As at the LPD, the total borrowings of our Group is approximately RM17,215.0 million.The proceeds from the Proposed Rights Issue will be used to partly repay the amount due to lenders of multi-currency term facilities which primarily was used for the following:

(a) USD1,737 million (RM5,727 million) to refinance a bridging facility which was used to part finance the acquisition of the tender rig business i.e. Seadrill Tender Rig Limited for USD2,646 million (RM8,032 million), which was completed in 2013; and

(b) USD899 million (RM2,974 million) to finance the acquisition of the E&Pbusiness i.e. Newfield Malaysia Holdings Inc. (currently known as SEP Malaysia) for USD896 million and transaction costs of USD3 million, which was completed in 2014.

The part repayment of the bank borrowings of our Group is expected to result in savings in finance cost of approximately RM174.2 million per annum based on an interest rate of approximately 4.4% per annum.

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The breakdown of the total bank borrowings of our Group as at the LPD is as follows:

Amount(USD‘000) (RM‘000)

Bank borrowings denominated in USD 2,652,857 11,099,552 Bank borrowings denominated in RM 1,512,527 6,328,413 Less: unamortised transaction costs (50,909) (213,002)

Total 4,114,475 17,214,963

(2) Comprising professional fees, underwriting commission, fees payable to the relevant authorities, printing and despatch costs of this Circular and the abridged prospectus, advertising cost and cost of convening the forthcoming EGM, as follows:

Amount(RM‘000)

Professional fees 2,950.0Underwriting commission 15,840.0Fees payable to the relevant authorities 535.6Printing and despatch cost of this Circular and the abridged prospectus, advertising cost and cost of convening the forthcoming EGM

1,515.9

Total 20,841.5

Part of the proceeds from the Proposed Rights Issue of Shares with Warrants will be used to fund the estimated expenses relating to the Proposals.

The proceeds to be raised by our Company from the exercise of the Warrants are dependent on the total number of the Warrants exercised during the Exercise Period.Proceeds arising from the exercise of the Warrants will be used to satisfy the future working capital requirements of our Group and/ or repayment of borrowings, as the case may be.

Pending use of the proceeds as set out above, our Company will place the proceeds in interest-bearing deposits with financial institutions and/or short-term money market instruments as our Board deems fit. Further, proceeds from the Proposed Rights Issue of RCPS-i will be placed in deposits with Islamic financial institutions and/or Islamic short-term money market instruments. The interest derived from deposits with financial institutions and/or any gains arising from short-term money market instruments will be used for working capital purposes.

There will be no proceeds raised upon conversion of the RCPS-i into new SEB Shares, as the conversion will be satisfied by surrendering such number of RCPS-i to be converted, based on the Conversion Ratio.

7.2 Proposed ESOS

The proceeds to be raised by our Company from the exercise of the Options are dependent on the total number of Options granted and exercised, and the Options Exercise Price. As such, the amount of proceeds arising from the exercise of the Options and the time frame for use of such proceeds cannot be determined at this juncture. Proceeds arising from the exercise of the Options will be used to satisfy the future working capital requirements of our Group, if any.

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8. RATIONALE AND BENEFITS OF THE PROPOSALS

Our Group currently has three distinct business divisions, namely E&P, drilling and E&C. Over the years, each of these divisions have emerged as leaders in their respective segments and are recognised by clients for their delivery and safety performance. Currently, these divisions are funded centrally by our Group. Each of these divisions have differing growth aspirations, capital requirements and risk-reward profiles. After taking into consideration the recovery of the oil and gas industry, our Group has formulated a strategic plan that will enable these business segments to operate independently. The plan includes the Proposals and may involve a strategic partnership for our E&P business pursuant to our Company’s announcement dated 12 September 2018, details of which are set out in Section 10.3 of Part A of this Circular, as well as exploring a possible strategic partnership for our drilling business which would result in the strengthening of our Group’s core businesses.

The primary objective of the Proposals which include the Proposed Rights Issue is to reduce the borrowings of our Group, so as to strengthen our balance sheet. The stronger balance sheet would enable our Group to bid and undertake higher value projects globally. In addition, our Group will benefit from savings in financing cost arising from the lower borrowings of approximately RM174.2 million per annum. Accordingly, the Proposed Rights Issue is expected to provide our Group greater financial flexibility in pursuing and executing projects in conjunction with the improving prospects of the oil and gas industry, and improve earnings through the reduction in interest expenses.

8.1 Proposed Rights Issue of Shares with Warrants

After taking into consideration our gearing level, our Board is of the opinion that the Proposed Rights Issue of Shares with Warrants is the most appropriate means of raising funds due to the following reasons: (i) it enables our Company to raise proceeds to be used in the manner set out in

Section 7.1 of Part A of this Circular;

(ii) the Proposed Rights Issue of Shares with Warrants will further strengthen our Company’s capital base and at the same time, improve our gearing level following the reduction in the borrowings of our Group;

(iii) it provides the Entitled Shareholders with an opportunity to further increase their equity participation in our Company’s future growth and prospects amidst the gradual recovery of the oil and gas industry via subscription of the Rights Shares at the Rights Issue Price, which represents a discount to the prevailing market price of the SEB Shares, without diluting their respective equity interest, provided that such Entitled Shareholders fully subscribe for their respective entitlements for the Rights Shares; and

(iv) the Warrants attached to the Rights Shares is intended to reward and provide

the Entitled Shareholders with an option to further increase their equity participation in our Company by exercising their Warrants during the Exercise Period. The exercise of the Warrants will also strengthen the capital base of our Company and provide additional funds to our Group. In addition, the Warrants will be listed and traded separately from the SEB Shares on Bursa Securities thereby providing holders of the Warrants with an avenue to monetise the Warrants should they choose to do so.

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8.2 Proposed Rights Issue of RCPS-i

The Proposed Rights Issue of RCPS-i will enable our Company to raise the requisite funds without our Company being over-capitalised after taking into consideration the new SEB Shares to be issued pursuant to the Proposed Rights Issue of Shares with Warrants, given our Company’s right (without obligation) to redeem the RCPS-i which will allow us to manage our share base.

8.3 Proposed Exemption

The Proposed Exemption will relieve the PNB Group from the obligation to undertake the Mandatory Offer as the PNB Group does not intend to undertake the Mandatory Offer.

8.4 Proposed ESOS

Our Board is proposing to establish the Proposed ESOS to complement the LTIP to continue driving desired corporate outcomes for long term growth and sustainability. The Proposed ESOS is intended to:

(i) promote enterprise leadership currently under the stewardship of the current management team to drive returns and achievement of our Company’s long term goals;

(ii) strengthen our senior management and Executive Director’s alignment to the long term objectives and business plan of our Company as well as overall shareholders’ interest;

(iii) instil a greater sense of ownership and belonging to enhance productivity and motivate our senior management and Executive Director towards our Company’s strategic business objectives since they will have an opportunity to participate directly in the future growth of our Group; and

(iv) create a more competitive total compensation package for performing senior management and Executive Director and strengthen retention effort.

8.5 Proposed Amendments

The Proposed Amendments are meant to facilitate the implementation of the Proposed Rights Issue in respect of the issuance of RCPS-i and serving of notices by electronic form.

9. FOREIGN ADDRESSED SHAREHOLDERS

The abridged prospectus together with the accompanying documents to be issued in connection with the Proposed Rights Issue have not been prepared to, and no step or action will be taken to, ensure that such documents comply with the laws of any countries or jurisdictions other than Malaysia, and have not been and will not be lodged, registered or approved under any applicable securities legislation of any countries or jurisdictions other than Malaysia. The Proposed Rights Issue will not be offered for purchase or subscription in any country or jurisdiction in which such offer would be unlawful prior to registration or qualification under the securities laws of such country or jurisdiction.

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The abridged prospectus together with the accompanying documents will only be sent to Entitled Shareholders who have a registered address or an address for service in Malaysia as registered in our Record of Depositors as at the Entitlement Date. Foreign Addressed Shareholders who wish to provide a Malaysian address should inform their respective stockbrokers to effect the change of address prior to the Entitlement Date. Alternatively, such Foreign Addressed Shareholders may collect the abridged prospectus from our share registrar who shall be entitled to request for such evidence as they deem necessary to satisfy themselves as to the identity and authority of the person collecting the abridged prospectus together with the accompanying documents.

Our Company will not make or be bound to make any enquiry as to whether the Entitled Shareholders have a registered address other than as stated in our Record of Depositors as at the Entitlement Date and will not accept or be deemed to accept any liability whether or not any enquiry or investigation is made in connection therewith.

Foreign Addressed Shareholders may only exercise their rights in respect of the Proposed Rights Issue to the extent that it would be lawful to do so, and our Company, our share registrar and/or our advisers, in connection with the Proposed Rights Issue, would not be in breach of the laws of any country or jurisdiction which the Foreign Addressed Shareholders and Proposed Rights Issue and/or their renouncees might be subject to. No securities of our Company, including the Rights Shares with Warrants, and RCPS-i, have been or will be registered under the U.S. Securities Act, and any such securities may not be offered or sold in the United States absent registration or an available exemption from the registration requirements of the U.S. Securities Act. Any securities offered pursuant to the Proposed Rights Issue will only be offered and sold outside the United States in offshore transactions in reliance on Regulation S under the U.S. Securities Act. Copies of the abridged prospectus and accompanying documents will not be distributed in the United States or in any other jurisdiction where such distribution would be unlawful.

Foreign Addressed Shareholders will be responsible for payment of any issue, transfer or any other taxes or other requisite payments due in such foreign country or jurisdiction and ourCompany shall be entitled to be fully indemnified and held harmless by such Foreign Addressed Shareholders for any issue, transfer or any other taxes or duties as such person may be required to pay. They will have no claims whatsoever against our Company, our share registrar and/or our advisers in respect of their rights or entitlements under the Proposed Rights Issue. Such Foreign Addressed Shareholders should also consult their professional advisers as to whether they require any governmental, exchange control or other consents or need to comply with any other applicable legal requirements to enable them to exercise their rights in respect of theProposed Rights Issue.

Foreign Addressed Shareholders shall be solely responsible to seek advice as to the laws of any country or jurisdiction to which they may be subject, and participation by the Foreign Addressed Shareholders in the Proposed Rights Issue shall be on the basis of a representation and warranty by them that they may lawfully so participate without our Company, our share registrar and/or our advisers being in breach of the laws of any country or jurisdiction.

None of our Company, our share registrar nor our advisers to the Proposed Rights Issue shall accept any responsibility or liability in the event that any acceptance of a Foreign Addressed Shareholder or his/her renouncees of his/her entitlements in respect of the Proposed Rights Issue is or shall become illegal, unenforceable, voidable or void in any country or jurisdiction.

Our Company reserves the right in its absolute discretion to treat any acceptance as being invalid if our Company believes or has reason to believe that such acceptance may violate any applicable legal or regulatory requirements.

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10. INDUSTRY OVERVIEW AND PROSPECTS

10.1 Overview and outlook of the global economy

Global growth has eased but remains robust and is projected to reach 3.1% in 2018. It is expected to edge down in the next two years to 2.9% by 2020.

In advanced economies, growth remains above potential despite signs of softening. In the United States, significant fiscal stimulus will boost near-term activity. As the recovery matures over the forecast horizon and monetary policy accommodation is pared down, growth is projected to moderate toward its potential rate. As fiscal stimulus measures have been introduced and inflation has moved toward target, the Federal Reserve has signaled a faster pace of policy tightening. Recent trade policy changes are not expected to have a substantial effect on United States growth, which is projected to reach 2.7% in 2018 and edge down to 2.5% in 2019. As fiscal and monetary stimulus fade, growth is forecast to slow to 2% in 2020, above the mid-point of the 1% to 2.4% range of estimates of its potential pace.

The Euro Area economy grew 2.4% in 2017, its fastest increase since the financial crisis, reflecting strong consumption, investment, and exports. However, data releases since the start of 2018 point to decelerating activity. Headline inflation stands at 1.2%, well under the central bank target of close to, but below, 2%. Amid continued monetary policy stimulus, growth is projected to be 2.1% in 2018. It is forecast to slow to 1.7% in 2019 and 1.5% in 2020, as slack dissipates, higher oil prices weigh on consumption.

Growth in Japan reached 1.7% in 2017, underpinned by supportive financial conditions and strong exports, but contracted at the beginning of this year. Over the forecast period, growth is expected to decelerate to 1% in 2018, 0.8% in 2019, and 0.5% in 2020, as higher oil prices erode real incomes, employment growth slows, and fiscal consolidation starts to drag on growth, notably due to the effects of the value added tax hike scheduled for late 2019. The long-term growth outlook remains constrained by an aging and shrinking labor force.

In China, growth remains solid and is expected to gradually slow as rebalancing continues. Growth in China reached 6.9% in 2017 and has remained solid this year. China’s growth is projected to edge down to 6.5% in 2018 and slow further to 6.3% on average in 2019-20, as export growth moderates and deleveraging takes hold.

Growth in emerging and developing economics (“EMDE”) accelerated to 4.3% in 2017 and has generally continued to firm in 2018. EMDE growth is expected to reach 4.5% in 2018. The rebound in commodity exporters has continued, and activity in commodity importers remains robust. Beyond this year, however, EMDE growth is projected to strengthen only slightly, approaching its potential pace, as the recovery in commodity exporters matures. Activity continues to show resilience in a number of more diversified economies and agriculture exporters (e.g., Benin, Burkina Faso, Côte d’Ivoire, Ethiopia,Indonesia, Malaysia, Morocco, Senegal, Uganda), supported by higher metals prices, growth among metals exporters continues to improve, albeit at varying degrees, reflecting country-specific conditions.

(Source: World Bank. 2018. Global Economic Prospects, June 2018: The Turning of the Tide? Washington, DC: World Bank. doi: 10.1596/978-1-4648-1257-6. License: Creative Commons Attribution CC BY 3.0 IGO.)

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10.2 Overview and outlook of the oil and gas sector

OPEC crude oil supply rose during July with Saudi Arabia, United Arab Emirates (“UAE”), Kuwait and Iraq ramping-up output in accord with the June OPEC meeting decision to reduce compliance to production restraint. In effect, those nations that can are increasing production to offset losses in other OPEC countries such as Venezuela whose production has fallen nearly 1 million barrel per day (“b/d”) against the OPEC benchmark of output in October 2016. Key OPEC producers such as Saudi Arabia are trying to prevent sharp movements higher in crude prices that could potentially hurt global economic growth and oil demand.

Though remaining strong overall, US Lower 48 production also has a minor downward revision in this outlook due to slower activity in key tight oil plays, and Permian pipeline constraints capping the production. On the other hand, strengthening non-OPEC production growth outside of United States has lifted forecast slightly from a month ago with global supply now projected to increase by 2 million b/d growth in 2019, following a 2.1 million b/d gain in 2018.

Global supply continues to face turbulent times. The return of OPEC production has helped to offset production declines in Venezuela, and more recently Iran, as US secondary sanctions start to impact exports. Regardless, the outlook remains one of strong growth. Close to 2 million b/d of total liquids supply will be added in both 2018 and 2019, lifting global supply from 97.7 million b/d in 2017 to 99.8 million b/d in 2018 and 101.8 million b/d in 2019. Whilst the outlook for 2018 has been adjusted a little higher, 2019 has been revised up by 270 kb/d, predominantly due to stronger non-OPEC supply.

The current outlook has global oil demand marching steadily upward, breaching 100 million b/d during Q3 of this year and rising to 101 million b/d by late-2019. Demand averages 100.6 million b/d over the course of 2019, unchanged from previous forecast. Annual growth remains robust at 1.3 million b/d in both 2018 and 2019. The increase will continue to be led by the United States and India, underpinned by a relatively strong economic backdrop.

In Asia, Indian demand remains strong and the recent heat wave has boosted Japanese demand. China too contributes heavily to global demand growth, although not to the same extent as in previous years since gasoline's growth has slowed.

Petrochemical feedstocks are now driving most of China’s demand growth, with transportation fuels facing weak domestic consumption and tightening environmental policies.

Project sanctions in 1st half of 2018 are off to a blistering start. Twenty-four major fields made Final Investment Decision (“FID”) by June, up from just thirteen in the same period in 2017. The current growth engines are brownfield expansions largely concentrated in Saudi Arabia, UAE, and Iraq, where deepwater Gulf of Mexico had a more prominent role in 2017. In Q2 2018, Middle Eastern countries are focused on offshore shallow water liquids production, while major projects in Russia and Norway are almost exclusively seeking to develop gas.

Compared to 2017, a material shift has occurred in the size and scope of upstream developments. While we saw a previous focus on smaller, leaner developments, operators are now seeking higher capital intensity projects. The average project size has risen to 887 million barrels of oil equivalent, costing an average USD5.3 billion in investment. Both are up on 2017 numbers.

(Source: Wood Mackenzie Macro Oils short-term outlook report, September 2018, Wood Mackenzie Q2 2018 pre-FID upstream project tracker, August 2018)

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10.3 Prospects of our Group

Amidst the rebound in oil and gas prices, our Group is well-positioned to capitalise on the emerging industry opportunities which has seen a resurgence in activities and capital spend in our services segment, comprising our E&C and drilling divisions (“Services”) and our E&P business. The positive industry outlook has continued to fuel our Group’s growth in the last 12 months.

For our Services segment, our Group’s strategy during the downturn was to strengthen our presence in existing core markets in South East Asia, Mexico, Brazil, India and Australia, while opening up new markets in Europe, Middle East, East and West Africa, Caspian and the Mediterranean.

Our Group has been successful in expanding our global footprint and securing significant wins since the start of 2018. The accumulative value in contract wins for our Group as at the LPD of RM5.3 billion, which includes those awards of contracts / subcontracts / contract extensions with a combined value of approximately RM815 million announced on 24 September 2018, represents a three-fold jump compared to the value achieved in the same corresponding period of the previous year, between February to October 2017. The strategy employed has enabled our Group to grow ourorder book to RM16.9 billion as at 31 July 2018 from RM14.9 billion as at 31 January 2018.

Our Group is entering a strong growth phase today. Our Group has been recognised for its strong track record, state-of-the-art facilities and assets as well as deep technical expertise of our people. Together with global operating centres in key regions, such as Australia, South East Asia, India, Middle East, Africa, the United Kingdom, Brazil, Mexico and the United States, our Group is poised to leverage on growth opportunities as the market recovers.

On 24 August 2018, our Company announced the Proposed Rights Issue as part of our broader strategic plan to deleverage our Group’s balance sheet. The strengthened balance sheet would enable our Services segment to bid and execute higher value projects globally. As at the LPD, our Company is in active pursuit of bids worth USD7.4 billion (equivalent to RM31.0 billion) and further prospects of USD10.2 billion (equivalent to RM42.7 billion) in the key geographical markets mentioned above.

The Proposed Rights Issue forms a key component of our Group’s continuing growth strategy and is being undertaken to provide our Group with a sustainable capital base to support its operations and growth aspirations.

Apart from the success of our Services segment, our E&P business has also seen positive results in exploration, development and production activities.

To date, our E&P business has discovered a total of 9 trillion cubic feet of gas in SK310 and SK408 fields located at offshore Sarawak, Malaysia. This success is founded on our Company’s in-house strength and capabilities of its sub-surface expertise including reservoir engineering and understanding the geological fundamentals of the region. Our Group firmly believes that we can replicate this success in new markets that we have recently ventured into including Australia, New Zealand and Mexico.

On the development front, our E&P business has commenced gas production at its SK310 B15 field in October 2017 and is currently developing the Gorek, Larak and Bakong fields as part of phase 1 of its SK408 gas field development project. The SK408 field will commenced production in late 2019 or early 2020 which will contribute to an increase in net production volumes for our E&P business.

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On 12 September 2018, our Company announced that, as part of our strategic plan, we have entered into a Heads of Agreement with Austria’s OMV Aktiengesellchaft (“OMV AG”) to form a strategic partnership (“HOA”). Under the proposed terms, OMV AG intends to acquire 50% equity in our Company’s wholly-owned subsidiary, Sapura Upstream Sdn Bhd, which is involved in E&P activities based on an agreed enterprise value of USD1.6 billion (equivalent to RM6.7 billion) (“Proposed Strategic Partnership”). Subsequent to that, our Company entered into a principal sales agreement, which is binding subject to signing of the definitive agreements and relevant approvals. As at the LPD, negotiations on the definitive agreements for the Proposed Strategic Partnership is still on-going. The net proceeds from the Proposed Strategic Partnership are intended to be used for the repayment of borrowings and for working capital requirements.

By joining forces, our Company and OMV AG will be strategically positioned to create sustainable long-term growth, expand portfolios and future business activities as well as realise synergies in the value chain.

The partnership with OMV AG complements our Group’s continued strategy to grow our portfolio and expand our acreage position.

11. EFFECTS OF THE PROPOSALS

The Proposed Exemption and Proposed Amendments will not have any effect on the share capital and substantial shareholders’ shareholdings of our Company and NA per SEB Share, gearing and EPS of our Group.

For illustrative purposes only, the effects of the Proposed Rights Issue and Proposed ESOS on the share capital and substantial shareholders’ shareholding have been shown based on the following sequence:

Scenario A : completion of the Proposed Rights Issue followed by the exercise of the ESOS Options, conversion of the RCPS-i and exercise of the Warrants.

Scenario B : completion of the Proposed Rights Issue followed by the conversion of the RCPS-i, exercise of the Warrants and exercise of the ESOS Options.

11.1 Share capital

The Proposed ESOS will not have an immediate effect on the issued share capital of our Company until such time when the new SEB Shares are issued pursuant to the exercise of the ESOS Options. The issued share capital of our Company will increase progressively as and when new SEB Shares are issued arising from the exercise of the ESOS Options. In any case, the new Shares to be issued pursuant to the exercise of the ESOS Options shall not exceed the Maximum Shares.

28

29

The pro forma effects of the Proposed Rights Issue and Proposed ESOS on the issued share capital of our Company are as follows:

Scenario A

No. of SEB Shares Amount

No. of RCPS-i Amount

(‘000) (RM‘000) (‘000) (RM‘000)

As at the LPD 5,992,155 (1) 8,066,410 - -

To be issued pursuant to the Proposed Rights Issue of Shares with Warrants

9,986,925 (2) 2,857,571 - -

To be issued pursuant to the Proposed Rights Issue of RCPS-i

- - 2,396,862 982,713

To be issued assuming full exercise of the ESOS Options

(3) 1,597,908 (4) 495,351 - -

To be issued assuming full conversion of the RCPS-i

2,396,862 982,713 (2,396,862) (982,713)

To be issued assuming full exercise of the Warrants

998,693 489,359 - -

Transfer of warrants reserve to share capital pursuant to the full exercise of the Warrants

- (2)(5) 117,665 - -

Enlarged issued share capital 20,972,543 13,009,070 - -

Notes:

(1) Under the no par value regime of the Act which came into effect on 31 January 2017, the concept of share premium will no longer be applicable and any amount standing to the credit of our Company’s share premium account has been consolidated as part of its share capital.

(2) After deducting estimated expenses relating to the Proposals of approximately RM20.8 million.

(3) Assuming 1,597.9 million ESOS Options are granted and exercised, representing 10% of the total number of issued SEB Shares after the Proposed Rights Issue of Shares with Warrants of 15,979.1 million SEB Shares.

(4) Calculated based on an assumed Options Exercise Price of RM0.31, which represents the TERP of SEB Shares based on the five (5)-day WAMP of SEB Shares up to and including the LPD of RM0.33.

(5) Computed based on the theoretical fair value of RM0.14 per Warrant as at the LPD based on the Exercise Price measured using the Trinomial Option Pricing Model.

29

30

Scenario B

No. of SEB Shares Amount

No. of RCPS-i Amount

(‘000) (RM‘000) (‘000) (RM‘000)

As at the LPD 5,992,155 (1) 8,066,410 - -

To be issued pursuant to the Proposed Rights Issue of Shares with Warrants

9,986,925 (2) 2,857,571 - -

To be issued pursuant to the Proposed Rights Issue of RCPS-i

- - 2,396,862 982,713

To be issued assuming full conversion of the RCPS-i

2,396,862 982,713 (2,396,862) (982,713)

To be issued assuming full exercise of the Warrants

998,693 489,359 - -

Transfer of warrants reserve to share capital pursuant to the full exercise of the Warrants

- (2)(3) 117,665 - -

To be issued assuming full exercise of the ESOS Options

(4) 1,937,463 (5) 600,614 - -

Enlarged issued share capital 21,312,098 13,114,332 - -

Notes:

(1) Under the no par value regime of the Act which came into effect on 31 January 2017, the concept of share premium will no longer be applicable and any amount standing to the credit of our Company’s share premium account has been consolidated as part of its share capital.

(2) After deducting estimated expenses relating to the Proposals of approximately RM20.8 million.

(3) Computed based on the theoretical fair value of RM0.14 per Warrant as at the LPD based on the Exercise Price measured using the Trinomial Option Pricing Model.

(4) Assuming 1,937.5 million ESOS Options are granted and exercised, representing 10% of the total number of issued SEB Shares after the Proposed Rights Issue of Shares with Warrants and assuming full conversion of the RCPS-i and full exercise of the Warrants of 19,374.6 million SEB Shares.

(5) Calculated based on an assumed Options Exercise Price of RM0.31, which represents the TERP of SEB Shares based on the five (5)-day WAMP of SEB Shares up to and including the LPD of RM0.33.

30

31

11.2

Subs

tant

ial s

hare

hold

ers’

sha

reho

ldin

gs

The

Prop

osed

ESO

S is

not

exp

ecte

d to

hav

e an

y im

med

iate

effe

ct o

n th

e sh

areh

oldi

ngs

of th

e su

bsta

ntia

l sha

reho

lder

s of

our

Com

pany

unt

il su

ch t

ime

whe

n th

e ne

w S

EB

Shar

es a

re is

sued

pur

suan

t to

the

exe

rcis

e of

the

ESO

S O

ptio

ns.

Any

pote

ntia

l effe

ct o

n th

e su

bsta

ntia

l sh

areh

olde

rs’ s

hare

hold

ing

in o

ur C

ompa

ny w

ill de

pend

on

the

num

ber o

f new

SEB

Sha

res

to b

e is

sued

aris

ing

from

the

exer

cise

of t

he E

SOS

Opt

ions

at t

he re

leva

nt p

oint

in ti

me.

For i

llust

rativ

e pu

rpos

es o

nly,

ass

umin

g al

l the

Ent

itled

Sha

reho

lder

s su

bscr

ibe

in fu

ll th

eir r

espe

ctiv

e en

title

men

ts u

nder

the

Prop

osed

Rig

hts

Issu

e, th

e pr

o fo

rma

effe

cts

of th

e Pr

opos

ed R

ight

s Is

sue

and

Prop

osed

ESO

S o

n th

e sh

areh

oldi

ngs

of th

e su

bsta

ntia

l sha

reho

lder

s of

our

C

ompa

ny b

ased

on

the

Reg

iste

r of S

ubst

antia

l Sha

reho

lder

s of

our

Com

pany

as

at th

e LP

D a

re a

s fo

llow

s:

Pro

form

a I

Pro

form

a II

As

at th

e LP

DA

fter t

he P

ropo

sed

Rig

hts

Issu

e of

Sha

res

with

War

rant

sA

fter P

ro fo

rma

I and

the

Prop

osed

Rig

hts

Issu

e of

RC

PS-i

Dire

ctIn

dire

ctD

irect

Indi

rect

Dire

ctIn

dire

ct

Nam

eN

o. o

f SEB

Sh

ares

%N

o. o

f SEB

Sh

ares

%N

o. o

f SEB

Sh

ares

%N

o. o

f SE

B S

hare

s%

No.

of S

EB

Shar

es%

No.

of S

EB

Shar

es%

(‘000

)(‘0

00)

(‘000

)(‘0

00)

(‘000

)(‘0

00)

STS

B95

3,00

4 15

.90

6,52

2 (1

) 0.1

1 2,

541,

345

15.9

0 17

,392

(1

) 0.1

1 2,

541,

345

15.9

0 17

,392

(1

) 0.1

1 S

apur

a H

oldi

ngs

Sdn

Bhd

(“

SHSB

”)-

-1,

007,

545

(2) 1

6.81

-

-2,

686,

786

(2) 1

6.81

-

-2,

686,

786

(2) 1

6.81

TSS

37,8

12

0.63

1,

007,

545

(3) 1

6.81

10

0,83

1 0.

63

2,68

6,78

6 (3

) 16.

81

100,

831

0.63

2,

686,

786

(3) 1

6.81

D

SS

506

0.01

1,

007,

545

(3) 1

6.81

1,

350

0.01

2,

686,

786

(3) 1

6.81

1,

350

0.01

2,

686,

786

(3) 1

6.81

B

roth

ers

Cap

ital S

dn B

hd-

-1,

007,

545

(3) 1

6.81

-

-2,

686,

786

(3) 1

6.81

-

-2,

686,

786

(3) 1

6.81

K

umpu

lan

Wan

gP

ersa

raan

(D

iper

bada

nkan

) (“

KW

AP”

)

411,

558

6.87

47

,585

(4

)0.

79

1,09

7,48

7 6.

87

126,

893

(4)0.

79

1,09

7,48

76.

87

126,

893

(4)0.

79

AR

T -A

SB

387,

000

6.46

-

-1,

032,

000

6.46

-

-1,

032,

000

6.46

-

-

31

32

Scen

ario

A

Pro

form

a III

Pro

form

a IV

Pro

form

a V

Afte

r Pro

form

a II

and

assu

min

g fu

ll ex

erci

se o

f the

ESO

S O

ptio

ns (5

)A

fter P

ro fo

rma

III a

nd a

ssum

ing

full

conv

ersi

on o

f the

RC

PS-i

Afte

r Pro

form

a IV

and

ass

umin

g fu

ll ex

erci

se o

f the

War

rant

sD

irect

Indi

rect

Dire

ctIn

dire

ctD

irect

Indi

rect

Nam

eN

o.of

SEB

Sh

ares

%N

o. o

f SEB

Sh

ares

%N

o. o

f SEB

Sh

ares

%N

o. o

f SE

B S

hare

s%

No.

of S

EB

Shar

es%

No.

of S

EB

Shar

es%

(‘000

)(‘0

00)

(‘000

)(‘0

00)

(‘000

)(‘0

00)

STS

B2,

541,

345

14.4

617

,392

(1

) 0.1

0 2,

922,

547

14.6

320

,001

(1

) 0.1

0 3,

081,

381

14.6

921

,088

(1

) 0.1

0 S

HS

B-

-2,

686,

786

(2) 1

5.29

--

3,08

9,80

4 (2

) 15.

47-

-3,

257,

728

(2) 1

5.53

TSS

899,

785

5.12

2,

686,

786

(3) 1

5.29

91

4,91

0 4.

58

3,08

9,80

4 (3

) 15.

4792

1,21

2 4.

39

3,25

7,72

8 (3

) 15.

53

DS

S1,

350

0.01

2,

686,

786

(3) 1

5.29

1,55

3 0.

01

3,08

9,80

4 (3

) 15.

471,

637

0.01

3,

257,

728

(3) 1

5.53

Bro

ther

s C

apita

l Sdn

Bhd

--

2,68

6,78

6 (3

) 15.

29-

-3,

089,

804

(3) 1

5.47

--

3,25

7,72

8 (3

) 15.

53KW

AP

1,09

7,48

7 6.

2412

6,89

3 (4

) 0.7

21,

262,

110

6.32

145,

926

(4) 0

.73

1,33

0,70

3 6.

3415

3,85

7 (4

) 0.7

3A

RT

-AS

B1,

032,

000

5.87

--

1,18

6,80

0 5.

94-

-1,

251,

300

5.97

--

Scen

ario

BPr

o fo

rma

IIIPr

o fo

rma

IVPr

o fo

rma

VA

fter P

ro fo

rma

II an

d as

sum

ing

full

conv

ersi

on o

f the

RC

PS-i

Afte

r Pro

form

a III

and

assu

min

g fu

ll ex

erci

se

of th

e W

arra

nts

Afte

r Pro

form

a IV

and

ass

umin

g fu

ll ex

erci

se o

f the

ESO

S O

ptio

ns (6

)

Dire

ctIn

dire

ctD

irect

Indi

rect

Dire

ctIn

dire

ct

Nam

eN

o. o

f SEB

Sh

ares

%N

o. o

f SEB

Sh

ares

%N

o. o

f SEB

Sh

ares

%N

o. o

f SE

B S

hare

s%

No.

of S

EB

Shar

es%

No.

of S

EB

Shar

es%

(‘000

)(‘0

00)

(‘000

)(‘0

00)

(‘000

)(‘0

00)

STS

B2,

922,

547

15.9

0 20

,001

(1

)0.

11

3,08

1,38

1 15

.90

21,0

88

(1)0.

11

3,08

1,38

1 14

.46

21,0

88

(1)0.

10

SH

SB

--

3,08

9,80

4 (2

) 16.

81

--

3,25

7,72

8 (2

)16

.81

--

3,25

7,72

8 (2

)15

.29

TSS

115,

956

0.63

3,

089,

804

(3) 1

6.81

12

2,25

8 0.

63

3,25

7,72

8 (3

)16

.81

1,09

0,99

0

5.12

3,25

7,72

8 (3

)15

.29

DS

S1,

553

0.01

3,

089,

804

(3) 1

6.81

1,

637

0.01

3,

257,

728

(3)16

.81

1,63

7 0.

01

3,25

7,72

8 (3

)15

.29

Bro

ther

s C

apita

l Sdn

Bhd

--

3,08

9,80

4 (3

) 16.

81

--

3,25

7,72

8 (3

)16

.81

--

3,25

7,72

8 (3

)15

.29

KWA

P1,

262,

110

6.87

14

5,92

6 (4

)0.

79

1,33

0,70

3 6.

87

153,

857

(4)

0.79

1,

330,

703

6.24

15

3,85

7 (4

)0.

72

AR

T -A

SB

1,18

6,80

0 6.

46

--

1,25

1,30

0 6.

46

--

1,25

1,30

0 5.

87

--

Not

es:

(1)

Dee

med

inte

rest

ed b

y vi

rtue

of it

s sh

areh

oldi

ng in

Jur

udat

a Sd

n B

hd p

ursu

ant t

o Se

ctio

n 8

of th

e Ac

t. (2

) D

eem

ed in

tere

sted

by

virtu

e of

bei

ng a

sub

stan

tial s

hare

hold

er o

f STS

B, S

apur

a R

esou

rces

Ber

had,

Sap

ura

Cap

ital S

dn B

hd, I

nder

a P

erm

ai S

dn B

hd a

nd

Juru

data

Sdn

Bhd

pur

suan

t to

Sec

tion

8 of

the

Act

. (3

) D

eem

ed in

tere

sted

by

virtu

e of

bei

ng a

sub

stan

tial s

hare

hold

er o

f SH

SB

pur

suan

t to

Sec

tion

8 of

the

Act.

(4)

Tota

l sha

reho

ldin

gs m

anag

ed b

y K

WA

P’s

fund

man

ager

s pu

rsua

nt to

Sec

tion

8 of

the

Act.

(5)

Ass

umin

g 79

9.0

mill

ion

ES

OS

Opt

ions

are

gra

nted

to a

nd e

xerc

ised

by

TSS,

repr

esen

ting

5% o

f the

tota

l num

ber o

f iss

ued

SE

B S

hare

s af

ter t

he P

ropo

sed

Rig

hts

Issu

e of

Sha

res

with

War

rant

s.

(6)

Ass

umin

g 96

8.7

mill

ion

ES

OS

Opt

ions

are

gra

nted

to a

nd e

xerc

ised

by

TSS,

repr

esen

ting

5% o

f the

tota

l num

ber o

f iss

ued

SE

B S

hare

s af

ter t

he P

ropo

sed

Rig

hts

Issu

e of

Sha

res

with

War

rant

s an

d as

sum

ing

full

conv

ersi

on o

f the

RC

PS

-i an

d fu

ll ex

erci

se o

f the

War

rant

s.

32

33

For i

llust

rativ

e pu

rpos

es o

nly,

ass

umin

g on

ly th

e U

nder

taki

ng S

hare

hold

ers

subs

crib

es th

eir r

espe

ctiv

e en

title

men

ts b

ased

on

the

Und

erta

king

s an

d on

ly A

SB

subs

crib

es fo

r the

Exc

ess

Rig

hts

Shar

es a

nd a

ll the

rem

aini

ng R

CPS

-i no

t tak

en u

p or

not

val

idly

take

n up

by

othe

r Ent

itled

Sha

reho

lder

s an

d/or

thei

r ren

ounc

ees

by w

ay o

f exc

ess

appl

icat

ion

in re

spec

t of t

he c

omm

itted

exc

ess

appl

icat

ion

purs

uant

to th

e PN

B U

nder

taki

ng a

nd th

e Fu

nds’

Und

erta

king

und

er th

e Pr

opos

ed

Rig

hts

Issu

e, th

e pr

o fo

rma

effe

cts

of th

ePr

opos

ed R

ight

s Is

sue

and

Prop

osed

ESO

S on

the

shar

ehol

ding

s of

the

subs

tant

ial s

hare

hold

ers

of o

ur C

ompa

ny

base

d on

the

Reg

iste

r of S

ubst

antia

l Sha

reho

lder

s of

our

Com

pany

as

at th

e LP

Dar

e as

follo

ws:

Pro

form

a I

Pro

form

a II

As

at th

e LP

DA

fter t

he P

ropo

sed

Rig

hts

Issu

e of

Sha

res

with

War

rant

sA

fter P

ro fo

rma

I and

the

Prop

osed

Rig

hts

Issu

e of

RC

PS-i

Dire

ctIn

dire

ctD

irect

Indi

rect

Dire

ctIn

dire

ct

Nam

eN

o. o

f SEB

Sh

ares

%N

o. o

f SEB

Sh

ares

%N

o. o

f SEB

Sh

ares

%N

o. o

f SE

B S

hare

s%

No.

of S

EB

Shar

es%

No.

of S

EB

Shar

es%

(‘000

)(‘0

00)

(‘000

)(‘0

00)

(‘000

)(‘0

00)

STS

B95

3,00

4 15

.90

6,52

2 (1

) 0.1

1 1,

953,

004

12.2

2 6,

522

(1) 0

.04

1,95

3,00

4 12

.22

6,52

2 (1

) 0.

04

SH

SB

--

1,00

7,54

5 (2

) 16.

81

--

2,00

7,54

5 (2

) 12.

56

--

2,00

7,54

5 (2

) 12.

56

TSS

37,8

12

0.63

1,

007,

545

(3) 1

6.81

37

,812

0.

24

2,00

7,54

5 (3

) 12.

56

37,8

12

0.24

2,

007,

545

(3) 1

2.56

D

SS

506

0.01

1,

007,

545

(3) 1

6.81

50

60.

00

2,00

7,54

5 (3

) 12.

56

506

0.00

2,

007,

545

(3) 1

2.56

B

roth

ers

Cap

ital S

dn B

hd-

-1,

007,

545

(3) 1

6.81

-

-2,

007,

545

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36

The Proposed ESOS is not expected to have an immediate effect on the NA per SEB Share and gearing of our Group until such time when the ESOS Options are exercised. The effects on the NA per SEB Share and gearing of our Group will depend on, among others, the Options Exercise Price, and the number of new SEB Shares to be issued arising from the exercise of the ESOS Options.

For illustration purposes only, upon exercise of the ESOS Options, the NA per SEB Share is expected to:

(i) increase if the Options Exercise Price is higher than the NA per SEB Share; or

(ii) decrease if the Options Exercise Price is lower than the NA per SEB Share,

at such point of exercise.

11.4 Earnings and EPS

The Proposed Rights Issue is not expected to have any material effect on the earnings of our Group for the FYE 31 January 2019 as it is expected to be completed in the first quarter of 2019. Our Group registered a loss for the FYE 31 January 2018 largely due to impairment for its drilling business. Assuming the loss remains unchanged, upon completion of the Proposed Rights Issue of Shares with Warrants, the loss per SEB Share will reduce proportionately as a result of the increase in the weighted average number of SEB Shares in issue. The loss per SEB Share will reduce further as a result of the increase in the number of SEB Shares arising from the conversion of the RCPS-i on the RCPS-i Maturity Date and the exercise of the Warrants during the Exercise Period, if any.

For illustrative purposes only, based on the audited consolidated statement of comprehensive income of our Company as at 31 January 2018 and on the assumption that the Proposed Rights Issue had been completed on 1 February 2017, being the beginning of the FYE 31 January 2018, the proforma effects of the Proposed Rights Issue on our Company’s consolidated earnings and EPS are as follows:

(RM‘000)

Loss attributable to owner of our Company for the FYE 31 January 2018

(2,503,473)

Less: Accelerated amortisation of transaction cost arising from the repayment of borrowings pursuant to (1):

- the Proposed Rights Issue of Shares with Warrants (46,400)- the Proposed Rights Issue of RCPS-i (15,326)

Add: Annual estimated savings in finance cost upon repayment of borrowings (1)

174,150

Adjusted loss attributable to owner of our Company for the FYE 31 January 2018 after the Proposed Rights Issue

(2,391,049)

Number of SEB Shares in issue for the FYE 31 January 2018 (‘000) (2)

5,992,155

Adjusted number of SEB Shares in issue after the Proposed Rights Issue (‘000)

(3) 15,979,080

Loss per SEB Share for the FYE 31 January 2018 (sen) (4) (41.78)Adjusted loss per SEB Share after the Proposed Rights Issue (sen) (5) (14.96)

36

1

PART B

IAL FROM MERCURY SECURITIES TO THE NON-INTERESTED SHAREHOLDERS OFSEB IN RELATION TO THE PROPOSED EXEMPTION

44

EXECUTIVE SUMMARY

2

All definitions used in this Executive Summary shall have the same meaning as the words and expressions defined in the “Definitions” section of the Circular, except where the context otherwise requires or where otherwise defined in this IAL. All references to “we”, “us” or “our” in this IAL are references to Mercury Securities, being the Independent Adviser for the Proposed Exemption.

This Executive Summary summarises this IAL. You are advised to read and understand this IAL in its entirety, together with the letter from the Board to the shareholders of SEB in relation to the Proposals and Proposed Grant in Part A of the Circular and the accompanying appendices for other relevant information and not to rely solely on this Executive Summary in forming an opinion on the Proposed Exemption.

You are also advised to carefully consider the recommendations contained in both the letters before voting on the ordinary resolution in respect of the Proposed Exemption to be tabled at the forthcoming EGM.

If you are in doubt as to the course of action to be taken, you should consult your stockbroker, bank manager, solicitor, accountant or other professional advisers immediately.

1. INTRODUCTION

On 24 August 2018, Maybank IB, on behalf of the Board, announced that SEB intends to undertake a recapitalisation exercise to raise the Intended Gross Proceeds (i.e. a total of RM3.98 billion) via the Proposed Rights Issue.

Subsequently on 25 September 2018, Maybank IB, on behalf of the Board, announced that SEB has procured the Undertaking Letters from the Undertaking Shareholders.

Further to the above and in conjunction with the Proposed Rights Issue, an exemption from the SC will be sought by the PNB Group under Paragraphs 4.08(1)(b) and 4.08(1)(c) of the Rules from the obligation to undertake the Mandatory Offer.

Please refer to Section 4, Part A of the Circular and Section 1 of this IAL for further details of the Proposed Exemption.

On 25 September 2018, Mercury Securities was appointed by SEB pursuant to the Rules to act as the Independent Adviser to the non-interested Directors and non-interested shareholders of SEB on the Proposed Exemption. Mercury Securities subsequently declared its independencefrom any conflict of interest or potential conflict of interest to the SC in relation to its role as the Independent Adviser for the Proposed Exemption.

The SC had on 5 November 2018 notified that it has no further comments to the contents of this IAL. However, such notification shall not be taken to suggest that the SC agrees with the recommendation of the Independent Adviser or assumes responsibility for the correctness of any statements made or opinions or reports expressed in this IAL.

The Proposed Rights Issue of Shares with Warrants, the Proposed Rights Issue of RCPS-i and the Proposed Exemption are inter-conditional. Hence, in the event that the non-interested shareholders of SEB or the SC does not approve the Proposed Exemption, the Proposed Rights issue will not be implemented.

The purpose of this IAL is to provide the non-interested shareholders of SEB with an independent evaluation on the Proposed Exemption on a holistic basis together with our recommendation on whether the non-interested shareholders of SEB should vote in favour of or against the Proposed Exemption.

Please refer to Section 1 of this IAL for further details.

EXECUTIVE SUMMARY

2

All definitions used in this Executive Summary shall have the same meaning as the words and expressions defined in the “Definitions” section of the Circular, except where the context otherwise requires or where otherwise defined in this IAL. All references to “we”, “us” or “our” in this IAL are references to Mercury Securities, being the Independent Adviser for the Proposed Exemption.

This Executive Summary summarises this IAL. You are advised to read and understand this IAL in its entirety, together with the letter from the Board to the shareholders of SEB in relation to the Proposals and Proposed Grant in Part A of the Circular and the accompanying appendices for other relevant information and not to rely solely on this Executive Summary in forming an opinion on the Proposed Exemption.

You are also advised to carefully consider the recommendations contained in both the letters before voting on the ordinary resolution in respect of the Proposed Exemption to be tabled at the forthcoming EGM.

If you are in doubt as to the course of action to be taken, you should consult your stockbroker, bank manager, solicitor, accountant or other professional advisers immediately.

1. INTRODUCTION




Please refer to Section 4, Part A of the Circular and Section 1 of this IAL for further details of the Proposed Exemption.

On 25 September 2018, Mercury Securities was appointed by SEB pursuant to the Rules to act as the Independent Adviser to the non-interested Directors and non-interested shareholders of SEB on the Proposed Exemption. Mercury Securities subsequently declared its independencefrom any conflict of interest or potential conflict of interest to the SC in relation to its role as the Independent Adviser for the Proposed Exemption.


The Proposed Rights Issue of Shares with Warrants, the Proposed Rights Issue of RCPS-i and the Proposed Exemption are inter-conditional. Hence, in the event that the non-interested shareholders of SEB or the SC does not approve the Proposed Exemption, the Proposed Rights issue will not be implemented.


Please refer to Section 1 of this IAL for further details.

45

EXECUTIVE SUMMARY (cont’d)

3

2. EVALUATION OF THE PROPOSED EXEMPTION In arriving at our conclusion and recommendation, we have assessed and evaluated the Proposed Exemption on a holistic basis in accordance with Schedule 2: Part III of the Rules. In our evaluation of the Proposed Exemption, we have considered the following factors (see Section 5 of this IAL for further details):- (I) Rationale for the Proposed Rights Issue, Proposed Exemption and Proposed

Amendments Proposed Rights Issue SEB was formed pursuant to the merger between SapuraCrest Petroleum Berhad and Kencana Petroleum Berhad in 2012 (“Merger”). The Group offers services such as engineering and construction, drilling services as well as exploration and production for the upstream sector of the O&G industry. The Group’s business segments are capital intensive in nature, whereby it requires high upfront capital expenditure. SEB had since its listing on the Main Market of Bursa Securities on 17 May 2012, invested significantly on its asset base. The Group’s total assets increased by RM14.8 billion or 97% from RM15.2 billion as at 31 January 2013 to RM30.0 billion as at 31 January 2018. With the O&G industry at its peak, SEB had also vigorously expanded its business to other services in the O&G value chain as well as to other countries. The Group’s funding needs for capital expenditure and working capital have been met mainly via internally generated funds and bank borrowings. As a result, the Group’s borrowings have grown significantly by 188% from RM5.9 billion as at 31 January 2013 to RM17.0 billion as at 31 January 2015 (see Section 5.1 of this IAL for further details). While there has been a net repayment of approximately USD852 million (equivalent to approximately RM3.3 billion(1)) of the Group borrowings since 1 January 2015 up to 31 July 2018, this was offset by the strengthening of USD against RM for its USD-denominated borrowings thereby resulting in its borrowings to stand at RM16.9 billion as at 31 July 2018. Note:- (1) Based on the exchange rate of USD1:RM3.8945, being the middle rate quoted by Bank

Negara Malaysia at 12.00 p.m. as at 30 January 2018.

In 2014, the benchmark Brent crude oil price plunged from a peak of approximately USD115 per barrel in June 2014 to a low of approximately USD57 per barrel in December 2014 (based on last transacted price). As a result of subdued upstream activity, fewer contracts were available for SEB and other O&G service providers thereby leading to the Group recording a loss which was mainly due to lower contract revenue as well as provisions for impairment recorded for its O&G assets. The weaker financial performance of the Group in recent years has affected the Group’s ability to pare down its existing large borrowings going forward. Since 2016, there has been a gradual recovery in crude oil prices with the benchmark Brent crude oil price recovering from a low of USD27 per barrel in January 2016 to the current region of USD81 per barrel in October 2018 (based on last transacted price). In order to take advantage of the emerging opportunities in light of the current oil price level, SEB has already begun undertaking several initiatives such as undertaking various measures to cut costs (including optimising supply chains as well as cold-stacking of drilling rigs and support vessels), reprioritising capital expenditure plans, revisiting investment decisions and optimising capital structure. With the gradual recovery of the O&G industry, the Group is planning to implement plans to enable its 3 business segments to operate independently so as to strengthen them, including a strategic partnership for its exploration and production (“E&P”) business and possibly its drilling services business.


3






3






3






3






3





46


3

2. EVALUATION OF THE PROPOSED EXEMPTION

In arriving at our conclusion and recommendation, we have assessed and evaluated the Proposed Exemption on a holistic basis in accordance with Schedule 2: Part III of the Rules.

In our evaluation of the Proposed Exemption, we have considered the following factors (see Section 5 of this IAL for further details):-

(I) Rationale for the Proposed Rights Issue, Proposed Exemption and Proposed Amendments

Proposed Rights Issue

SEB was formed pursuant to the merger between SapuraCrest Petroleum Berhad and Kencana Petroleum Berhad in 2012 (“Merger”). The Group offers services such as engineering and construction, drilling services as well as exploration and production for the upstream sector of the O&G industry. The Group’s business segments are capital intensive in nature, whereby it requires high upfront capital expenditure.

SEB had since its listing on the Main Market of Bursa Securities on 17 May 2012, invested significantly on its asset base. The Group’s total assets increased by RM14.8 billion or 97% from RM15.2 billion as at 31 January 2013 to RM30.0 billion as at 31 January 2018. With the O&G industry at its peak, SEB had also vigorously expanded its business to other services in the O&G value chain as well as to other countries. The Group’s funding needs for capital expenditure and working capital have been met mainly via internally generated funds and bank borrowings.

As a result, the Group’s borrowings have grown significantly by 188% from RM5.9 billion as at 31 January 2013 to RM17.0 billion as at 31 January 2015 (see Section 5.1 of this IAL for further details). While there has been a net repayment of approximately USD852 million (equivalent to approximately RM3.3 billion(1)) of the Group borrowings since 1 January 2015 up to 31 July 2018, this was offset by the strengthening of USD against RM for its USD-denominated borrowings thereby resulting in its borrowings to stand at RM16.9 billion as at 31 July 2018.

Note:- (1) Based on the exchange rate of USD1:RM3.8945, being the middle rate quoted by Bank


In 2014, the benchmark Brent crude oil price plunged from a peak of approximately USD115 per barrel in June 2014 to a low of approximately USD57 per barrel in December 2014 (based on last transacted price). As a result of subdued upstream activity, fewer contracts were available for SEB and other O&G service providers thereby leading to the Group recording a loss which was mainly due to lower contract revenue as well as provisions for impairment recorded for its O&G assets.

With the weaker financial performance of the Group in recent years, the Group was unable to rely entirely on internally generated funds to service its bank borrowings.

Since 2016, there has been a gradual recovery in crude oil prices with the benchmark Brent crude oil price recovering from a low of USD27 per barrel in January 2016 to the current region of USD81 per barrel in October 2018 (based on last transacted price).

In order to take advantage of the emerging opportunities in light of the current oil price level, SEB has already begun undertaking several initiatives such as undertaking various measures to cut costs (including optimising supply chains as well as cold-stacking of drilling rigs and support vessels), reprioritising capital expenditure plans, revisiting investment decisions and optimising capital structure. With the gradual recovery of the O&G industry, the Group is planning to implement plans to enable its 3 business segments to operate independently so as to strengthen them, including a strategic partnership for its exploration and production (“E&P”) business and possibly its drilling services business.


4

In terms of the strategic partnership for its E&P business, on 12 September 2018, SEB entered into a Heads of Agreement with Austria’s OMV Aktiengesellschaft for the sale of 50% stake in SEB’s wholly-owned subsidiary, Sapura Upstream Sdn Bhd (“Proposed Strategic Partnership”). Subsequent to that, SEB entered into a principal sales agreement, which is binding subject to signing of the definitive agreements and relevant approvals. As at the LPD, negotiations on the definitive agreements for the Proposed Strategic Partnership is still on-going. The strategic partnership is expected to complement the Group’s continued strategy to grow its portfolio and expand its acreage position while providing certainty on the Group’s monetisation plan to help address SEB’s cash requirements in the near term. The net proceeds from the Proposed Strategic Partnership are intended to be utilised for the repayment of borrowings and for working capital requirements.

The recapitalisation exercise is imperative in order for the Group to strengthen its financial position as the O&G industry enters a new business cycle. The proceeds raised through the recapitalisation exercise will be utilised to repay RM3.96 billion of the Group’s borrowings. As at 31 July 2018, the Group’s borrowings stood at RM16.87 billion. The Proposed Rights Issue would reduce the Group’s existing borrowings by approximately 23% and strengthen its balance sheet, which would enable the Group to demonstrate financial capability to undertake larger-scale projects globally and enable the Group to increase the quantity of higher value bids.

The Proposed Rights Issue is the most appropriate means of raising funds for the Group, after considering the rationale of the recapitalisation exercise and its benefits to all shareholders of SEB as well as the intended utilisation of the proceeds, whereby:-

(i) an opportunity is provided for all the Entitled Shareholders to further increase their equity participation in SEB’s future growth and prospects amidst the gradual recovery of the O&G industry via subscription of the Rights Shares (with cash outlay at the Rights Issue Price of RM0.30) at a discount to the TERP (based on the prevailing market price of the SEB Shares up to the LPD) and subscription of the RCPS-i (with cash outlay at the RCPS-i Issue Price ofRM0.41) which shall be automatically converted into SEB Shares at the end of its 5-year tenure, without diluting their respective percentage of shareholdings in SEB, provided that such Entitled Shareholders fully subscribe for their respective entitlements for the Rights Shares and RCPS-i.

Nevertheless, in deciding whether to further increase equity participation in SEB, the Entitled Shareholders shall take into consideration the financial position of the Company, of which is expected to improve in view of the potential benefits from the recapitalisation exercise and the expected recovery of the O&G industry as detailed in Section 10 of this IAL;

(ii) the features of the RCPS-i including the preferential dividends and yield on redemption as set out in Appendix II of the Circular will provide an added incentive to the Entitled Shareholders to subscribe for the RCPS-i;

(iii) the free Warrants attached to the Rights Shares will provide an added incentive to the Entitled Shareholders to subscribe for the Rights Shares while providing additional funds to the Group (through the exercise of the Warrants, if they are in-the-money) to satisfy the future working capital requirements of the Group and/or repayment of borrowings;

(iv) as the Warrants will be listed on the Main Market of Bursa Securities, Entitled Shareholders will have the option to either further increase their equity participation in SEB by exercising the Warrants (if they are in-the-money) or monetise the Warrants via disposal in the open market;

(v) as the RCPS-i will be listed on the Main Market of Bursa Securities, Entitled Shareholders will have the option to monetise the RCPS-i via disposal in the open market instead of waiting for the automatic conversion of the RCPS-i into SEB Shares at its maturity date after 5 years; and


4











4











4











4











4











4











4











4










47


3
















5

(vi) 99.5% of the total gross proceeds to be raised from the recapitalisation exercise will be used for the repayment of bank borrowings, which will benefit the Group in terms of stronger financial position, finance cost savings and reduced exposure to interest rate fluctuations.

Proposed Exemption

In view of the funding requirements of the SEB Group as well as the conditionality of the Proposed Rights Issue, Proposed Exemption and Proposed Amendments as set out in Section 12, Part A of the Circular, without the Proposed Exemption, the recapitalisation exercise will not proceed and accordingly, the potential benefits arising from the recapitalisation exercise as detailed in Section 10 of this IAL will not materialise.

Proposed Amendments

The Proposed Amendments entail amendments to the relevant clauses of the Constitution to facilitate the Proposed Rights Issue in respect of the issuance of the RCPS-i and serving of notices by electronic form.

(II) Rights Issue Price, Implied Conversion Price and Exercise Price

We are of the view that the basis and justification for the Rights Issue Price, Implied Conversion Price and Exercise Price are justifiable after taking into consideration the following factors:-

(i) the subscription by the Undertaking Shareholders of the Excess Rights Shares and excess RCPS-i via excess application will be on terms which are identical to those offered to all other Entitled Shareholders. In this respect, the Undertaking Shareholders do not gain any advantage or additional entitlement over the non-interested shareholders of SEB;

(ii) the entitlements for the Proposed Rights Issue are proportionate to the respective shareholdings of Entitled Shareholders on the Entitlement Date. Should all the Entitled Shareholders and/or their renouncee(s) subscribe in full their entitlements under the Proposed Rights Issue, there will not be any Excess Rights Share or excess RCPS-i to be subscribed by the Undertaking Shareholders;

(iii) the Rights Issue Price of RM0.30 represents discounts ranging between 3.2% to 28.6% to the TERP of SEB Shares up to and including the LPD as well as a discount of 81.0% to the audited consolidated NA per SEB Share as at 31 January 2018 of RM1.58 and accordingly, should encourage the subscription of Rights Shares by the Entitled Shareholders;

(iv) although the Implied Conversion Price of RM0.41 is equivalent to the TERP of RM0.41 based on the 5-day VWAMP of the SEB Shares up to and including the Announcement LTD of RM0.59, it represents a discount of 74.1% to the audited consolidated NA per SEB Share as at 31 January 2018 of RM1.58. In addition, the following features of the RCPS-i should encourage the subscription of RCPS-i by the Entitled Shareholders:-

(a) the RCPS-i shall carry the right to receive preferential dividends at the expected preferential dividend rate of 5% per annum on a semi-annual basis (subject to the availability of distributable profits);

(b) the RCPS-i will be listed and quoted on the Main Market of Bursa Securities, thus providing an avenue for RCPS-i holders who wish to monetise their investment in RCPS-i via disposal in the open market instead of waiting for the automatic conversion of the RCPS-i into SEB Shares at its maturity date after 5 years;

48


3
















6

(c) the RCPS-i are redeemable, whether wholly or in part, by SEB on a pro-rata basis at any time during the next 5 years from the issuance date at a redemption price which shall be the aggregate of:-

(i) the RCPS-i Issue Price;

(ii) any preferential dividends declared but unpaid as at the redemption date;

(iii) any Deferred Dividends as at the redemption date; and

(iv) a redemption adjustment that yields an effective return of 10% per annum, computed based on the internal rate of returnformula, from the issue date up to the redemption date of the RCPS-i, out of the distributable profits of SEB and after taking into account (i), (ii) and (iii) above and all Preferential Dividend declared and paid up to the Redemption Date;

(v) any remaining RCPS-i which are not redeemed by the end of its 5-year tenure will be automatically converted into new SEB Shares at the conversion ratio of 1 new SEB Share for 1 RCPS-i held; and

(vi) the issuance of free Warrants provides an added incentive for the Entitled Shareholders and/or their renouncee(s) to subscribe for the Rights Shares. Although the Exercise Price of RM0.49 represents a premium ranging between 16.7% to 58.1% to the TERP of SEB Shares up to and including the LPD, the Exercise Price is at a discount of 69.0% to the audited consolidated NA per SEB Shares as at 31 January 2018 of RM1.58. Furthermore, as at the LPD, the Warrants (which shall be issued free on the basis of 1 Warrant for every 10 Rights Shares subscribed) have a theoretical value of RM0.14 and this shall translate to a theoretical reduction in the Rights Issue Price per Rights Share by RM0.014.

(III) Effects of the Proposed Rights Issue, Proposed Exemption and Proposed Amendments

On a standalone basis, the Proposed Exemption and Proposed Amendments will not have any effect on the issued share capital, substantial shareholders’ shareholdings, NA per SEB Share, gearing and EPS of the SEB Group. Nonetheless, the Proposed Exemption and Proposed Amendments are necessary to facilitate the implementation of the Proposed Rights Issue.

The pro forma effects of the Proposed Rights Issue (see Section 11, Part A of the Circular as well as Section 5.3 of this IAL for further details) are as follows:-

(i) upon completion of the Proposed Rights Issue, the issued share capital of SEB will increase significantly from RM8.07 billion as at the LPD to RM11.91 billion.After full conversion of the RCPS-i and assuming full exercise of the Warrants into new SEB Shares, the issued share capital of SEB will increase further to RM12.51 billion;

[THE REST OF THIS PAGE IS INTENTIONALLY LEFT BLANK]

49


3
















7

(ii) the pro forma effects on the percentage shareholdings held by the PNB Group and the substantial shareholders in SEB pursuant to the Proposed Rights Issue are illustrated as follows:-

Assuming all the Entitled Shareholders subscribe in full their respective entitlements under the Proposed Rights Issue

As the Proposed Rights Issue will be fully subscribed in proportion to the Entitled Shareholders’ shareholdings, there will be no change to the percentage of shareholdings held by the PNB Group and the substantial shareholders in SEB.

Assuming that none of the other Entitled Shareholders subscribes for their respective entitlements under the Proposed Rights Issue other than the Undertaking Shareholders in the manner set out in Scenarios 1 and 2 below

Scenario 1

Assuming that:-

(i) STSB subscribes to RM300 million worth of Rights Shares with Warrants that STSB shall be entitled to under the Proposed Rights Issue of Shares with Warrants as at the Entitlement Date pursuant to the minimum of the STSB Undertaking;

(ii) PNB and the Funds subscribe for their respective entitlements under the Proposed Rights Issue pursuant to the PNB Undertaking and the Funds’ Undertaking;

(iii) as for the committed excess application pursuant to the PNB Undertaking and the Funds' Undertaking, only ASB subscribes for:-

(a) such number of Excess Rights Shares which will result in the PNB Group having an aggregate shareholding of 40% of the enlarged issued share capital of SEB immediately following the implementation of the Proposed Rights Issue; and

(b) all the excess RCPS-i;

(iv) all the RCPS-i are mandatorily converted into new SEB Shares at its maturity date after 5 years; and

(v) full exercise of the Warrants by the PNB Group,

the maximum potential percentage shareholdings of ASB and the PNB Group in SEB pursuant to the Proposed Rights Issue are summarised below:-

Percentage of shareholdings in SEBASB(%)

PNB Group(%)

As at the LPD 6.46 12.16

and after the following events (in sequential order):-(i) Proposed Rights Issue of Shares with Warrants 34.31 40.00(ii) Proposed Rights Issue of RCPS-i 34.31 40.00(iii) Full conversion of the RCPS-i 42.13 47.83(iv) Full exercise of the Warrants by ASB only 43.70 49.23(v) Full exercise of the Warrants by all other

members of the PNB Group43.56 49.39

Correspondingly, the percentage shareholdings of other shareholders in SEB will reduce.


7





Scenario 1

Assuming that:-










PNB Group(%)






7





Scenario 1

Assuming that:-










PNB Group(%)






7





Scenario 1

Assuming that:-










PNB Group(%)






7





Scenario 1

Assuming that:-










PNB Group(%)






7





Scenario 1

Assuming that:-










PNB Group(%)





50


3
















8

Scenario 2

All assumptions are same as Scenario 1 except for item (iii) above.

In Scenario 2, the respective members of the PNB Group subscribes for:-

(i) such number of Excess Rights Shares which will result in the PNB Group having an aggregate shareholding of 40% of the enlarged issued share capital of SEB immediately following the implementation of the Proposed Rights Issue, but the shareholding of each member of the PNB Group does not exceed 33% of the enlarged issued share capital of SEB; and

(ii) all the excess RCPS-i.

In this scenario, none of the shareholdings of individual member of the PNB Group will exceed 33% of the enlarged issued share capital of SEB while the collective shareholdings of PNB Group and the other substantial shareholders in SEB will be the same as shown in Scenario 1.

The above scenarios are for illustrative purpose only and may not reflect the actual percentage shareholdings of ASB, the PNB Group and the substantial shareholders in SEB upon completion of the Proposed Rights Issue with Warrants and the Proposed Rights Issue of RCPS-i, full conversion of the RCPS-i and/or exercise of the Warrants.

(iii) the NA of the Group will increase from RM9.45 billion as at 31 January 2018 (RM1.58 per SEB Share) to RM13.35 billion (RM0.84 per SEB Share) upon completion of the Proposed Rights Issue and thereafter, to RM13.83 billion after full conversion of the RCPS-i and assuming full exercise of the Warrants (further diluted to RM0.71 per SEB Share);

(iv) the gearing ratio of the Group will reduce from 1.74 times as at 31 January 2018 to 0.94 times upon completion of the Proposed Rights Issue and thereafter, to 0.87 times after full conversion of the RCPS-i and assuming full exercise of the Warrants.

The reduction in gearing of the Group above is due to part repayment of bank borrowings amounting to RM3.96 billion as well as the enlarged NA base of the Group. Subsequent additional repayment of the Group’s borrowings using proceeds from the exercise of the Warrants in the future will further reduce the Group’s gearing to 0.87 times.

(v) the Proposed Rights Issue is expected to contribute positively to the earnings of the Group as the proceeds raised will be utilised towards reducing the indebtedness of the Group and thereby reducing the Group’s finance costs accordingly (finance cost savings of RM174 million per annum).

As a result of the increase in weighted average number of SEB Shares in issue upon issuance of the Rights Shares and new SEB Shares arising from the conversion of RCPS-i and exercise of Warrants (if any), there will be dilution in the EPS of the Group upon issuance of such new SEB Shares.

Notwithstanding the dilution in NA per SEB Share and EPS of the Group as set out above, it is important to note that the entitlements for the Proposed Rights Issue are proportionate to the respective shareholdings of the Entitled Shareholders on the Entitlement Date. Accordingly, should all the Entitled Shareholders subscribe in full for their respective entitlements under the Proposed Rights Issue, there will not be any dilution to the percentage of shareholdings held by all the Entitled Shareholders and ultimately, their share of NA and earnings of the SEB Group.

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Based on our evaluation above, we are of the view that the overall effects of the Proposed Rights Issue, Proposed Exemption and Proposed Amendments are expected to be positive to the Group.

(IV) Industry outlook and future prospects of the SEB Group

According to the Short-term Energy Outlook by the U.S. Energy Information Administration (“EIA”), Brent crude oil prices is forecasted to average USD73 per barrel in 2018 and USD74 per barrel in 2019. In addition, the EIA forecasted Brent crude oil prices to remain relatively stable between USD72 per barrel and USD76 per barrel from September 2018 to the end of 2019. As oil prices continue to stabilise around the new USD70 to USD80 per barrel level, upstream players are expected to be more confident in expanding their investments in exploration, development and production activities. In turn, this is expected to lead to higher demand for O&G services and solutions.

With a larger capital / NA base coupled with the available debt headroom upon completion of the recapitalisation exercise, the SEB Group shall be well-positioned to ride on the continued recovery of the O&G industry.

In view of the above and after taking into consideration the past experience and track record of the SEB Group in the O&G services and solutions segment, we are of the view that the future prospects of the SEB Group appear to be positive.

(V) Implications arising from the voting outcome of the Proposed Exemption

If you vote in favour of the Proposed Exemption, the SC would be able to consider the application by the PNB Group for the Proposed Exemption.

Should you vote against the Proposed Exemption, SEB will not be able to undertake the recapitalisation exercise in view of the conditionality of the Proposed Rights Issue, Proposed Exemption and Proposed Amendments as set out in Section 12, Part A of the Circular. Accordingly, the part repayment of bank borrowings will also not materialise. Consequently, SEB will not be able to realise the potential benefits arising from the recapitalisation exercise as detailed in Section 10 of this IAL. Save for the Proposed Rights Issue, SEB does not have any alternative equity fund raising exercise being contemplated at this juncture.


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3. CONCLUSION AND RECOMMENDATION

We have assessed and evaluated the Proposed Exemption holistically, taking into consideration the various factors set out in Section 5 of this IAL. You should carefully consider both the merits and demerits of the Proposed Exemption based on all relevant and pertinent factors including those set out in this IAL as well as those highlighted by the Board in its letter to shareholders of SEB in relation to the Proposals and Proposed Grant, as set out in Part A of the Circular before voting on the ordinary resolution in respect of the Proposed Exemption at the forthcoming EGM.

The Proposed Exemption (if granted) will allow SEB to undertake the Proposed Rights Issue (if it is also approved by the shareholders of SEB). Accordingly, the potential advantages and disadvantages of the Proposed Rights Issue, Proposed Exemption and Proposed Amendments are as follows:-

Potential advantages

(i) The support from PNB via the PNB Undertaking and the Funds’ Undertaking demonstrates its interest and commitment in SEB. Further, such support provides certainty to SEB in raising the Intended Gross Proceeds.

(ii) The Proposed Rights Issue complements the Group’s de-gearing initiatives by providing the Group with an identified source of funds to pare down its bank borrowings instead of pursuing refinancing options as and when the borrowings are due. In addition, the net proceeds from the proposed sale of 50% stake in SEB’s wholly-owned subsidiary, Sapura Upstream Sdn Bhd, to Austria’s OMV Aktiengesellschaft are intended to be utilised for the repayment of borrowings and for working capital requirements.

Accordingly, the Proposed Rights Issue serves to strengthen the Group’s balance sheet by reducing its bank borrowings and increasing its equity base, thus improving its gearing position. With a stronger balance sheet, the Group will be able to demonstrate financial capability to undertake larger-scale projects globally and enable the Group to increase the quantity of higher value bids. The Group will then be in a better position to capitalise on emerging opportunities in the O&G industry following the current uptrend in oil prices. Accordingly, this is expected to contribute positively towards higher revenue and future earnings to the SEB Group.

The part repayment of bank borrowings will benefit the Group in terms of:-

(a) increasing its NA base from RM9.45 billion as at 31 January 2018 to RM13.35 billion upon completion of the exercise and thereafter, to RM13.83 billion upon full conversion of the RCPS-i and full exercise of the Warrants;

(b) lowering the gearing ratio of the Group from 1.74 times as at 31 January 2018 to 0.94 times upon completion of the exercise and thereafter, to 0.87 times upon full conversion of the RCPS-i and full exercise of the Warrants;

(c) reducing the indebtedness of the Group and thereby reducing the Group’s finance costs accordingly; and

(d) reducing exposure to interest rate fluctuations in view that the Group’s bank borrowings largely carry a floating interest rate.

(iii) The Proposed Rights Issue provides an opportunity for all the Entitled Shareholders to further increase their equity participation in SEB’s future growth and prospects amidst the gradual recovery of the O&G industry via subscription of:-

(a) Rights Shares (with free Warrants on the basis of 1 Warrant for every 10 Rights Shares subscribed) at the Rights Issue Price of RM0.30; and

(b) RCPS-i (which shall be automatically converted into SEB Shares at the end of its 5-year tenure) at the RCPS-i Issue Price of RM0.41,

without diluting their respective percentage of shareholdings in SEB, provided that such Entitled Shareholders fully subscribe for their respective entitlements for the Rights Shares and RCPS-i.

(iv) The features of the RCPS-i including the preferential dividends and yield on redemption as set out in Appendix II of the Circular will provide an added incentive to the Entitled Shareholders to subscribe for the RCPS-i. Moreover,while the RCPS-i shall be automatically converted into SEB Shares at the end of its 5-year tenure, Entitled Shareholders also have the option to monetise their RCPS-i via disposal in the open market.


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We have assessed and evaluated the Proposed Exemption holistically, taking into consideration the various factors set out in Section 5 of this IAL. You should carefully consider both the merits and demerits of the Proposed Exemption based on all relevant and pertinent factors including those set out in this IAL as well as those highlighted by the Board in its letter to shareholders of SEB in relation to the Proposals and Proposed Grant, as set out in Part A of the Circular before voting on the ordinary resolution in respect of the Proposed Exemption at the forthcoming EGM.




(ii) The Proposed Rights Issue complements the Group’s de-gearing initiatives by providing the Group with an identified source of funds to pare down its bank borrowings instead of pursuing refinancing options as and when the borrowings are due. In addition, the net proceeds from the proposed sale of 50% stake in SEB’s wholly-owned subsidiary, Sapura Upstream Sdn Bhd, to Austria’s OMV Aktiengesellschaft are intended to be utilised for the repayment of borrowings and for working capital requirements.












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(v) Through the exercise of the Warrants (if they are in-the-money), the Entitled Shareholders will be able to further increase their equity participation in SEB while also providing additional funds to the Group for working capital and/or repayment of borrowings. Alternatively, Entitled Shareholders have the option to monetise their Warrants via disposal in the open market.

Potential disadvantages

(i) The NA per SEB Share will be diluted from RM1.58 (as at 31 January 2018) to RM0.84 (upon completion of the Proposed Rights Issue) and thereafter, diluted further to RM0.71 (after full conversion of the RCPS-i and assuming the full exercise of the Warrants) as the new SEB Shares will be issued at prices lower than the NA per SEB Share whereby against the audited consolidated NA per SEB Share as at 31 January 2018 of RM1.58:-

(a) the Rights Issue Price for the Rights Shares of RM0.30 represents a discount of 81.0%;

(b) the Implied Conversion Price for the Conversion Shares of RM0.41 represents a discount of 74.1%; and

(c) the Exercise Price for the Exercised Shares of RM0.49 represents a discount of 69.0%.

The EPS of the Group will be diluted as a result of the increase in weighted average number of SEB Shares in issue upon issuance of the Rights Shares and new SEB Shares arising from the conversion of RCPS-i and exercise of Warrants (if any).

(ii) Subject to the Exemption Shareholding Limit as set out in Section 5.5.1 of this IAL, the Proposed Exemption will allow the increase in:-

(a) the shareholding of ASB in SEB from 6.46% up to the maximum potential shareholding of 43.70% of the enlarged total number of SEB Shares; and

(b) the collective shareholdings of the PNB Group in SEB from 12.16% up to the maximum potential collective shareholdings of 49.39% of the enlarged total number of SEB Shares and on the other hand, the shareholdings held by the other shareholders in SEB will be diluted from 87.84% to the potential shareholdings of 50.61%,

without being required to undertake the Mandatory Offer.

Accordingly, ASB and the PNB Group may obtain control (i.e. shareholding of more than 33%) over SEB at the Rights Issue Price, Implied Conversion Price and/or Exercise Price (which are at a discount over the NA per SEB Share). Further, with a shareholding of close to 50%, the PNB Group will be able to significantly influence the outcome of shareholders’ resolutions.

(iii) The Warrants shall be issued free on the basis of 1 Warrant for every 10 Rights Shares subscribed. Accordingly, the renunciation of the Rights Shares by any Entitled Shareholders will entail the renunciation of the attached Warrants. Accordingly, they will forgo their option to either:-

(a) exercise the Warrants to increase their equity participation in SEB; or

(b) monetise the Warrants via disposal in the open market. As at the LPD, the Warrants have a theoretical value derived based on the Trinomial option pricing model of RM0.14, which shall translate to a theoretical reduction in the Rights Issue Price per Rights Share by RM0.014.

(iv) Pursuant to the Proposed Rights Issue, the weighted average cost of capital of SEB will increase from 5.14% to 5.32% arising from the increase in equity financing which has a higher required rate of return as compared to debt financing.

Premised on the above where the potential advantages outweigh the potential disadvantages, as well as our evaluation of the Proposed Exemption on a holistic basis, we are of the opinion that, on the basis of the information available to us, the Proposed Exemption is fair and reasonable.

Accordingly, we recommend that you vote in favour of the ordinary resolution in respect of the Proposed Exemption to be tabled at the forthcoming EGM.

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Registered Office:Ground, 1st, 2nd, 3rd Floor

Wisma Umno Lorong Bagan Luar Dua

12000 Butterworth Seberang Perai

7 November 2018

To: The non-interested shareholders of Sapura Energy Berhad

Dear Sir / Madam,

SAPURA ENERGY BERHAD (“SEB” OR THE “COMPANY”)

INDEPENDENT ADVICE LETTER IN RELATION TO THE PROPOSED EXEMPTION

This IAL is prepared for inclusion in the Circular to the shareholders of SEB. All definitions used in this IAL shall have the same meaning as the words and expressions defined in the “Definitions” section of the Circular, except where the context otherwise requires or where otherwise defined in this IAL. All references to “we”, “us” or “our” in this IAL are references to Mercury Securities, being the Independent Adviser for the Proposed Exemption.

1. INTRODUCTION




The Proposed Exemption is being sought by the PNB Group pursuant to:-




which may result in:-

(i) an increase in the individual shareholding of ASB and/or collective shareholding of the PNB Group to above 33% of the enlarged issued share capital of SEB pursuant to the subscription of the Rights Shares, exercise of Warrants into new SEB Shares during the Exercise Period and/or conversion of the RCPS-i on the RCPS-i Maturity Date (as illustrated in Scenario 1 in Section 5.3.2 of this IAL); and/or

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Registered office: Ground, 1st, 2nd, 3rd Floor



17 October 2016

To: The Holders

Dear Sir / Madam,

UNCONDITIONAL MANDATORY TAKE-OVER OFFER BY THE OFFEROR TO ACQUIRE THE OFFER SHARES FOR A CASH OFFER PRICE OF RM0.61 PER OFFER SHARE

1. INTRODUCTION

Please refer to Section 1 in Part A of this IAC for the chronological events in relation to the Offer.

The purpose of this IAL is to provide our independent evaluation of the terms and conditions of the Offer together with our recommendation thereon, subject to the scope of our role and limitations specified herein.

WE ADVISE YOU TO READ AND UNDERSTAND THIS IAL CAREFULLY TOGETHER WITH PART A: LETTER FROM THE BOARD AND THE OFFER DOCUMENT, A COPY OF WHICH YOU SHOULD HAVE RECEIVED BY NOW, BEFORE TAKING ANY ACTION. THIS IAL DOES NOT CONSTITUTE THE OFFER OR ANY PART THEREOF.

IF YOU HAVE ANY DOUBT AS TO THE COURSE OF ACTION TO BE TAKEN IN RELATION TO THE OFFER, YOU SHOULD CONSULT YOUR STOCKBROKER, SOLICITOR, ACCOUNTANT, BANK MANAGER OR OTHER PROFESSIONAL ADVISERS IMMEDIATELY.

2. SALIENT TERMS AND CONDITIONS OF THE OFFER

The salient terms and conditions of the Offer are as follows:-

Consideration for the Offer : The cash consideration for the Offer is RM0.61 per Offer Share. The Offer Price is subject to any such reduction for net dividend and/or distribution declared, made or paid on or after the date of the Notice but prior to the Closing Date, of which the Holder is entitled to retain.

You may accept the Offer in respect of all or part of your Offer Shares. The Offeror will not pay fractions of a sen, if any, to the Accepting Holders. Entitlements to the cash payment will be rounded down to the nearest whole sen.

Conditions of the Offer : The Offer is unconditional upon any minimum level of acceptances of the Offer Shares as the Offeror holdsmore than 50% of the voting shares of Alcom upon the completion of the Share Acquisition.

6




17 October 2016

To: The Holders

Dear Sir / Madam,


1. INTRODUCTION










6




17 October 2016

To: The Holders

Dear Sir / Madam,


1. INTRODUCTION










6




17 October 2016

To: The Holders

Dear Sir / Madam,


1. INTRODUCTION










6




17 October 2016

To: The Holders

Dear Sir / Madam,


1. INTRODUCTION










6




17 October 2016

To: The Holders

Dear Sir / Madam,


1. INTRODUCTION










6




17 October 2016

To: The Holders

Dear Sir / Madam,


1. INTRODUCTION










6




17 October 2016

To: The Holders

Dear Sir / Madam,


1. INTRODUCTION










6




17 October 2016

To: The Holders

Dear Sir / Madam,


1. INTRODUCTION










6




17 October 2016

To: The Holders

Dear Sir / Madam,


1. INTRODUCTION










6




17 October 2016

To: The Holders

Dear Sir / Madam,


1. INTRODUCTION










6




17 October 2016

To: The Holders

Dear Sir / Madam,


1. INTRODUCTION










6

Aluminium.indd 6 10/14/2016 8:49:07 PM

12




7 November 2018


Dear Sir / Madam,




1. INTRODUCTION










12




7 November 2018


Dear Sir / Madam,




1. INTRODUCTION










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7 November 2018


Dear Sir / Madam,




1. INTRODUCTION










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7 November 2018


Dear Sir / Madam,




1. INTRODUCTION










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7 November 2018


Dear Sir / Madam,




1. INTRODUCTION










12




7 November 2018


Dear Sir / Madam,




1. INTRODUCTION










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7 November 2018


Dear Sir / Madam,




1. INTRODUCTION










12




7 November 2018


Dear Sir / Madam,




1. INTRODUCTION










12




7 November 2018


Dear Sir / Madam,




1. INTRODUCTION










12




7 November 2018


Dear Sir / Madam,




1. INTRODUCTION










12




7 November 2018


Dear Sir / Madam,




1. INTRODUCTION










12




7 November 2018


Dear Sir / Madam,




1. INTRODUCTION










12




7 November 2018


Dear Sir / Madam,




1. INTRODUCTION










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(ii) where ASB individually and/or the PNB Group collectively holds more than 33% butless than 50% of the enlarged issued share capital of SEB pursuant to the subscription of the Rights Shares, an increase in the individual shareholding of ASB and/or collective shareholding of the PNB Group by more than 2% of the enlarged issued share capital of SEB in any period of 6 months pursuant to the exercise of Warrants into new SEB Shares during the Exercise Period and/or conversion of the RCPS-i on the RCPS-i Maturity Date (as illustrated in Scenario 1 in Section 5.3.2 of this IAL).

On 25 September 2018, Mercury Securities was appointed by SEB pursuant to the Rules to act as the Independent Adviser to the non-interested Directors and non-interested shareholders of SEB on the Proposed Exemption. Mercury Securities subsequently declared its independence from any conflict of interest or potential conflict of interest to the SC in relation to its role as the Independent Adviser for the Proposed Exemption.

The pro forma effects on the percentage shareholdings held by the PNB Group in SEB pursuant to the Proposed Rights Issue are set out in Section 5.3.2 of this IAL.

In the event that none of the other Entitled Shareholders subscribe for their respective entitlements under the Proposed Rights Issue apart from the subscription by the Undertaking Shareholders in the following manner:-








the maximum potential percentage shareholdings of ASB and the PNB Group in SEB pursuant to the Proposed Rights Issue are as follows:-


PNB Group(%)


and after the following events (in sequential order):-(i) Proposed Rights Issue of Shares with Warrants 34.31 40.00(ii) Proposed Rights Issue of RCPS-i 34.31 40.00(iii) Full conversion of the RCPS-i 42.13 47.83(iv) Full exercise of the Warrants by ASB only 43.70 49.23(v) Full exercise of the Warrants by all other members of the PNB

Group43.56 49.39

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In another scenario whereby the respective members of the PNB Group subscribes for:-


(ii) all the excess RCPS-i,

none of the shareholdings of individual member of the PNB Group will exceed 33% of the enlarged issued share capital of SEB while the collective shareholdings of PNB Group will be the same as shown in the table above.

The above scenarios are for illustrative purpose only and may not reflect the actual percentage shareholdings of ASB and the PNB Group upon completion of the Proposed Rights Issue with Warrants and the Proposed Rights Issue of RCPS-i, full conversion of the RCPS-i and/or exercise of the Warrants.


The Proposed Rights Issue of Shares with Warrants, the Proposed Rights Issue of RCPS-i and the Proposed Exemption are inter-conditional. Hence, in the event that the non-interested shareholders of SEB or the SC does not approve the Proposed Exemption, the Proposed Rights Issue will not be implemented.


Nonetheless, the non-interested shareholders of SEB should rely on their own evaluation of the merits of the Proposed Exemption before making a decision on the course of action to be taken at the forthcoming EGM.

This IAL is prepared solely for the use of the non-interested shareholders of SEB to consider the Proposed Exemption and should not be used or relied upon by any other party for any other purposes whatsoever.

YOU ARE ADVISED TO READ AND UNDERSTAND BOTH THIS IAL AND THE LETTER FROM THE BOARD TO THE SHAREHOLDERS OF SEB IN RELATION TO THE PROPOSALS AND PROPOSED GRANT AS SET OUT IN PART A OF THE CIRCULAR TOGETHER WITH THE ACCOMPANYING APPENDICES, AND TO CAREFULLY CONSIDER THE RECOMMENDATIONS CONTAINED IN BOTH THE LETTERS BEFORE VOTING ON THE ORDINARY RESOLUTION IN RESPECT OF THE PROPOSED EXEMPTION TO BE TABLED AT THE FORTHCOMING EGM.

IF YOU ARE IN DOUBT AS TO THE COURSE OF ACTION TO BE TAKEN, YOU SHOULD CONSULT YOUR STOCKBROKER, BANK MANAGER, SOLICITOR, ACCOUNTANT OR OTHER PROFESSIONAL ADVISERS IMMEDIATELY.

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2. SCOPE AND LIMITATIONS OF OUR EVALUATION OF THE PROPOSED EXEMPTION

Mercury Securities was not involved in any formulation of or any deliberations and negotiations on the terms and conditions pertaining to the Proposals. The terms of reference of our appointment as the Independent Adviser for the Proposed Exemption are in accordance with the requirements in Paragraph 4.08 of the Rules.

Our terms of reference as the Independent Adviser are limited to expressing an independent opinion on the Proposed Exemption as to whether the Proposed Exemption is fair and reasonable insofar as the non-interested shareholders of SEB are concerned as well as providing our recommendation based on information and document made available to us as set out below:-

(i) information contained in Part A of the Circular and the accompanying appendices;

(ii) other relevant information, document, confirmation and representation furnished to us by the Board, management and/or representatives of SEB; and

(iii) other publicly available information which we deem to be relevant, including but not limited to annual reports and audited consolidated financial statements of SEB.

We have relied on the SEB Group as well as their Directors, management and/or representatives to take due care in ensuring that all information, document, confirmation and representation provided to us to facilitate our evaluation and which had been used, referred to and/or relied upon in this IAL have been fully disclosed to us, are accurate, valid and complete in all material aspects.

After making all reasonable enquiries, we are satisfied that sufficient information has been disclosed to us in enabling us to formulate our opinion and recommendation and the information is reasonable, accurate, complete and free from material omission.

In rendering our advice, we have taken note of the pertinent matters, which we believe are necessary and of importance to an assessment of the implications of the Proposed Exemption and therefore are of general concern to the non-interested shareholders of SEB to consider and form their views thereon. Notwithstanding the foregoing, we have not given consideration to the specific investment objectives, risk profiles, financial situations and particular needs of any individual non-interested shareholder or any specific group of non-interested shareholders. We recommend that any individual non-interested shareholder or group of non-interested shareholders who is / are in doubt as to the action to be taken or require advice in relation to the Proposed Rights Issue, Proposed Exemption and Proposed Amendments in the context of their investment objectives, risk profiles, financial situations and particular needs to consult their respective stockbrokers, bank managers, solicitors, accountants or other professional advisers immediately.

Our views expressed in this IAL are, amongst others, based on economic, market and other conditions prevailing, and the information and/or document made available to us as at the LPD or such other period as specified herein. Such conditions may change significantly over a short period of time. In addition, it should be noted that our evaluation and opinion expressed in this IAL do not take into account information, events or conditions arising after the LPD or such other period as specified herein, as the case may be.

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We shall immediately notify the SC in writing and the non-interested shareholders by way of an announcement to Bursa Securities and a press notice if after despatching this IAL, as guided by Paragraph 11.07(1) of the Rules, we become aware that this IAL:-

(i) contains a material statement which is false or misleading;

(ii) contains a statement from which there is a material omission; or

(iii) does not contain a statement relating to a material development.

If circumstances require, we shall send a supplementary IAL to the non-interested shareholders in accordance with Paragraph 11.07(2) of the Rules.

3. DETAILS OF THE PROPOSED RIGHTS ISSUE, PROPOSED EXEMPTION AND PROPOSED AMENDMENTS

The details of the Proposed Rights Issue, Proposed Exemption and Proposed Amendments are set out in the following sections in Part A of the Circular and should be read in entirety by the non-interested shareholders of SEB:-

Section in Part A of the Circular

Proposed Rights Issue of Shares with Warrants 2 Proposed Rights Issue of RCPS-i 3 Proposed Exemption 4 Proposed Amendments 6

4. INTERESTS OF THE DIRECTORS, MAJOR SHAREHOLDERS AND/OR PERSONS CONNECTED WITH THEM

The interests of the Directors, major shareholders and/or persons connected with them (together with their course of actions in relation to the Proposals) are set out in Section 13, Part A of the Circular.



In our evaluation of the Proposed Exemption, we have considered the following factors:-

Consideration factors Section in the IAL(i) Rationale for the Proposed Rights Issue, Proposed Exemption and

Proposed Amendments5.1

(ii) Rights Issue Price, Implied Conversion Price and Exercise Price 5.2(iii) Effects of the Proposed Rights Issue, Proposed Exemption and Proposed

Amendments5.3

(iv) Industry outlook and future prospects of the SEB Group 5.4(v) Implications arising from the voting outcome of the Proposed Exemption 5.5

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5.1 Rationale for the Proposed Rights Issue, Proposed Exemption and Proposed Amendments

We have considered the rationale for the Proposed Rights Issue, Proposed Exemption and Proposed Amendments set out in Section 8, Part A of the Circular and our commentaries are summarised below:-

5.1.1 Proposed Rights Issue

We view the rationale for the recapitalisation exercise to be reasonable based on the following analysis:-

(a) as part of its business strategies and future plans, the Group’s asset base has grown significantly since the merger between SapuraCrest Petroleum Berhad and Kencana Petroleum Berhad in 2012. As a result, the Group has undertaken a substantial amount of borrowings in order to fund its capital expenditure and working capital requirements, thus contributing to a high borrowing level;

(b) the low oil price environment that occurred since mid-2014 which impacted the entire O&G industry had resulted in fewer projects tendered and lower revenue for the Group which has affected the Group’s ability to pare down its existing large borrowings;

(c) amid the current gradual recovery in oil prices, it is essential for the Group to strengthen its balance sheet to enable the Group to demonstrate financial capability to undertake larger-scale projects globally and enable the Group to increase the quantity of higher value bids. The Group will then be in a better position to take advantage of emerging opportunities;

(d) utilisation of the Intended Gross Proceeds; and

(e) the Proposed Rights Issue is the most appropriate means to raise funds.

Further details of the abovesaid points are elaborated below.


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(A) As part of its business strategies and future plans, the Group’s asset base has grown significantly since the merger between SapuraCrest Petroleum Berhad and Kencana Petroleum Berhad in 2012. As a result, the Group has undertaken a substantial amount of borrowings in order to fund its capital expenditure and working capital requirements, thus contributing to a high borrowing level

SEB was formed pursuant to the merger between SapuraCrest Petroleum Berhad and Kencana Petroleum Berhad in 2012 (“Merger”), creating an integrated services provider covering the oil and gas (“O&G”) value chain with full-fledged engineering, procurement, construction, installation and commissioning (EPCIC) capabilities andhaving presence in Malaysia and various regions including Asia, Australia, Middle East, Europe, Americas and Africa. The Group offers services such as engineering and construction, drilling services as well as exploration and production for the upstream sector of the O&G industry as illustrated below:-

Business segments Description

Engineering and Construction (“E&C”)

Front-end engineering design (Feed), detailed design engineering (DDE), procurement, construction (fabrication), offshore transportation and installation, hook-up, commissioning and maintenance of fixed and floating oil and gas facilities, brownfield rejuvenation, diving, survey and subsea inspection, repair and maintenance (IRM) services, flexible and rigid pipelay, installation of subsea umbilicals, riser and flowlines, decommissioning of offshore structure and manufacturing and operation of remotely operated vehicles (ROV)

Drilling Services Provision of tender-assisted drilling services for the purposes of development drilling, production drilling, well completion, workovers as well as plug and abandonment for operators

Exploration and Production (“E&P”)

Exploration, development and production of crude oil and natural gas

The Group’s business segments are capital intensive in nature, whereby it requires high upfront capital expenditure.

Post the Merger in 2012, SEB emerged as one of the world’s largest integrated O&G service and solution provider with a market capitalisation of RM25.3 billion. Through the Merger, SEB managed to leverage on both SapuraCrest Petroleum Berhad’s andKencana Petroleum Berhad’s expertise and capabilities to bid and secure larger and more complex projects. As a result, the Group’s revenue increased by 170% from RM2.56 billion in the FYE 31 January 2012 to RM6.91 billion in the FYE 31 January 2013. This was also achieved during the peak of the O&G industry when oil prices were trading above USD100 per barrel.

In line with the business strategies and future plans of SEB as set out in its prospectus dated 16 May 2012, SEB had since its listing on the Main Market of Bursa Securities on 17 May 2012, invested significantly on its asset base. The Group’s total assets increased by RM14.8 billion or 97% from RM15.2 billion as at 31 January 2013 to RM30.0 billion as at 31 January 2018. Among the assets acquired by the Group since the Merger include:-

(a) acquisition of the tender rig business through the acquisition of Seadrill Tender Rig Limited (“Seadrill”) for USD2.6 billion, which was completed in 2013 and resulted in an increase in the number of SEB’s operating tender rigs from 3 to 21 as at FYE 31 January 2014; and

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19

(b) acquisition of the E&P business through the acquisition of Newfield Malaysia Holdings Inc. (“Newfield”) for USD896 million which was completed in 2014.

With the O&G industry at its peak, SEB had also vigorously expanded its business to other services in the O&G value chain as well as to other countries. In 2013, SEB undertook a private placement exercise whereby the proceeds were utilised to part finance the Group’s acquisition of Seadrill, a company involved in the tender rig business. The combination of the tender rig business between SEB and Seadrill allowed SEB’s Drilling Services business to strengthen its business profile as a result of enhancement of scale as well as increased exposure to higher margin offshore drilling.

Apart from the acquisition of Seadrill which was financed via a combination of debt and equity, the Group’s funding needs for capital expenditure and working capital have been met mainly via internally generated funds and bank borrowings. In 2014, SEB completed the acquisition of Newfield, the Malaysian operations of Newfield Exploration Company, a leading regional independent E&P company. Newfield was later renamed as Sapura Exploration and Production (Malaysia) Inc. which provides full exploration, development and production capabilities as well as participating interests in several production-sharing contracts and an alliance arrangement. Following the acquisition, SEB emerged as the first Malaysian independent O&G producer. The acquisition was funded via external bank borrowings.

In light of the Group’s continuous efforts to grow its asset base (including the expansion of the Group’s fleet of vessels and rigs) in order to take advantage of the O&G industry’s booming period, the Group’s borrowings have grown significantly by 188% from RM5.9 billion as at 31 January 2013 to RM17.0 billion as at 31 January 2015. While there has been a net repayment of approximately USD852 million (equivalent to approximately RM3.3 billion(1)) of the Group borrowings since 1 January 2015 up to 31 July 2018, this was offset by the strengthening of USD against RM for its USD-denominated borrowings thereby resulting in its borrowings to stand at RM16.9 billion as at 31 July 2018.



(B) The low oil price environment that occurred since mid-2014 which impacted the entire O&G industry had resulted in fewer projects tendered and lower revenue for the Group which has affected the Group’s ability to pare down its existing large borrowings

In 2014, the benchmark Brent crude oil price plunged from a peak of approximately USD115 per barrel in June 2014 to a low of approximately USD57 per barrel in December 2014 (based on last transacted price).

During this period, SEB tendered fewer projects as oil majors and national oil companies were delaying or cutting back on exploration, development and production activities. As a result of subdued upstream activity, fewer contracts were available for SEB and other O&G service providers thereby leading to the Group recording a loss (its first loss after tax since the Merger in 2012) in FYE 31 January 2016 of RM791.4 million as compared to a profit after tax of RM1.4 billion in the preceding financial year. This was mainly due to lower contract revenue as well as provisions for impairment recorded for its O&G assets.

62

20

In v

iew

of t

he a

bove

, sin

ce th

em

erge

r, th

e G

roup

’s g

earin

g ha

s in

crea

sed

from

0.8

8 tim

es a

s at

31

Janu

ary

2013

to 1

.74

times

as

at 3

1 Ja

nuar

y 20

18 a

s illu

stra

ted

belo

w:-

Aud

ited

as a

t 31

Janu

ary

2013

(RM

’mill

ion)

2014

(RM

’mill

ion)

2015

(RM

’mill

ion)

2016

(RM

’mill

ion)

2017

(RM

’mill

ion)

2018

(RM

’mill

ion)

(I)Lo

ng-te

rm b

orro

win

gs-

Hire

pur

chas

e an

d fin

ance

leas

e lia

bilit

ies

3.9

23.0

19.1

13

.6

6.6

0.3

-Te

rm lo

ans

(Sec

ured

)3,

002.

410

,603

.310

.5

--

--

Term

loan

s (U

nsec

ured

)-

-9,

029.

5 9,

561.

5 8,

473.

9 6,

820.

7 -

Isla

mic

faci

lity

--

6,79

5.6

5,66

2.6

5,60

0.3

3,40

3.5

-Is

tina’

Bon

ds a

nd M

urab

ahah

Com

mer

cial

Pap

er /

Mur

abah

ah

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ium

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m N

otes

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gram

me

669.

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rt-te

rm b

orro

win

gs-

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pur

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ance

leas

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Tota

l int

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t-bea

ring

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I)5,

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ring

ratio

(tim

es) (

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74

63

21

The

incr

ease

in th

e ge

arin

g le

vel o

f the

Gro

up w

as m

ainl

y du

e to

:- (i)

re

lianc

e on

add

ition

al b

orro

win

gs to

mee

t the

Gro

up’s

cap

ital e

xpen

ditu

re (w

hich

exp

ande

d si

gnifi

cant

ly d

urin

g th

e 20

12-2

014

perio

d w

hen

the

O&

G

indu

stry

was

at i

ts p

eak)

and

wor

king

cap

ital r

equi

rem

ents

;

(ii)

cont

inue

d re

finan

cing

of t

he G

roup

’s e

xist

ing

borro

win

gs (a

mid

the

wea

ker o

utlo

ok o

f the

O&

G in

dust

ry fo

llow

ing

tum

blin

g oi

l pric

es s

ince

mid

-201

4,

the

Gro

up la

unch

ed a

30-

year

Mul

ti-C

urre

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Suk

uk P

rogr

amm

e of

up

to R

M7.

0 bi

llion

and

obt

aine

d a

6-ye

ar U

SD

2.1

billi

on M

urab

ahah

Mul

ti-C

urre

ncy

Term

Fac

ility

mai

nly

to re

finan

ce th

e G

roup

’s b

orro

win

gs);

and

(ii

i) lo

wer

tota

l equ

ity d

ue to

loss

es in

curre

d by

the

Gro

up a

mid

dec

linin

g co

ntra

ct re

venu

es a

nd p

rofit

mar

gins

as

wel

l as

prov

isio

ns fo

r im

pairm

ent d

ue to

w

eak

dem

and

for t

he G

roup

’s a

sset

s an

d se

rvic

es.

As

for t

he in

tere

st c

over

ratio

(as

com

pute

d in

the

tabl

e be

low

), th

e G

roup

reco

rded

neg

ativ

e in

tere

st c

over

ratio

for t

he F

YE 3

1 Ja

nuar

y 20

18, m

ainl

y at

tribu

tabl

e to

:- (i)

lo

sses

incu

rred

by th

e G

roup

; and

(ii)

high

fina

nce

cost

s.

FYE

31 J

anua

ry

Audi

ted

2013

(R

M’m

illio

n)

2014

(R

M’m

illio

n)

2015

(R

M’m

illio

n)

2016

(R

M’m

illio

n)

2017

(R

M’m

illio

n)

2018

(R

M’m

illio

n)

(A

) (L

oss)

/ Pr

ofit

befo

re in

tere

st e

xpen

se a

nd ta

x 1

,057

.2

1,6

51.6

2

,282

.5

47.

5

1,1

85.1

(1

,464

.9)

In

tere

st e

xpen

ses

- Ba

nk b

orro

win

gs

227

.4

458

.6

677

.6

761

.1

779

.8

833

.6

- Ac

cret

ion

of a

sset

retir

emen

t obl

igat

ions

-

-

2

8.8

2

7.6

3

2.8

3

0.0

227

.4

458

.6

706

.4

788

.7

812

.6

863

.6

Le

ss: I

nter

est e

xpen

ses

capi

talis

ed

- Pr

oper

ty, p

lant

and

equ

ipm

ent

-

(14.

7)

(39.

8)

(28.

6)

(12.

7)

(5.0

) (B

) N

et in

tere

st e

xpen

ses

227

.4

443

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666

.6

760

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799

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858

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In

tere

st c

over

ratio

(tim

es) (

A)/(B

) 4.

65

3.72

3.

42

0.06

1.

48

(1.7

1)

The

wea

ker f

inan

cial

per

form

ance

of t

he G

roup

in re

cent

yea

rs h

as a

ffect

ed th

e G

roup

’s a

bilit

y to

par

e do

wn

its e

xist

ing

larg

e bo

rrow

ings

goi

ng fo

rwar

d.

64

22

(C) Amid the current gradual recovery in oil prices, it is essential for the Group to strengthen its balance sheet to enable the Group to demonstrate financial capability to undertake larger-scale projects globally and enable the Group to increase the quantity of higher value bids. The Group will then be in a better position to take advantage of emerging opportunities

Since 2016, there has been a gradual recovery in crude oil prices with the benchmark Brent crude oil price recovering from a low of USD27 per barrel in January 2016 to the current region of USD81 per barrel in October 2018 (based on last transacted price).This is mainly due to amongst others, decreasing oil inventories, robust global demand and growing geopolitical tensions. However, most of the O&G service providers in Malaysia are still tied down by high borrowings and finance costs, which limit their abilities to bid for contracts.

In order to take advantage of the emerging opportunities in light of the current oil price level, SEB has already begun undertaking several initiatives such as undertaking various measures to cut costs (including optimising supply chains as well as cold-stacking of drilling rigs and support vessels), reprioritising capital expenditure plans, revisiting investment decisions and optimising capital structure. With the gradual recovery of the O&G industry, the Group is planning to implement plans to enable its 3 business segments to operate independently so as to strengthen them, including astrategic partnership for its E&P business and possibly its Drilling Services business.

In terms of the strategic partnership for its E&P business, on 12 September 2018, SEB entered into a Heads of Agreement with Austria’s OMV Aktiengesellschaft for the sale of 50% stake in SEB’s wholly-owned subsidiary, Sapura Upstream Sdn Bhd (“Proposed Strategic Partnership”). Subsequent to that, SEB entered into a principal sales agreement, which is binding subject to signing of the definitive agreements and relevant approvals. As at the LPD, negotiations on the definitive agreements for the Proposed Strategic Partnership is still on-going. The strategic partnership is expected to complement the Group’s continued strategy to grow its portfolio and expand its acreage position. At the same time, this strategic partnership provides certainty on the Group’s monetisation plan, which helps to address SEB’s cash requirements in the near term. The net proceeds from the Proposed Strategic Partnership are intended to be utilised for the repayment of borrowings and for working capital requirements.


(D) Utilisation of the Intended Gross Proceeds

As set out in Section 7, Part A of the Circular, the Company expects to raise the Intended Gross Proceeds of RM3.98 billion from its recapitalisation exercise, which is intended to be used in the following manner:-

Description of use of proceeds

Estimated timeframe from date of listing of the Rights Shares and/or issuance of the RCPS-i

Amount

RM’million %

Part repayment of the bank borrowings of the SEB Group

Within 4 months 3,958.0 99.5

Defray estimated expenses relating to the Proposals

Within 1 months 20.8 0.5

Total gross proceeds 3,978.8 100.0

65

23

(i)

Part

repa

ymen

t of b

ank

borr

owin

gs

In li

ne w

ith S

EB’

s re

capi

talis

atio

n ex

erci

se, t

he g

ross

pro

ceed

s to

be

rais

ed (

99.5

%)

will

be u

sed

to r

epay

the

Gro

up’s

ban

k bo

rrow

ings

. As

at 3

1 Ju

ly

2018

, the

Gro

up’s

tota

l ban

k bo

rrow

ings

are

app

roxi

mat

ely

RM

16.9

bill

ion,

the

deta

ils o

f whi

ch a

re a

s fo

llow

s:-

Type

of b

orro

win

gsSe

curit

y pl

edge

dFu

lly re

paya

ble

by

Wei

ghte

d av

erag

e ef

fect

ive

inte

rest

rate

s pe

r ann

um(%

)

Am

ount

repa

yabl

eA

mou

nt

outs

tand

ing

as a

t 31

July

201

8(R

M’m

illio

n)

With

in 1

year

(RM

’mill

ion)

1-2

yea

rs(R

M’m

illio

n)2

-5 y

ears

(RM

’mill

ion)

Mor

e th

an 5

ye

ars

(RM

’mill

ion)

Hire

pur

chas

e an

d fin

ance

le

ase

liabi

litie

s (R

M /

US

D)

Ass

ets

purc

hase

d-

-5

--

-5

Uns

ecur

ed te

rm lo

an(U

SD

)-

Ran

ging

from

Fe

brua

ry 2

021

to

Mar

ch 2

024

4.53

–4.

694,

001

143

1,31

01,

666

7,12

0

Isla

mic

faci

lity

(RM

/ U

SD

)-

Dec

embe

r 202

14.

42 –

5.80

-56

12,

912

-3,

473

Suk

uk p

rogr

amm

e(R

M /

US

D)

-R

angi

ng fr

om

Janu

ary

2021

to

Mar

ch 2

024

4.58

–6.

70-

-1,

717

2,80

84,

525

Rev

olvi

ng c

redi

ts

(Uns

ecur

ed)

(RM

/ U

SD

)

--

3.34

–4.

591,

750

--

-1,

750

Tota

l ban

k bo

rrow

ings

16,8

73

66

24

The benefits to the Group arising from the part repayment of bank borrowings are as follows:-

(1) Strengthened financial position

The recapitalisation exercise is expected to strengthen the Group’s financial position. As set out in Section 11.3, Part A of the Circular, upon completion of the Proposed Rights Issue:-

(a) the pro forma NA of the Group will increase from RM9.45 billion as at 31 January 2018 to RM13.35 billion; and

(b) the gearing ratio of the Group will reduce from 1.74 times as at 31 January 2018 to 0.94 times.

After full conversion of the RCPS-i and assuming full exercise of the Warrants in the future, the pro forma NA and gearing ratio of the Group will improve further to RM13.83 billion and 0.87 times respectively.

A larger NA base will enhance competitiveness of the Group to ride on the potential recovery of activities in the O&G industry. With a stronger balance sheet, the Group will be able to demonstrate financial capability to undertake larger-scale projects globally and enable the Group to increase the quantity of higher value bids (see our commentaries on the industry outlook and future prospects of the SEB Group in Section 5.4 of this IAL).

(2) Finance cost savings

The part repayment of bank borrowings will result in a reduction in finance costs. For illustration purpose, based on an interest rate of 4.4% per annum, the repayment of RM3.96 billion bank borrowings will result in finance cost savings (before taxation) of RM174 million per annum. Accordingly, the interest cover ratio of SEB will also improve.

(3) Reduced exposure to interest rate fluctuations

The Group’s bank borrowings largely carry a floating interest rate i.e. an interest rate which will vary or fluctuate over time based on an underlying benchmark interest rate which may translate to an increase in interest expenses to be incurred by the Group.

Currently, the Group actively reviews its debt portfolio, taking into account its investment holding period and nature of its assets. This strategy allows it to capitalise on cheaper funding in a lower interest rate environment and achieve a certain level of protection against rate hikes.

The part repayment of bank borrowings will reduce the Group’s exposure to fluctuations in interest rate.

(ii) Estimated expenses relating to the Proposals

The estimated expenses relating to the Proposals comprise the following:-

Estimated expensesAmount

(RM’million)Professional fees 3.0Underwriting commission 15.8Fees payable to relevant authorities 0.5Printing and despatch and other incidental expenses 1.5Total 20.8

67

25

(E) The Proposed Rights Issue is the most appropriate means to raise funds


(i) an opportunity is provided for all the Entitled Shareholders to further increase their equity participation in SEB’s future growth and prospects amidst the gradual recovery of the O&G industry via subscription of the Rights Shares (with cash outlay at the Rights Issue Price of RM0.30) at a discount to the TERP (based on the prevailing market price of the SEB Shares up to the LPD)and subscription of the RCPS-i (with cash outlay at the RCPS-i Issue Price ofRM0.41) which shall be automatically converted into SEB Shares at the end of its 5-year tenure, without diluting their respective percentage of shareholdings in SEB, provided that such Entitled Shareholders fully subscribe for their respective entitlements for the Rights Shares and RCPS-i.






(vi) 99.5% of the total gross proceeds to be raised from the recapitalisation exercise will be used for the repayment of bank borrowings, which will benefit the Group in terms of stronger financial position, finance cost savings and reduced exposure to interest rate fluctuations (see above for further details).


68

26

Pursuant to the Proposed Rights Issue, the weighted average cost of capital (“WACC”) of SEB will increase from 5.14% to 5.32% (see below), arising from the increase in equity financing which has a higher required rate of return (approximately 8.95% after the repayment of RM3.96 billion bank borrowings) as compared to debt financing (4.80%). Notwithstanding the increase in WACC, the implementation of the recapitalisation exercise will strengthen the Group’s capital structure and may improve the credit rating (and hence lower its average cost of borrowings, currently at 4.80%)and debt capacity of the Group.

Before Proposed Rights

IssueAfter Proposed

Rights Issue

WACC 5.14% 5.32%

where:-

WACC = E x Ke + D x Kd (1 – t)D + E D + E

and:-

E: market value of the firm’s equity before* / after# the recapitalisation exercise.

* Before - based on the 5-day VWAMP of SEB Shares up to and including the LPD of RM0.3282 and the existing issued share capital of SEB comprising 5,992,155,087 SEB Shares

# After - based on the TERP of RM0.3235 computed based on the 5-day VWAMP of SEB Shares up to and including the LPD of RM0.3282 and the enlarged issued share capital of SEB comprising 18,375,942,267 SEB Shares after the recapitalisation exercise (assuming full conversion of RCPS-i into new SEB Shares)

D: market value of the firm’s debt, which is based on the Group’s interest-bearing borrowings as at 31 July 2018 of RM16.87 billion (to reduce by RM3.96 billion to RM12.91 billion after the recapitalisation exercise).

Ke: cost of equity (17.90% before the recapitalisation exercise; 8.95% after the recapitalisation exercise), representing the rate of return required by an investor on the cash flow streams generated by the Group given, amongst others, the risks associated with the cash flows and is derived using Capital Asset Pricing Model below:-

Ke = Rf + β (Rm – Rf)

where:-

Rf: risk-free rate of return, representing the expected rate of return from a risk-free investment and is derived based on the yield of 10-year Malaysian Government Securities as at the LPD of 4.08%.

β: beta, representing the sensitivity of an asset’s returns to the changes in market returns. It measures the correlation of systematic risk between the said asset and the market. A beta of more than 1 signifies that the asset is riskier than the market and vice versa, as extracted from Bloomberg, the adjusted 3-year weekly beta of the Company up to and including the LPD is 2.210. We have adopted the beta of the Company as SEB has been listed on Bursa Securities since 17 May 2012 and hence, its beta is obtainable and represents a reliable measure for the riskiness of the SEB Shares. Further, there is no company listed on Bursa Securities which is comparable to the SEB Group in view that SEB is a large integrated services provider operating across the O&G value chain.

For the purpose of computing the cost of equity of SEB after the recapitalisation exercise, we have un-levered the adjusted beta and re-levered it based on the capital structure of SEB after the part repayment of bank borrowings.

69

27

Rm: expected market rate of return, representing the expected rate of return for investing in a portfolio consisting of a weighted sum of assets representing the entire equity market, the historical rate of return for FTSE Bursa Malaysia Top 100 Index is a good indicator of the equity market return in Malaysia. Given the volatility of the stock market and market cycles, a 10-year historical rate of return of the said index is an appropriate estimate of the expected market rate of return as it normalises the year-on-year fluctuations of the stock market and mitigates market bias. Based on the information sourced from Bloomberg, we have derived an average expected market rate of return in Malaysia of 10.33% per annum for the past 10 years.

Kd: pre-tax cost of debt, representing the rate of return required by the lenders and is based on an interest rate of 4.80% per annum, after taking into consideration the Group’s current cost of borrowings.

t: corporate tax rate, which is based on the latest statutory tax rate of 24%.

5.1.2 Shareholder’s undertaking and underwriting arrangement

Pursuant to the Undertaking Letters, the Undertaking Shareholders have irrevocably provided the STSB Undertaking, PNB Undertaking and the Funds’Undertaking. For avoidance of doubt, the PNB Group will still be obliged to fulfill the PNB Undertaking and the Funds’ Undertaking in the event that the PNB Group's shareholding in SEB after subscription of Excess Rights Shares is less than 40%.

Further, as the Proposed Rights Issue of Shares with Warrants will be undertaken on full subscription basis, the Company will enter into underwriting arrangements for the portion of the Rights Shares for which no undertaking has been provided. The underwriting arrangements are only expected to be in place prior to the implementation of the Proposed Rights Issue of Shares with Warrants.

The abovementioned undertakings and underwriting agreement are subject to the following:-

(i) the approval of the SC for the Proposed Exemption;

(ii) the approval of SEB’s shareholders for the Proposals (save for the Proposed ESOS); and

(iii) the approval of Bursa Securities for the admission of the Warrants andRCPS-i to the Official List of Bursa Securities and the listing and quotation of the Rights Shares, Warrants, Exercised Shares, RCPS-i and Conversion Shares on the Main Market of Bursa Securities, which was obtained on 5 November 2018 subject to, amongst others, the conditions set out in Section 12, Part A of the Circular.

As for the Proposed Rights Issue of RCPS-i, in view that the PNB Undertaking and the Funds’ Undertaking will enable the Proposed Rights Issue of RCPS-ito be undertaken on a full subscription basis, the Company will not procure any underwriting arrangement for the excess RCPS-i not taken up or not validly taken up by the Entitled Shareholders and/or their renouncees.

5.1.3 Proposed Exemption

As set out in Section 1 of this IAL, the Proposed Exemption is being sought by the PNB Group pursuant to the following:-



27
















27
















27
















27
















70

28

(iii) the conversion of the RCPS-i held by the PNB Group on the RCPS-iMaturity Date,


(i) an increase in the individual shareholding of ASB and/or collective shareholding of the PNB Group to above 33% of the enlarged issued share capital of SEB pursuant to the subscription of the Rights Shares,exercise of Warrants into new SEB Shares during the Exercise Period and/or conversion of the RCPS-i on the RCPS-i Maturity Date (as illustrated in Scenario 1 in Section 5.3.2 of this IAL); and/or

(ii) where ASB individually and/or the PNB Group collectively holds more than 33% but less than 50% of the enlarged issued share capital of SEB pursuant to the subscription of the Rights Shares, an increase in the individual shareholding of ASB and/or collective shareholding of the PNB Group by more than 2% of the enlarged issued share capital of SEB in any period of 6 months pursuant to the exercise of Warrants into new SEB Shares during the Exercise Period and/or conversion of the RCPS-i on the RCPS-i Maturity Date (as illustrated in Scenario 1 in Section 5.3.2 of this IAL).

The shareholding limit to be established for the Proposed Exemption will be based on the actual number and percentage of voting rights that ASB individually and/or the PNB Group collectively will hold upon completion of the Proposed Rights Issue, and assuming the PNB Group exercises in full its right to exercise the Warrants and the RCPS-i are fully converted, based on the actual number of RCPS-i and Warrants held by the PNB Group at the time of completion of the Proposed Rights Issue (“Exemption Shareholding Limit”).

Should the PNB Group exceed the Exemption Shareholding Limit, the PNB Group would be obliged to observe the requirement of the Rules.

As it is not the intention of the PNB Group to undertake the Mandatory Offer, the Proposed Exemption will relieve them from the obligation to undertake such Mandatory Offer pursuant to Paragraphs 4.08(1)(b) and 4.08(1)(c) of the Rules.

In view of the above and the conditionality of the Proposed Rights Issue, Proposed Exemption and Proposed Amendments as set out in Section 12, Part A of the Circular, without the Proposed Exemption, the recapitalisation exercise will not proceed and accordingly, the potential benefits arising from the recapitalisation exercise as detailed in Section 10 of this IAL will not materialise.

It is important to note that the entitlements for the Proposed Rights Issue are proportionate to the respective shareholdings of Entitled Shareholders on the Entitlement Date. Should all the Entitled Shareholders and/or their renouncee(s) subscribe in full their entitlements under the Proposed Rights Issue, there will not be any Excess Rights Shares or RCPS-i to be subscribed by the PNB Group.

Furthermore, pursuant to the PNB Undertaking and the Funds’ Undertaking, the PNB Group has an obligation to subscribe in full its entitlements under the Proposed Rights Issue and to apply for all the remaining Excess Rights Shares and RCPS-i via excess application on terms which are identical to those offered to all other Entitled Shareholders. In this respect, the PNB Group does not gain any advantage or additional entitlement over the non-interested shareholders of SEB.

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On the other hand, as set out in Sections 2.1 and 3.1, Part A of the Circular, the Rights Shares and RCPS-i which are not taken up or not validly taken up will be made available for excess application by the other Entitled Shareholders and/or their renouncees. It is the intention of the Board to allocate the excess Rights Shares with Warrants and RCPS-i, if any, in a fair and equitable manner on a basis to be determined by the Board.

Further, the Proposed Rights Issue of RCPS-i will enable the Company to raise the requisite funds without the Company being over-capitalised after taking into consideration the new SEB Shares to be issued pursuant to the Proposed Rights Issue of Shares with Warrants, given the Company’s right (without obligation) to redeem the RCPS-i (whether wholly or in part on a pro rata basis)which will allow the Company to manage its share base.

We have also considered the salient terms of the RCPS-i (as set out in Appendix II) and we noted that these terms are similar to the Rights Shares except for certain rights held by the RCPS-i holders. Please refer to our commentaries in Section 5.2 of this IAL.

5.1.4 Proposed Amendments

The Proposed Amendments entail amendments to the relevant clauses of the Constitution to facilitate the implementation of the Proposed Rights Issue in respect of the issuance of the RCPS-i and serving of notices by electronic form.

Based on the above, we are of the view that there are merits in the Proposed Rights Issue, Proposed Exemption and Proposed Amendments.

5.2 Rights Issue Price, Implied Conversion Price and Exercise Price

5.2.1 Evaluation of the Rights Issue Price and the Implied Conversion Price

The basis and justification for the Rights Issue Price and the Implied Conversion Price are set out in Sections 2.2.1 and 3.2.2, Part A of the Circular respectively. The Rights Issue Price and the Implied Conversion Price were determined after taking into consideration amongst others:-

(i) the prevailing market price of the SEB Shares up to the Announcement LPD; and

(ii) the TERP of SEB Shares of RM0.41 based on the 5-day VWAMP of SEB Shares up to and including the Announcement LTD of RM0.59.

The Rights Issue Price of RM0.30 represents a discount of approximately 26.8% to the abovementioned TERP of SEB Shares of RM0.41. The Implied Conversion Price for the RCPS-i of RM0.41 is equivalent to the TERP of SEB Shares of RM0.41.


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In evaluating the Rights Issue Price and the Implied Conversion Price, we have considered the following:-

(i) Historical closing market prices

The graph below sets out the historical closing market prices of SEB Shares for the past 12 months up to the LPD:-

(Source: Bloomberg)

Note:- (1) The principal activities of the SEB Group have remained unchanged

for the past 12 months up to the LPD.

Based on the graph above, we noted that the historical closing market prices of SEB Shares have generally been on a downward trend while the trading volume of SEB Shares has increased significantly since early December 2017.

Save for the announcements in relation to the Proposals and unaudited quarterly financial results as well as events as disclosed below, there is no significant event being announced for the past 12 months up to the LPD which may have impacted the market prices and trading volume of the SEB Shares during the said period:-

Date of announcement Announcement

15.11.2017 Announcement that SEB’s direct and indirect wholly-owned subsidiaries have been awarded contracts with a combined value of approximately RM1.47 billion.

25.1.2018 Announcement that SEB has engaged advisors to evaluate and advise on the potential listing of the E&P business

5.2.2018 Announcement that SEB’s direct and indirect wholly-owned subsidiaries have been awarded contracts with a combined value of approximately RM905 million.

21.3.2018 Announcement that Sapura Fabrication Sdn Bhd (a wholly-owned subsidiary of SEB) has been awarded a contract from Mubadala Petroleum (MDC Oil & Gas (SK 320) Ltd) to undertake engineering, procurement, construction, installation and commissioning (EPCIC) works for the Pegaga Development Project.

Rights Issue PriceImplied Conversion Price

Volume RM

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In evaluating the Rights Issue Price and the Implied Conversion Price, we have considered the following:-

(i) Historical closing market prices

The graph below sets out the historical closing market prices of SEB Shares for the past 12 months up to the LPD:-

(Source: Bloomberg)

Note:- (1) The principal activities of the SEB Group have remained unchanged

for the past 12 months up to the LPD.

Based on the graph above, we noted that the historical closing market prices of SEB Shares have generally been on a downward trend while the trading volume of SEB Shares has increased significantly since early December 2017.

Save for the announcements in relation to the Proposals and unaudited quarterly financial results as well as events as disclosed below, there is no significant event being announced for the past 12 months up to the LPD which may have impacted the market prices and trading volume of the SEB Shares during the said period:-


15.11.2017 Announcement that SEB’s direct and indirect wholly-owned subsidiaries have been awarded contracts with a combined value of approximately RM1.47 billion.

25.1.2018 Announcement that SEB has engaged advisors to evaluate and advise on the potential listing of the E&P business

5.2.2018 Announcement that SEB’s direct and indirect wholly-owned subsidiaries have been awarded contracts with a combined value of approximately RM905 million.

21.3.2018 Announcement that Sapura Fabrication Sdn Bhd (a wholly-owned subsidiary of SEB) has been awarded a contract from Mubadala Petroleum (MDC Oil & Gas (SK 320) Ltd) to undertake engineering, procurement, construction, installation and commissioning (EPCIC) works for the Pegaga Development Project.

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22.3.2018 Announcement that Sapura Exploration and Production (Sarawak) Inc. (a wholly-owned subsidiary of SEB) has commenced production at the B15 gas field which is located within the SK310 Production Sharing Contract area, offshore Sarawak, East Malaysia.

26.3.2018 Announcement that Sapura Exploration and Production (NZ) Sdn Bhd (formerly known as Sapura Exploration and Production (JV) Sdn Bhd) (a wholly-owned subsidiary of SEB) has made inroads into New Zealand with a series of farm-in agreements to five offshore exploration permits within the Taranaki Basin, a prolific oil and gas region.

29.3.2018 Announcement that Sapura Exploration and Production Sdn Bhd (a wholly-owned subsidiary of SEB) together with its joint venture partners, DEA Deutsche Erdoel Mexico and Premier Oil Plc, have been awarded Block 30 in Sureste Basin, a proven and prolific hydrocarbon province in the Gulf of Mexico.

11.4.2018 Announcement that Sapura Exploration and Production (Sarawak) Inc. (a wholly-owned subsidiary of SEB) and its partners, PETRONAS Carigali Sdn Bhd and Sarawak Shell Berhad, have taken final investment decision to develop the Gorek, Larak and Bakong fields as phase 1 in the SK408 Production Sharing Contract.

11.6.2018 Announcement that Sapura Exploration and Production (Sarawak) Inc. (a wholly-owned subsidiary of SEB) andits partners, Sarawak Shell Berhad and PETRONAS Carigali Sdn Bhd, have made its ninth gas discovery offshore Sarawak, following the completion of its 2017 drilling campaign within the SK408 Production Sharing Contract.

21.6.2018 Announcement that SEB’s wholly-owned subsidiaries have been awarded contracts with a combined value of approximately RM1.8 billion.

4.9.2018 Announcement that Sapura Upstream Sdn Bhd(formerly known as Sapura Exploration and Production Sdn Bhd) (a wholly-owned subsidiary of SEB) had made its first foray into Australia via the farm-in to 3 offshore exploration permits (located within the highly prolific North West Shelf oil and gas province off Western Australia), held by Finder Exploration Pty Ltd, a private oil and gas company based in West Perth, Australia.

12.9.2018 Announcement that SEB had entered into a Heads of Agreement for the proposed sale of 50% stake in its wholly-owned subsidiary, Sapura Upstream Sdn Bhd (formerly known as Sapura Exploration and Production Sdn Bhd) to OMV Aktiengesellschaft.

24.9.2018 Announcement that SEB’s wholly-owned subsidiaries have been awarded contracts/subcontract/contract extension with a combined value of approximately RM815 million.

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The highest and lowest closing market prices and the closing price at the end of each month of the SEB Shares for the period commencing from February 2018 (being 6 months before the announcement of the Proposals on 24 August 2018) to the LPD are as follows:-

Month

Closing market price

HighestRM

LowestRM

At the end of month

RM

2018February 0.74 0.67 0.67March 0.65 0.41 0.55April 0.79 0.50 0.64May 0.85 0.55 0.55June 0.67 0.58 0.64July 0.62 0.59 0.61August 0.60 0.34 0.34September 0.46 0.34 0.41October 0.43 0.32 0.34

Closing market price from February 2018 until the LPD- Highest (on 14 May 2018) 0.85- Lowest (on 30 October 2018) 0.32

(Source: Bloomberg)

(ii) Discount over closing market prices and VWAMPs

The Rights Issue Price of RM0.30 represents a discount to the following closing market prices and VWAMPs of SEB Shares:-


/ VWAMP TERP(1) DiscountRM RM RM %

Up to the LPD:-Closing market price 0.34 0.32 (0.02) (6.3)5-day VWAMP 0.33 0.31 (0.01) (3.2)1-month VWAMP 0.37 0.33 (0.03) (9.1)3-month VWAMP 0.42 0.34 (0.04) (11.8)6-month VWAMP 0.55 0.39 (0.09) (23.1)1-year VWAMP 0.63 0.42 (0.12) (28.6)

Up to the Announcement LTD:-Closing market price 0.60 0.41 (0.11) (26.8)5-day VWAMP 0.59 0.41 (0.11) (26.8)

(Source: Bloomberg)


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The Implied Conversion Price of RM0.41 represents a premium / discount to the following closing market prices and VWAMPs of SEB Shares:-


/ VWAMP TERP(1)Premium / discount

RM RM RM %

Up to the LPD:-Closing market price 0.34 0.32 0.09 28.15-day VWAMP 0.33 0.31 0.10 32.31-month VWAMP 0.37 0.33 0.08 24.23-month VWAMP 0.42 0.34 0.07 20.66-month VWAMP 0.55 0.39 0.02 5.11-year VWAMP 0.63 0.42 (0.01) (2.4)

Up to the Announcement LTD:-Closing market price 0.60 0.41 - -5-day VWAMP 0.59 0.41 - -

(Source: Bloomberg)

Note:- (1) Computed after taking into account the Proposed Rights Issue of

Shares with Warrants as follows:-

where:-

Warrants are in-the-money

TERP = (A x X) + (B x Y) + (C x Z)A + B + C

A = Number of existing SEB Shares B = Number of Rights Shares C = Number of Warrants X = Respective closing market price / VWAMPs of SEB Shares in

the table above Y = Rights Issue Price Z = Exercise Price

Warrants are out-of-money or at-the-money

TERP = (A x X) + (B x Y)A + B

A = Number of existing SEB Shares B = Number of Rights Shares X = Respective closing market price / VWAMPs of SEB Shares in

the table above Y = Rights Issue Price

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(iii) Consolidated NA per SEB Share

The Rights Issue Price of RM0.30 represents a discount to the following consolidated NA per SEB Share:-

Consolidated NA per SEB Share

RM

Discount

RM %

(i) Unaudited consolidated NA per SEB Share as at 31 July 2018

1.58 (1.28) (81.0)

(ii) Audited consolidated NA per SEB Share as at 31 January 2018

1.58 (1.28) (81.0)

(Sources: Unaudited consolidated financial statements of SEB for the 6-month FPE 31 July 2018 as well as audited consolidated financial statements of SEB for the FYE 31 January 2018)

The Implied Conversion Price of RM0.41 represents a discount to the following consolidated NA per SEB Share:-


RM

Discount

RM %


1.58 (1.17) (74.1)


1.58 (1.17) (74.1)



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5.2.2 Evaluation of the Exercise Price

The Exercise Price of the Warrants was arrived at based on the TERP of SEB Shares of RM0.41 computed based on the 5-day VWAMP of SEB Shares up to and including the Announcement LTD of RM0.59.

In evaluating the Exercise Price, we have considered the following:-

(i) Theoretical value of the Warrants

In evaluating the Exercise Price of the Warrants, we have considered the theoretical value of the Warrants by adopting the Trinomial option pricing model(1) with the following parameters:-

(a) value of the underlying SEB Shares of RM0.31, being the TERP of SEB Shares based on the 5-day VWAMP of the SEB Shares up to and including the LPD of RM0.33;

(b) Exercise Price of the Warrants of RM0.49;

(c) tenure of the Warrants of 7 years;

(d) risk-free rate of 4.08% based on the yield of 10-year Malaysian Government Securities as at the LPD; and

(e) historical volatility of the SEB Shares since listing up to and including the LPD of 48.75% (as extracted from Bloomberg).

Note:- (1) The Trinomial option pricing model is a simulation-based model

utilising a probability tree which incorporates 3 possible values that an underlying asset can have, stretched over an extended period of time.

The theoretical value or fair value of the Warrants is the sum of the:-

(i) intrinsic value (being the difference between the value of the underlying SEB Shares and the Exercise Price of the Warrants); and

(ii) time value (which is the value attributed to the Warrants taking into consideration factors such as, amongst others, the tenure of the Warrants, the expected risk-free rate over the tenure of the Warrants and the volatility of the SEB Shares).

Based on the foregoing, the theoretical value of the Warrants is set out below:-

RMTheoretical value of the Warrants(a) Intrinsic value -(b) Time value 0.1351

0.1351

Please note that the abovementioned theoretical value may not correspond to the actual market prices of the Warrants upon listing on the Main Market of Bursa Securities. There can also be no assurance that an active market for the Warrants will develop, or if developed, that such market can be sustained.

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(ii) Premium / (Discount) over closing market prices and VWAMPs

The Exercise Price of RM0.49 represents a premium to the following TERPs of SEB Shares computed based on the following closing market prices and VWAMPs of SEB Shares:-

TERP(1) PremiumRM RM %

Up to the LPD:-Closing market price 0.32 0.17 53.15-day VWAMP 0.31 0.18 58.11-month VWAMP 0.33 0.16 48.53-month VWAMP 0.34 0.15 44.16-month VWAMP 0.39 0.10 25.61-year VWAMP 0.42 0.07 16.7

Up to the Announcement LTD:-Closing market price 0.41 0.08 19.55-day VWAMP 0.41 0.08 19.5

(Source: Bloomberg)

Note:- (1) As computed in Section 5.2.1 of this IAL.

(iii) Consolidated NA per SEB Share

The Exercise Price of RM0.49 represents a discount to the following consolidated NA per SEB Share:-


RM

Discount

RM %


1.58 (1.09) (69.0)


1.58 (1.09) (69.0)



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Our commentaries:-

Based on our evaluation above, we are of the view that the basis and justification for the Rights Issue Price, Implied Conversion Price and Exercise Price are justifiable after taking into consideration the following factors:-

(i) the subscription by the Undertaking Shareholders of the Excess Rights Shares and excess RCPS-i via excess application will be on terms which are identical to those offered to all other Entitled Shareholders. In this respect, the Undertaking Shareholders do not gain any advantage or additional entitlement over the non-interested shareholders of SEB;

(ii) the entitlements for the Proposed Rights Issue are proportionate to the respective shareholdings of Entitled Shareholders on the Entitlement Date. Should all the Entitled Shareholders and/or their renouncee(s) subscribe in full their entitlements under the Proposed Rights Issue,there will not be any Excess Rights Share or excess RCPS-i to be subscribed by the Undertaking Shareholders;

(iii) the Rights Issue Price of RM0.30 represents discounts ranging between 3.2% to 28.6% to the TERP of SEB Shares up to and including the LPD as well as a discount of 81.0% to the audited consolidated NA per SEB Share as at 31 January 2018 of RM1.58 and accordingly, should encourage the subscription of Rights Shares by the Entitled Shareholders;

(iv) although the Implied Conversion Price of RM0.41 is equivalent to the TERP of RM0.41 based on the 5-day VWAMP of the SEB Shares up to and including the Announcement LTD of RM0.59, it represents a discount of 74.1% to the audited consolidated NA per SEB Share as at 31 January 2018 of RM1.58. In addition, the following features of the RCPS-i should encourage the subscription of RCPS-i by the Entitled Shareholders:-

(a) the RCPS-i shall carry the right to receive preferential dividends at the expected preferential dividend rate of 5% per annum on a semi-annual basis (subject to the availability of distributable profits);

(b) the RCPS-i will be listed and quoted on the Main Market of Bursa Securities, thus providing an avenue for RCPS-i holders who wish to monetise their investment in RCPS-i via disposal in the open market instead of waiting for the automatic conversion of the RCPS-i into SEB Shares at its maturity date after 5 years;

(c) the RCPS-i are redeemable, whether wholly or in part, by SEB on a pro-rata basis at any time during the next 5 years from the issuance date at a redemption price which shall be the aggregate of:-

(i) the RCPS-i Issue Price;

(ii) any preferential dividends declared but unpaid as at the redemption date;

(iii) any Deferred Dividends as at the redemption date; and

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(iv) a redemption adjustment that yields an effective return of 10% per annum, computed based on the internal rate of return formula, from the issue date up to the redemption date of the RCPS-i, out of the distributable profits of SEB and after taking into account (i), (ii) and (iii) above and all Preferential Dividend declared and paid up to the Redemption Date;

(v) any remaining RCPS-i which are not redeemed by the end of its 5-year tenure will be automatically converted into new SEB Shares at the conversion ratio of 1 new SEB Share for 1 RCPS-i held; and

(vi) furthermore, the issuance of free Warrants provides an added incentive for the Entitled Shareholders and/or their renouncee(s) to subscribe for the Rights Shares. Although the Exercise Price of RM0.49 represents a premium ranging between 16.7% to 58.1% to the TERP of SEB Shares up to and including the LPD, the Exercise Price is at a discount of 69.0% to the audited consolidated NA per SEB Shares as at 31 January 2018 of RM1.58. Furthermore, as at the LPD, the Warrants (which shall be issued free on the basis of 1 Warrant for every 10 Rights Shares subscribed) have a theoretical value of RM0.14 and this shall translate to a theoretical reduction in the Rights Issue Price per Rights Share by RM0.014.


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5.3 Effects of the Proposed Rights Issue, Proposed Exemption and Proposed Amendments

We noted the effects of the Proposed Rights Issue, Proposed Exemption and Proposed Amendments from Section 11, Part A of the Circular.

On a standalone basis, the Proposed Exemption and Proposed Amendments will not have any effect on the share capital, substantial shareholders’ shareholdings, NA per SEB Share, gearing and EPS of the SEB Group. Nonetheless, the Proposed Exemption and Proposed Amendments are necessary to facilitate the implementation of the Proposed Rights Issue.

The pro forma effects of the Proposed Rights Issue are summarised as follows:-

5.3.1 Issued share capital

The increase in issued share capital of SEB upon completion of the Proposed Rights Issue is as follows:-

Issued share capitalSEB Shares

(RM’000)RCPS-i

(RM’000)Total

(RM’000)

As at the LPD 8,066,410 - 8,066,410

and after the following events(in sequential order):-(i) Proposed Rights Issue of Shares

with Warrants10,923,981 - 10,923,981

(ii) Proposed Rights Issue of RCPS-i 10,923,981 982,713 11,906,694(iii) Full conversion of the RCPS-i 11,906,694 - 11,906,694(iv) Full exercise of the Warrants 12,513,718 - 12,513,718

5.3.2 Substantial shareholders’ shareholdings

The pro forma effects of the Proposed Rights Issue on the substantial shareholders’ shareholdings are set out in Section 11.2, Part A of the Circular.

Set out below are the percentage of shareholdings of the PNB Group and the substantial shareholders in SEB as at the LPD:-

Name

As at the LPDNo. of SEB Shares

(‘000) %

PNB 19,641 0.33

PNB FundsASB 387,000 6.46Amanah Saham Malaysia 2 - Wawasan 83,000 1.39Amanah Saham Malaysia 93,154 1.55Amanah Saham Malaysia 3 65,456 1.09Amanah Saham Bumiputera 3 - Didik 37,554 0.63Amanah Saham Bumiputera 2 9,000 0.15Amanah Saham Nasional 7,741 0.13ASN Equity 2 3,674 0.06ASN Imbang (Mixed Asset Balanced) 1 7,390 0.12ASN Equity 3 9,533 0.16ASN Imbang (Mixed Asset Balanced) 2 4,762 0.08ASN Sara (Mixed Asset Conservative) 1 - -ASN Equity 5 - -ASN Sara (Mixed Asset Conservative) 2 - -Bumiputera Wealth Fund 500 0.01

Total - PNB Group 728,405 12.16

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Name

As at the LPDNo. of SEB Shares

(‘000) %

Other substantial shareholders (with more than 5% direct interest in SEB)STSB 953,004 15.90KWAP 411,558 6.87

The pro forma effects on the percentage of shareholdings held by the PNB Group and the substantial shareholders in SEB pursuant to the Proposed Rights Issue are illustrated as follows:-



Assuming none of the other Entitled Shareholders subscribes for their respective entitlements under the Proposed Rights Issue other than the Undertaking Shareholders in the manner set out in Scenarios 1 and 2 below

Scenario 1

Assuming that:-








the maximum potential percentage shareholdings of ASB and the PNB Group in SEB and the corresponding effect on the shareholdings of other substantial shareholders in SEB pursuant to the Proposed Rights Issue are as follows:-

Name

Pro forma I Pro forma IIAfter the Proposed Rights

Issue of Shares with Warrants

After Pro forma I and the Proposed Rights Issue of

RCPS-iNo. of SEB Shares

(‘000) %No. of SEB Shares

(‘000) %

PNB 52,376 0.33 52,376 0.33

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Name

Pro forma I Pro forma IIAfter the Proposed Rights

Issue of Shares with Warrants

After Pro forma I and the Proposed Rights Issue of

RCPS-iNo. of SEB Shares

(‘000) %No. of SEB Shares

(‘000) %

PNB FundsASB 5,482,053 34.31 5,482,053 34.31Amanah Saham Malaysia 2 - Wawasan 221,333 1.39 221,333 1.39Amanah Saham Malaysia 248,410 1.55 248,410 1.55Amanah Saham Malaysia 3 174,550 1.09 174,550 1.09Amanah Saham Bumiputera 3 - Didik 100,145 0.63 100,145 0.63Amanah Saham Bumiputera 2 24,000 0.15 24,000 0.15Amanah Saham Nasional 20,643 0.13 20,643 0.13ASN Equity 2 9,798 0.06 9,798 0.06ASN Imbang (Mixed Asset Balanced) 1 19,706 0.12 19,706 0.12ASN Equity 3 25,421 0.16 25,421 0.16ASN Imbang (Mixed Asset Balanced) 2 12,699 0.08 12,699 0.08ASN Sara (Mixed Asset Conservative) 1 - - - -ASN Equity 5 - - - -ASN Sara (Mixed Asset Conservative) 2 - - - -Bumiputera Wealth Fund 500 * 500 *

Total - PNB Group 6,391,632 40.00 6,391,632 40.00

Other substantial shareholders (with more than 5% direct interest in SEB)STSB 1,953,004 12.22 1,953,004 12.22KWAP 411,558 2.58 411,558 2.58

Name

Pro forma III Pro forma IVAfter Pro forma II and

assuming full conversion of the RCPS-i

After Pro forma III and assuming full exercise of the Warrants by ASB only

No. of SEB Shares(‘000) %


PNB 60,232 0.33 60,232 0.32

PNB FundsASB 7,742,553 42.13 8,252,058 43.70Amanah Saham Malaysia 2 - Wawasan 254,533 1.39 254,533 1.35Amanah Saham Malaysia 285,671 1.55 285,671 1.51Amanah Saham Malaysia 3 200,733 1.09 200,733 1.06Amanah Saham Bumiputera 3 - Didik 115,166 0.63 115,166 0.61Amanah Saham Bumiputera 2 27,600 0.15 27,600 0.15Amanah Saham Nasional 23,739 0.13 23,739 0.13ASN Equity 2 11,267 0.06 11,267 0.06ASN Imbang (Mixed Asset Balanced) 1 22,662 0.12 22,662 0.12ASN Equity 3 29,234 0.16 29,234 0.15ASN Imbang (Mixed Asset Balanced) 2 14,604 0.08 14,604 0.08ASN Sara (Mixed Asset Conservative) 1 - - - -ASN Equity 5 - - - -ASN Sara (Mixed Asset Conservative) 2 - - - -Bumiputera Wealth Fund 500 * 500 *

Total - PNB Group 8,788,494 47.83 9,297,999 49.23

Other substantial shareholders (with more than 5% direct interest in SEB)STSB 1,953,004 10.63 1,953,004 10.34KWAP 411,558 2.24 411,558 2.18

* Negligible

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Name

Pro forma VAfter Pro forma IV and

assuming full exercise of the Warrants by all other

members of the PNB Group


PNB 63,506 0.34

PNB FundsASB 8,252,058 43.56Amanah Saham Malaysia 2 - Wawasan 268,367 1.42Amanah Saham Malaysia 301,197 1.59Amanah Saham Malaysia 3 211,642 1.12Amanah Saham Bumiputera 3 - Didik 121,425 0.64Amanah Saham Bumiputera 2 29,100 0.15Amanah Saham Nasional 25,029 0.13ASN Equity 2 11,880 0.06ASN Imbang (Mixed Asset Balanced) 1 23,893 0.13ASN Equity 3 30,822 0.16ASN Imbang (Mixed Asset Balanced) 2 15,397 0.08ASN Sara (Mixed Asset Conservative) 1 - -ASN Equity 5 - -ASN Sara (Mixed Asset Conservative) 2 - -Bumiputera Wealth Fund 500 *

Total - PNB Group 9,354,817 49.39

Other substantial shareholders (with more than 5% direct interest in SEB)STSB 1,953,004 10.31KWAP 411,558 2.17

* Negligible

Scenario 2

All assumptions are same as Scenario 1 except for item (iii) above.

In Scenario 2, the respective members of the PNB Group subscribes for:-


(ii) all the excess RCPS-i.

In this scenario, none of the shareholdings of individual member of the PNB Group will exceed 33% of the enlarged issued share capital of SEB while the collective shareholdings of PNB Group and the other substantial shareholders in SEB will be the same as shown in Scenario 1.

The above scenarios are for illustrative purpose only and may not reflect the actual percentage shareholdings of the PNB Group and the substantial shareholders in SEB upon completion of the Proposed Rights Issue with Warrants and the Proposed Rights Issue of RCPS-i, full conversion of the RCPS-i and/or exercise of the Warrants.

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5.3.3 NA and gearing

We noted from Section 11.3, Part A of the Circular that the recapitalisation exercise is expected to increase the Group’s NA base and reduce its gearing as follows:-

NA and NA per SEB Share

NA(RM’000)

NA per SEB Share(RM)

As at 31 January 2018 9,449,966 1.58

and after the following events (in sequential order):-(i) Proposed Rights Issue of Shares with Warrants 12,378,802 0.77(ii) Proposed Rights Issue of RCPS-i 13,346,189 0.84(iii) Full conversion of the RCPS-i 13,346,189 0.73(iv) Full exercise of the Warrants 13,827,917 0.71

The dilution in NA per SEB Share above is due to the issuance of:-

(i) the Rights Shares at the Rights Issue Price;

(ii) new SEB Shares arising from the conversion of the RCPS-i at the Implied Conversion Price; and

(iii) new SEB Shares arising from the exercise of the Warrants at the Exercise Price,

which are at prices lower than the NA per SEB Share.

Gearing

Gearing ratio(times)

As at 31 January 2018 1.74

and after the following events (in sequential order):-(i) Proposed Rights Issue of Shares with Warrants 1.09(ii) Proposed Rights Issue of RCPS-i 0.94(iii) Full conversion of the RCPS-i 0.94(iv) Full exercise of the Warrants 0.87

The reduction in gearing of the Group above is due to part repayment of bank borrowings amounting to RM3.96 billion as well as the enlarged NA base of the Group. Subsequent additional repayment of the Group’s borrowings using proceeds from the exercise of the Warrants in the future will further reduce the Group’s gearing to 0.87 times.

5.3.4 Earnings and EPS

The Proposed Rights Issue is expected to contribute positively to the earnings of the Group as the proceeds raised will be utilised towards reducing the indebtedness of the Group and thereby reducing the Group’s finance costs accordingly.

For illustration purpose, based on an interest rate of 4.4% per annum, the repayment of RM3.96 billion bank borrowings will result in finance cost savings of RM174 million per annum.

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As a result of the increase in weighted average number of SEB Shares in issue upon issuance of the Rights Shares and new SEB Shares arising from the conversion of RCPS-i and exercise of Warrants (if any), there will be dilution in the EPS of the Group upon issuance of such new SEB Shares.

Notwithstanding the dilution in NA per SEB Share and EPS of the Group as set out above, it is important to note that the entitlements for the Proposed Rights Issue are proportionate to the respective shareholdings of the Entitled Shareholders on the Entitlement Date. Accordingly, should all the Entitled Shareholders subscribe in full for their respective entitlements under the Proposed Rights Issue, there will not be any dilution to the percentage of shareholdings held by all the Entitled Shareholders and ultimately, their share of NA and earnings of the SEB Group.

Based on our evaluation above, we are of the view that the overall effects of the Proposed Rights Issue, Proposed Exemption and Proposed Amendments are expected to be positive to the Group.

5.4 Industry outlook and future prospects of the SEB Group

We noted the industry overview and prospects as set out in Section 10, Part A of the Circular.

The graph below sets out the movement of benchmark Brent crude oil price from 2014 up to the LPD:-

(Source: Bloomberg)

In 2014, the benchmark Brent crude oil price plunged from a peak of approximately USD115 per barrel in June 2014 to a low of approximately USD57 per barrel in December 2014 (based on last transacted price). Though it had since recovered slightly in the first half of 2015, the oil price continued its downtrend to a low of USD27 per barrel in January 2016 before gradually recovering to hover around USD55 per barrel in 2017.

The SEB Group was not spared from the cascading impact of prolonged depressed oil prices as it reported declining revenues and profits in the last 3 financial years whereby the Group recorded loss after tax of RM791.4 million and RM2,504.8 million for the FYE 31 January 2016 and FYE 31 January 2018, respectively. These were mainly attributable to lower contract revenue and provisions for impairment arising from weak demand for the Group’s assets and services.

USD / barrel

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In order to acclimatise to the low oil price scenario as it became the new norm, the Group undertook various measures to cut costs (including optimising supply chains as well as cold-stacking of drilling rigs and support vessels), reprioritise capital expenditure plans, revisit investment decisions and optimise capital structure. These measures were undertaken to keep the Group’s operations lean and efficient in order to enable the Group to offer competitive pricing for its services to existing and potential clients.

Moving forward, the Group is optimistic about the improvement in the prospects of the O&G industry following the gradual recovery in oil prices from mid-2017 onwards.Currently, Brent crude oil prices are hovering around USD70 to USD80 per barrel. While the Group is expected to benefit from the current uptrend in oil prices as upstream activities are beginning to pick up again, the Group may also seek to expand its capital expenditure plans (e.g. exploration and development of gas fields, acquisition of tender rigs as well as expansion of its fleet of vessels and remotely operated vehicles) in the near future to take advantage of the gradual recovery in the O&G industry and enhance its future prospects.

(Source: Management of SEB, September 2018)

According to the Short-term Energy Outlook by the U.S. Energy Information Administration (“EIA”), Brent crude oil prices is forecasted to average USD73 per barrel in 2018 and USD74 per barrel in 2019. In addition, the EIA forecasted Brent crude oil prices to remain relatively stable between USD72 per barrel and USD76 per barrel from September 2018 to the end of 2019. As oil prices continue to stabilise around the new USD70 to USD80 per barrel level, upstream players are expected to be more confident in expanding their investments in exploration, development and production activities. In turn, this is expected to lead to higher demand for O&G services and solutions.

Since the start of 2018, the Group has accumulated significant contract wins. As at the LPD, the Group has an accumulative value of RM5.3 billion in contracts wins (including those awards of contracts / subcontracts / contract extensions with a combined value of approximately RM815 million announced on 24 September 2018), representing asignificant increase in value compared to the same corresponding period in the previous year of February to October 2017 of RM1.3 billion. In addition, the Group has grown its order book to RM16.9 billion as at July 2018 (including the new contract wins) from RM14.9 billion as at 31 January 2018. As at the LPD, the Company is also in active pursuit of bids worth USD7.4 billion (equivalent to RM31.0 billion) and further prospects of USD10.2 billion (equivalent to RM42.7 billion) in key geographical markets that it operates in.

Further, as part of the Group’s strategic plan to enable its 3 business segments to operate independently so as to strengthen its core businesses, the Group is undertaking strategic partnerships for its E&P and Drilling Services business.

With a larger capital / NA base coupled with the available debt headroom upon completion of the recapitalisation exercise, the SEB Group shall be well-positioned to ride on the continued recovery of the O&G industry.

In view of the above and after taking into consideration the past experience and track record of the SEB Group in the O&G services and solutions segment, we are of the view that the future prospects of the SEB Group appear to be positive.


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5.5 Implications arising from the voting outcome of the Proposed Exemption

You should note that the SC will only consider the application for the Proposed Exemption if the PNB Group has satisfied amongst others, the following conditions pursuant to Paragraph 4.08(2) of the Rules:-

(i) There has been no acquisition of shares or instruments convertible into and options in respect of shares (other than subscriptions for, rights to subscribe for instruments convertible into or options in respect of new shares which have been disclosed in this Circular) in the 6 months prior to the announcement of the Proposals but subsequent to negotiations, discussions or the reaching of understandings or agreements with the Directors in relation to the Proposed Rights Issue until completion of the subscription (i.e. from 26 April 2018 up to the completion of the subscription); and

(ii) Approval has been obtained from independent holders of voting shares or voting rights of SEB at a meeting of the holders of the relevant class of voting shares or voting rights to waive their rights to receive the Mandatory Offer from the PNB Group. The voting at the meeting shall be conducted by way of a poll.

Any exemption granted will be invalidated if the PNB Group has engaged or engages in a disqualifying transaction.

The implications of the non-interested shareholders’ votes on the Proposed Exemptionto be tabled at the forthcoming EGM are set out in the ensuing sections.

5.5.1 If you VOTE IN FAVOUR of the Proposed Exemption

(i) The SC would be able to consider the application by the PNB Group (which will be submitted by PNB on behalf of the PNB Group, through Maybank IB) for the Proposed Exemption. An approval from the SC for the Proposed Exemption would then exempt the PNB Group from the obligation to undertake the Mandatory Offer to acquire all the remaining SEB Shares, Warrants and RCPS-i not already owned by them upon completion of the Proposed Rights Issue.

If granted, the Proposed Exemption will be in effect for the entire tenure of 5 years for the RCPS-i and 7 years for the Warrants from their respective date of issuance and no subsequent shareholders’ approval will be required. Throughout the duration of the Proposed Exemption (if approved by the non-interested shareholders of SEB and granted by the SC), SEB will be required to disclose, in its annual accounts and any public document, including annual reports, prospectuses and circulars:-

(a) the details of the Proposed Exemption including the duration for the Proposed Exemption;

(b) the number and percentage of voting shares or voting rights and convertible securities in SEB held by the PNB Group as at the latest practicable date prior to the disclosure; and

(c) the maximum potential shareholdings of the PNB Group in SEB, if only the PNB Group (but not other holders) exercises the conversion or subscription rights or options in full.

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(ii) Your approval of the Proposed Exemption will imply that you have agreed to waive your rights and exempt the PNB Group from the obligation to undertake the Mandatory Offer (which shall be no lower than the highest price paid by the PNB Group for the SEB Shares in the past 6 months before the incurrence of such obligation to undertake the Mandatory Offer).

Note:- Voting in favour of the Proposed Exemption does not in any way impede your rights to participate in the Proposed Rights Issue. However, should you decide not to subscribe for your entitlements under the Proposed Rights Issue, your percentage of shareholdings in SEB will be diluted accordingly.

(iii) It is pertinent to note that subject to the Exemption Shareholding Limit (as defined below), the Proposed Exemption will allow:-

(a) the shareholding of ASB in SEB to increase from 6.46% up to the maximum potential shareholding of 43.70% of the enlarged total number of SEB Shares without being required to undertake the Mandatory Offer; and

(b) the collective shareholdings of the PNB Group in SEB to increase from 12.16% up to the maximum potential collective shareholdings of 49.39% of the enlarged total number of SEB Shares without being required to undertake the Mandatory Offer.

On the other hand, the shareholdings held by the other shareholders in SEB will be diluted from 87.84% to the potential shareholdings of 50.61%. For illustration purposes, based on Scenario 1, the changes in public shareholding spread of SEB are as follows:-

Public shareholding

spread(1)

(%)

As at the LPD 82.2


Note:- (1) Public shareholders are classified based on the definition of ‘public’

under Paragraph 1.01 of the Listing Requirements. Amongst others, public shareholders include those who fulfill all the following requirements:-

(i) such shareholder’s interest, directly or indirectly, is not more than 15% of the total number of shares of the listed issuer;

(ii) such shareholder is not a promoter of the listed issuer; and

(iii) such shareholder is either -

(a) a statutory institution who is managing funds belonging to contributors or investors who are members of the public; or

(b) an entity established as a collective investment scheme, such as closed-end funds, unit trusts or investment funds (but excluding investment holding companies).

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Public shareholding

spread(1)

(%)

As at the LPD 82.2









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Public shareholding

spread(1)

(%)

As at the LPD 82.2









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Public shareholding

spread(1)

(%)

As at the LPD 82.2









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Public shareholding

spread(1)

(%)

As at the LPD 82.2









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Public shareholding

spread(1)

(%)

As at the LPD 82.2









47







Public shareholding

spread(1)

(%)

As at the LPD 82.2









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Public shareholding

spread(1)

(%)

As at the LPD 82.2









47







Public shareholding

spread(1)

(%)

As at the LPD 82.2









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Public shareholding

spread(1)

(%)

As at the LPD 82.2









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Public shareholding

spread(1)

(%)

As at the LPD 82.2









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Public shareholding

spread(1)

(%)

As at the LPD 82.2









47







Public shareholding

spread(1)

(%)

As at the LPD 82.2









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In view that the PNB Group meets all of the above requirements as at the LPD, the PNB Group is classified as a public shareholder.

Accordingly, subsequent to the Proposed Rights Issue of Shares with Warrants, the PNB Group is classified as a non-public shareholder following the increase in its shareholding in SEB from 12.16% as at the LPD to 40% after the Proposed Rights Issue of Shares with Warrants.

Accordingly, ASB and the PNB Group may obtain control over SEB at the Rights Issue Price, Implied Conversion Price and/or Exercise Price (which are at a discount over the NA per SEB Share). With a shareholding of close to 50%, the PNB Group will be able to significantly influence the outcome of shareholders’ resolutions.



This means that unless otherwise exempted (up to the Exemption Shareholding Limit), in the event after the completion of the Proposed Rights Issue:-

(a) the individual shareholding of any member of the PNB Group in SEB is below 33%, an obligation to undertake a mandatory offer would be triggered if the said member increases its shareholding in SEB to above 33% (“33% Threshold”);

(b) the individual shareholding of any member of the PNB Groupin SEB is more than 33% but less than 50% pursuant to the Proposed Rights Issue (applicable for ASB only), an obligation to undertake a mandatory offer would be triggered if the shareholding of the said member increases by more than 2% in any 6-month period (“2% Creeping Threshold”);

(c) the collective shareholding of the PNB Group is below 33%, the PNB Group is subject to the 33% Threshold; and

(d) the collective shareholding of the PNB Group is more than 33% but less than 50%, the PNB Group is subject to the 2% Creeping Threshold.

If the PNB Group acquires further voting rights after the date of issue of the RCPS-i and/or the Warrants, the Proposed Exemption will only apply to the conversion of RCPS-i and/or exercise of Warrants such that the number of SEB Shares issued, when added to the further voting rights acquired, do not exceed the Exemption Shareholding Limit approved by the non-interested shareholders pursuant to the Proposed Exemption.

Further, the non-interested shareholders should note that by voting for the Proposed Exemption, they could be forgoing the opportunity to receive a take-over offer from another person who may be discouraged from making a take-over offer (“Potential Offer”) as:-

(i) the RCPS-i and/or Warrants issued will need to be included in any Potential Offer; and

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48














48














48














48














48














48














48














48














48














48














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(ii) any substantial conversion of RCPS-i and/or exercise ofWarrants not held by the potential offeror after the Potential Offer will significantly dilute the potential offeror’s shareholding.

(iv) In view of the conditionality of the Proposed Rights Issue, Proposed Exemption and Proposed Amendments as set out in Section 12, Part A of the Circular, without the Proposed Exemption, the recapitalisation exercise will not proceed. Therefore, voting in favour of the Proposed Exemption will enable SEB to benefit from the recapitalisation exercise (if the Proposed Rights Issue, Proposed Exemption and Proposed Amendments are approved by the shareholders of SEB).

5.5.2 If you VOTE AGAINST the Proposed Exemption

(i) The SC would not be able to consider the application by the PNB Group for the Proposed Exemption.

(ii) In view of the conditionality of the Proposed Rights Issue, Proposed Exemption and Proposed Amendments as set out in Section 12, Part A of the Circular, in the event that the Proposed Exemption is not approved, SEB will not be able to undertake the recapitalisation exercise. Accordingly, the recapitalisation exercise including the repayment of bank borrowings will also not materialise. Consequently, SEB will not be able to realise the potential benefits arising from the recapitalisation exercise as detailed in Section 10 of this IAL. Save for the Proposed Rights Issue, SEB does not have any alternative equity fund raising exercise being contemplated at this juncture.

6. DIRECTORS’ INTENTION TO VOTE

As at the LPD, save as disclosed below, the Directors of SEB do not have any interest (direct and indirect) in the SEB Shares. Their intention to vote in relation to the Proposed Exemption is as follows:-

Name

Direct Indirect Intention to vote in

relation to the Proposed Exemption

No. of SEB Shares %(1)

No. of SEB Shares %(1)

TSS 37,811,692 0.63 1,007,544,718(2) 16.81 Vote in favour

Tan Sri Datuk Amar (Dr) Hamid Bugo

256,405 * 275,000(3) * Vote in favour

DSS 506,385 0.01 1,007,544,718(2) 16.81 Vote in favour

Mohamed Rashdi Mohamed Ghazalli

97,864 * 48,932(4) * Vote in favour

Datuk Ramlan Abdul Malek 485,500 0.01 - - Vote in favour

* Negligible

Notes:- (1) Computed based on the total number of 5,992,155,087 SEB Shares as at the LPD. (2) Deemed interested by virtue of being a substantial shareholder of Sapura Holdings Sdn Bhd

(“SHSB”) pursuant to Section 8 of the Act. SHSB is a substantial shareholder of STSB, Sapura Resources Berhad, Sapura Capital Sdn Bhd, Indera Permai Sdn Bhd and Jurudata Sdn Bhd.

(3) Deemed interested by virtue of the shareholding held by him and his children in Sego Holdings Sdn Bhd, which in turn holds 50% in Santubong Properties Sdn Bhd, pursuant to Section 8 of the Act.

(4) Deemed interested by virtue of the shareholding held by his spouse pursuant to Section 59 of the Act.

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7. FUTURE PLANS FOR THE SEB GROUP AND ITS EMPLOYEES

Pursuant to Paragraph 8, Schedule 2: Part II of the Rules, the PNB Group has confirmed that as at the LPD, they do not intend to effect any major change to the following:-

(i) the continuation of the business of the SEB Group;

(ii) the business of the SEB Group, including any plans to liquidate the Group, sell any material assets or re-deploy the fixed assets or effect any other major change in the structure of the SEB Group; and

(iii) the continued employment of the employees of the SEB Group,

except where such changes are in the ordinary course of the Group’s business or are necessary to rationalise or improve the Group’s operations and/or financial performance. The PNB Group shall retain the flexibility at any time to consider any options which are in the best interests of the SEB Group that may present themselves including but not limited to any strategic acquisitions and/or disposals of assets or businesses.

The PNB Group intends to maintain the listing status of SEB on the Main Market of Bursa Securities.

The undertakings provided by PNB serve to provide continued financial support to the SEB Group to embrace various challenges within the O&G industry. PNB believes in the long term prospects of the O&G industry and that the completion of the Proposed Rights Issue with Warrants and Proposed Rights Issue of RCPS-i shall place the SEB Group in a good position to ride on the potential recovery of the industry.

8. RESPONSIBILITY STATEMENT

The Board has seen, reviewed and accepted this IAL. The Board, collectively and individually, accepts full responsibility for the accuracy of the information contained in this IAL (save for the assessment, evaluation and opinion of Mercury Securities) and confirms, after having made all reasonable enquiries, that to the best of their knowledge, opinions expressed in the document have been arrived at after due and careful consideration and there are no other facts not contained in this IAL, the omission of which would make any information in this IAL misleading.

The responsibility of the Board in respect of:-

(i) the information relating to the PNB Group (as provided by the PNB Group) is limited to ensuring that such information is accurately reproduced in this IAL; and

(ii) the independent advice and expression of opinion by Mercury Securities in relation to the Proposed Exemption is limited to ensuring that accurate information in relation to the SEB Group was provided to Mercury Securities for its evaluation of the Proposed Exemption and to ensure that all information in relation to the SEB Group that are relevant to Mercury Securities’ evaluation of the Proposed Exemption have been completely disclosed to Mercury Securities and that there is no material fact, the omission of which would make any information provided to Mercury Securities false or misleading.

9. FURTHER INFORMATION

The non-interested shareholders of SEB are advised to refer to Part A of the Circular as well as the attached appendices for further information.

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We have assessed and evaluated the Proposed Exemption holistically, taking into consideration the various factors set out in Section 5 of this IAL. You should carefully consider the merits and demerits of the Proposed Exemption based on all relevant and pertinent factors including those set out in this IAL as well as those highlighted by the Board in its letter to the shareholders of SEB in relation to the Proposals and Proposed Grant, as set out in Part A of the Circular before voting on the ordinary resolution in respect of the Proposed Exemption at the forthcoming EGM.




(ii) The Proposed Rights Issue complements the Group’s de-gearing initiatives by providing the Group with an identified source of funds to pare down its bank borrowings instead of pursuing refinancing options as and when the borrowings are due. In addition, the net proceeds from the proposed sale of 50% stake in SEB’s wholly-owned subsidiary, Sapura Upstream Sdn Bhd, to Austria’s OMV Aktiengesellschaft are intended to be utilised for the repayment of borowings and for working capital requirements.












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(v) Through the exercise of the Warrants in the future (if they are in-the-money), the Entitled Shareholders will be able to further increase their equity participation in SEB while also providing additional funds to the Group for working capital and/or repayment of borrowings. Alternatively, Entitled Shareholders have the option to monetise their Warrants via disposal in the open market.

Potential disadvantages

(i) The NA per SEB Share will be diluted from RM1.58 (as at 31 January 2018) to RM0.84 (upon completion of the Proposed Rights Issue) and thereafter, diluted further to RM0.71 (after full conversion of the RCPS-i and assuming the full exercise of the Warrants) as the new SEB Shares will be issued at prices lower than the NA per SEB Share whereby against the audited consolidated NA per SEB Share as at 31 January 2018 of RM1.58:-

(a) the Rights Issue Price for the Rights Shares of RM0.30 represents a discount of 81.0%;

(b) the Implied Conversion Price for the Conversion Shares of RM0.41 represents a discount of 74.1%; and

(c) the Exercise Price for the Exercised Shares of RM0.49 represents a discount of 69.0%.

The EPS of the Group will be diluted as a result of the increase in weighted average number of SEB Shares in issue upon issuance of the Rights Shares and new SEB Shares arising from the conversion of RCPS-i and exercise of Warrants (if any).

(ii) Subject to the Exemption Shareholding Limit as set out in Section 5.5.1 of this IAL, the Proposed Exemption will allow the increase in:-

(a) the shareholding of ASB in SEB from 6.46% up to the maximum potential shareholding of 43.70% of the enlarged total number of SEB Shares; and

(b) the collective shareholdings of the PNB Group in SEB from 12.16% up to the maximum potential collective shareholdings of 49.39% of the enlarged total number of SEB Shares and on the other hand, the shareholdings held by the other shareholders in SEB will be diluted from 87.84% to the potential shareholdings of 50.61%,

without being required to undertake the Mandatory Offer.

Accordingly, ASB and the PNB Group may obtain control (i.e. shareholding of more than 33%) over SEB at the Rights Issue Price, Implied Conversion Price and/or Exercise Price (which are at a discount over the NA per SEB Share). Further, with a shareholding of close to 50%, the PNB Group will be able to significantly influence the outcome of shareholders’ resolutions.

(iii) The Warrants shall be issued free on the basis of 1 Warrant for every 10 Rights Shares subscribed. Accordingly, the renunciation of the Rights Shares by any Entitled Shareholders will entail the renunciation of the attached Warrants. Accordingly, they will forgo their option to either:-

(a) exercise the Warrants to increase their equity participation in SEB; or

(b) monetise the Warrants via disposal in the open market. As at the LPD, the Warrants have a theoretical value derived based on the Trinomial option pricing model of RM0.14, which shall translate to a theoretical reduction in the Rights Issue Price per Rights Share by RM0.014.

(iv) Pursuant to the Proposed Rights Issue, the weighted average cost of capital of SEB will increase from 5.14% to 5.32% arising from the increase in equity financing which has a higher required rate of return as compared to debt financing.


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Premised on the above where the potential advantages outweigh the potential disadvantages, as well as our evaluation of the Proposed Exemption on a holistic basis, we are of the opinion that, on the basis of the information available to us, the Proposed Exemption is fair and reasonable.

Accordingly, we recommend that the non-interested shareholders of SEB vote in favour of the ordinary resolution in respect of the Proposed Exemption to be tabled at the forthcoming EGM.

Yours faithfully For and on behalf of MERCURY SECURITIES SDN BHD

CHEW SING GUAN DENIS LIM Managing Director Director / Head of Corporate Finance

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ATTACHMENT I – INFORMATION ON SEB

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1. HISTORY AND PRINCIPAL ACTIVITIES

SEB was set up as a special purpose company to facilitate the merger of the businesses of SapuraCrest Petroleum Berhad and Kencana Petroleum Berhad, which was completed on 15 May 2012.

SEB was incorporated in Malaysia under the Companies Act, 1965 on 30 June 2011 as a private limited company under the name of Integral Key Sdn Bhd. It was converted into a public company under the name of Integral Key Berhad on 20 September 2011. On 19 December 2011, the Company changed its name to Sapura-Kencana Petroleum Berhad. On 5 April 2012, the Company further changed its name to SapuraKencana Petroleum Berhad before assuming its present name on 24 March 2017. SEB was listed on the Main Market of Bursa Securities on 17 May 2012.

SEB is principally involved in investment holding and provision of management services to its subsidiaries. The subsidiaries of SEB are principally engaged in the following:-

Business segments Description

Engineering and Construction (“E&C”)

Front-end engineering design (Feed), detailed design engineering (DDE), procurement, construction (fabrication), offshore transportation and installation, hook-up, commissioning and maintenance of fixed and floating oil and gas facilities, brownfield rejuvenation, diving, survey and subsea inspection, repair and maintenance (IRM) services, flexible and rigid pipelay, installation of subsea umbilicals, riser and flowlines, decommissioning of offshore structure and manufacturing and operation of remotely operated vehicles (ROV)

Drilling Services Provision of tender-assisted drilling services for the purposes of development drilling, production drilling, well completion, workovers as well as plug and abandonment for operators

Exploration and Production (“E&P”)

Exploration, development and production of crude oil and natural gas

2. SHARE CAPITAL

2.1 Issued share capital

The issued share capital of SEB as at the LPD is as follows:-

No. of SEB Shares(‘000)

Amount(RM’000)

Issued share capital 5,992,155 8,066,410

As at the LPD, there is only 1 class of shares in SEB i.e. the SEB Shares. All the SEB Shares rank pari passu in terms of voting rights and entitlements to any dividends, rights, allotments and/or distributions (including any capital distributions) which may be declared, made or paid to shareholders.

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ATTACHMENT I – INFORMATION ON SEB (cont’d)

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2.2 Changes in the issued share capital

There is no change in the issued share capital of SEB since the end of the FYE 31 January 2018 up to the LPD.

2.3 Convertible securities

As at the LPD, SEB does not have any convertible securities.

3. SUBSTANTIAL SHAREHOLDERS

The shareholders of SEB holding 5% or more of the total number of SEB Shares and their shareholdings in SEB based on the Register of Substantial Shareholders as at the LPD are as follows:-

Name

Direct interest Indirect interestNo. of SEB

Shares %(1)No. of SEB

Shares %(1)

STSB 953,004,474 15.90 6,522,000(2) 0.11

SHSB - - 1,007,544,718(3) 16.81

TSS 37,811,692 0.63 1,007,544,718(4) 16.81

DSS 506,385 0.01 1,007,544,718(4) 16.81

Brothers Capital Sdn Bhd - - 1,007,544,718(4) 16.81

KWAP 411,557,524 6.87 47,584,700 (5) 0.79

ASB 387,000,000 6.46 - -

Notes:- (1) Computed based on the total number of 5,992,155,087 SEB Shares as at the LPD. (2) Deemed interested by virtue of its shareholding in Jurudata Sdn Bhd pursuant to Section 8 of

the Act. (3) Deemed interested by virtue of being a substantial shareholder of STSB, Sapura Resources

Berhad, Sapura Capital Sdn Bhd, Indera Permai Sdn Bhd and Jurudata Sdn Bhd pursuant to Section 8 of the Act.

(4) Deemed interested by virtue of being a substantial shareholder of SHSB pursuant to Section 8 of the Act.

(5) Total shareholdings managed by KWAP’s fund managers pursuant to Section 8 of the Act.

4. DIRECTORS

As at the LPD, the Directors of SEB (all Malaysians) and their shareholdings in SEB are as follows:-

Name / Designation Address

Direct IndirectNo. of SEB

Shares(‘000) %(1)

No. of SEB Shares(‘000) %(1)

Dato’ Hamzah Bakar(Chairman, Non-Independent Non-Executive Director)

14 Jalan Bola Lisut 13/1740100 Shah Alam Selangor Darul Ehsan

- - - -

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Name / Designation Address


Shares(‘000) %(1)


Tan Sri Dato’ Seri Shahril Shamsuddin(President and Group Chief Executive Officer, Non-Independent Executive Director)

66 Jalan Kuda EmasThe Mines Resort City43300 Seri KembanganSelangor Darul Ehsan

37,812 0.63 (2)1,007,545 16.81

Tan Sri Datuk Amar (Dr) Hamid Bugo(Senior Independent Non-Executive Director)

325 Jalan Siol KandisPetra Jaya93050 KuchingSarawak

256 (5)- (3)275 (5)-

Dato’ Shahriman Shamsuddin(Non-IndependentNon-Executive Director)

67 Jalan Kuda EmasThe Mines Resort City43300 Seri KembanganSelangor Darul Ehsan

506 0.01 (2)1,007,545 16.81

Mohamed Rashdi Mohamed Ghazalli(IndependentNon-Executive Director)

7 Lorong Batai BaratDamansara Heights50490 Kuala Lumpur

98 (5)- (4)49 (5)-

Gee Siew Yoong(IndependentNon-Executive Director)

62 Jalan Sri Hartamas 250480 Kuala Lumpur

- - - -

Datuk Ramlan Abdul Malek(Non-IndependentNon-Executive Director)

56 Jalan Menara U8/5Bukit Jelutong40150 Shah AlamSelangor Darul Ehsan

486 0.01 - -

Datuk Muhamad Noor Hamid(IndependentNon-Executive Director)

5 Jalan SS4B/10Kelana Jaya47301 Petaling JayaSelangor Darul Ehsan

- - - -

Datuk Ramlan Abdul Rashid(IndependentNon-Executive Director)

6 Jalan TR 7/1Tropicana Golf & Country Resort47410 Petaling JayaSelangor Darul Ehsan

- - - -

Notes:- (1) Computed based on the total number of 5,992,155,087 SEB Shares as at the LPD. (2) Deemed interested by virtue of being a substantial shareholder of SHSB pursuant to Section 8

of the Act. SHSB is a substantial shareholder of STSB, Sapura Resources Berhad, Sapura Capital Sdn Bhd, Indera Permai Sdn Bhd and Jurudata Sdn Bhd.

(3) Deemed interested by virtue of the shareholding held by him and his children in Sego Holdings Sdn Bhd, which in turn holds 50% in Santubong Properties Sdn Bhd, pursuant to Section 8 of the Act.


(5) Negligible.

99


57

5. SUBSIDIARIES AND ASSOCIATED COMPANIES

The details of the subsidiaries of SEB as at the LPD are as follows:-

Name of companyCountry of

incorporation Principal activities

Equity interest

held(%)

Subsidiaries of Sapura Energy Berhad

Total Marine Technology (Malaysia) Sdn Bhd

Malaysia Dormant 100

Sapura Deepwater Pte Ltd Bermuda Chartering and hiring out of vessels and barges

100

Sapura GeoSciences Sdn Bhd Malaysia Provision of offshore geotechnical and geophysical services

100

Sapura Technology Solutions Sdn Bhd Malaysia Investment holding, provision of operation and maintenance services, and provision of management services

100

Petcon (Malaysia) Sdn Bhd Malaysia Drilling of offshore oil wells 100

SapuraCrest Ventures Sdn Bhd Malaysia Investment holding 100

Crest Hidayat (L) Ltd Federal Territory of

Labuan, Malaysia

Dormant 100

Sapura Perdana Sdn Bhd Malaysia Dormant 100

Sapura Dana SPV Pte Ltd Federal Territory of

Labuan, Malaysia

Chartering and hiring out of vessels and barges

100

SapuraCrest Petroleum Berhad Malaysia Dormant 100

Sapura Probadi Sdn Bhd Malaysia Investment holding 100

Sapura Management Services Sdn Bhd Malaysia Dormant 100

Sapura Nautical Essence Sdn Bhd Malaysia Investment holding 100


100


58



Equity interest

held(%)

Sapura Offshore Sdn Bhd Malaysia Front-end engineering design (FEED), detailed design engineering (DDE), procurement, construction, offshore transportation and installation, hook-up, commissioning and maintenance of fixed and floating oil and gas facilities, diving and subsea services, flexible and rigid pipelay, installation of subsea umbilicals, risers and flowlines and decommissioning of offshore structures

100

Sapura Marine Engineering Sdn Bhd Malaysia Provision of offshore construction and diving equipment

100

Geomark Sdn Bhd Malaysia Investment holding 100

Sapura Energy Ventures Sdn Bhd Malaysia Development and production of petroleum resources

100

Sapura Petroleum Sdn Bhd Malaysia Investment holding 100

Momentum Energy Sdn Bhd Malaysia Investment holding 100

Sapura Fabrication Sdn Bhd Malaysia Provision of offshore and onshore engineering, procurement, construction (fabrication), transportation, installation, hook-up, commissioning and maintenance of fixed and floating oil and gas facilities, brownfield rejuvenation, marine construction, marine conversion, marine repair and infrastructure construction

100

Sapura Onshore Sdn Bhd Malaysia Investment holding, property investment and provision of engineering, fabrication and construction services

100

Sapura Engineering Sdn Bhd Malaysia Provision of front-end engineering design (FEED) and detailed design engineering (DDE)

100

SE Petroleum Berhad Malaysia Dormant 100

Sapura Pinewell Sdn Bhd Malaysia Hook-up, commissioning, maintenance brownfield rejuvenation and onshore construction

100

Sapura Petroleum Ventures Sdn Bhd Malaysia Investment holding 100

101


59



Equity interest

held(%)

SEB Energy Sdn Bhd Malaysia Development and production of petroleum resources

100

Sapura Subsea Services Sdn Bhd Malaysia Provision of offshore diving andrelated services and the provision of diving equipment for rental

100

Sapura TMC Sdn Bhd Malaysia Provision of treasury management services

100

Sapura Drilling Pte Ltd (Labuan) Federal Territory of

Labuan, Malaysia

Investment holding 100

Sapura 900 Pte Ltd Federal Territory of

Labuan, Malaysia

Vessel owner and chartering 100

SapuraKencana 1200 Pte Ltd Federal Territory of

Labuan, Malaysia

Dormant 100

Sapura 3000 Pte Ltd Federal Territory of

Labuan, Malaysia

Vessel owner and chartering 100

SapuraKencana FLB-1 Pte Ltd Federal Territory of

Labuan, Malaysia

Dormant 100

Sapura Upstream Sdn Bhd (formerly known as Sapura Exploration and Production Sdn Bhd)

Malaysia Investment holding 100

Sapura Energy Services Sdn Bhd (formerly known as Sapura Fabrication & HUC Sdn Bhd)


Held through SapuraCrest Ventures Sdn Bhd

Sapura Exploration and Production (RSC) Sdn Bhd


Held through Sapura Probadi Sdn Bhd and Sapura Drilling Asia Limited

Sapura Drilling Asia Sdn Bhd Malaysia Provision of oil drilling services 100

Varia Perdana Sdn Bhd Malaysia Investment holding 100

102


60



Equity interest

held(%)

Held through Varia Perdana Sdn Bhd

Crest Tender Rigs Pte Ltd Federal Territory of

Labuan, Malaysia

Leasing and chartering of offshore oil and gas rigs

100

Held through Sapura Offshore Sdn Bhd

SapuraKencana Talent Ltd Bermuda Provision of manpower services 100

Sapura 1200 Ltd Bermuda Vessel owner and chartering 100

Sapura 3500 Ltd Bermuda Vessel owner and chartering 100

Sapura FLB-1 Ltd Bermuda Vessel owner and chartering 100

Sapura Saudi Arabia Company Saudi Arabia Engineering, procurement, construction, installation and commissioning of offshore and onshore facilities pipelines, subsea flexible pipes and cables hook-up, commissioning, brownfield rejuvenation and subseainspection, maintenance and repair services

100

Sapura Energy DMCC Dubai, United Arab Emirates

Onshore and offshore oil and gas fields services

100

Held through Sapura Offshore Sdn Bhd and Sapura Energy DMCC

Sapura Energy Do Brazil Ltda Brazil Engineering, procurement, construction, installation and commissioning of offshore facilities and pipelines

100

Held through Total Marine Technology Pty Ltd

Sapura Excersize Pty Ltd Australia Owner and operator of ROVs for the offshore oil and gas industries

94

Sapura Babalon Pty Ltd Australia Owner and operator of ROVs for the offshore oil and gas industries

94

Held through Sapura GeoSciences Sdn Bhd

Sapura Jaya Sdn Bhd Malaysia Chartering of vessels 100

103


61



Equity interest

held(%)

Held through Sapura Jaya Sdn Bhd

Sapura GeoSurvey Sdn Bhd Malaysia Hydrographic surveys and related services

100

Sapura GeoTechnics Sdn Bhd Malaysia Soil investigation and geotechnical services

100

Held through Sapura GeoTechnics Sdn Bhd

Sapura GeoTechnics (S) Pte Ltd Singapore Soil investigation and geotechnical services

100

Sapura Oilserve Sdn Bhd Malaysia Provision of marine vessel transportation services

100

Held through Sapura GeoSurvey Sdn Bhd

Sapura GeoSurvey Pte Ltd Singapore Hydrographic surveys and related services

100

Sapura GeoSurvey Pty Ltd Australia Dormant 100

Held through Sapura Oilserve Sdn Bhd

Sapura Oilserve Labuan Pte Ltd Federal Territory of

Labuan, Malaysia

Leasing of vessels/barges 100

Held through Sapura Technology Solutions Sdn Bhd

Sapura Digital Solutions Sdn Bhd Malaysia Retail automation systems and maintenance services

100

Sapura Project Services Sdn Bhd Malaysia Systems integration, software development, general engineering, maintenance and related activities

100

Sapura Power Services Sdn Bhd Malaysia Provision of maintenance services to the power, utility and oil and gas industries

94.4

Sapura Diving Services Sdn Bhd Malaysia Provision of rental equipment 100

Sapura Maintenance Services Sdn Bhd Malaysia Provision of maintenance services to the power, utility and oil and gas industries

100

Sapura Petroleum Technologies Sdn Bhd Malaysia Provision of trading and maintenance services

99.7

Sapura Energy Infinite Sdn Bhd Malaysia Investment holding and provision of operations and maintenance services to the oil and gas industry

100

104


62



Equity interest

held(%)

Sapura Vessels Pte Ltd Federal Territory of

Labuan, Malaysia

Leasing of barges, vessels and operational equipment on bareboat basis

100

Sapura Services Sdn Bhd Malaysia Investment holding 100

Held through Sapura Energy Infinite Sdn Bhd

Sapura Energy Resources Sdn Bhd Malaysia Investment holding 100

Held through Sapura Energy Resources Sdn Bhd

Sarku Engineering Services Sdn Bhd Malaysia Provision of offshore engineering and marine support and logistic assistance for the oil and gas industry

100

Sapura Marine Ventures Sdn Bhd Malaysia Provision of crew, chartering and hiring out of barges

100

Sapura Engineering (Offshore) Sdn Bhd Malaysia Chartering and hiring out of barges, vessels and operational equipment including provision of crew

100

Sapura Prominent Energy Sdn Bhd Malaysia Dormant 100

Held through Sapura Petroleum Sdn Bhd

Sapura Nautical Bay Pte Ltd Singapore Provision of manpower services 100

Sapura Petroleum Inc. United States of America

Regional Office for business development and marketing

100

SapuraMex Pte Ltd Singapore Investment holding 100

Sapura Energy B.V. The Netherlands

Design, fabricate, install, commission and maintenance of marine offshore facilities

100

SapuraKencana Enerji Çözümleri Anonim Şirketi

Turkey Engineering, procurement, construction, installation and commissioning of offshore facilities and cables

100

Held through Sapura Nautical Bay Pte Ltd

Sapura Nautical Power Pte Ltd Singapore Investment holding 100

Held through Sapura Offshore Sdn Bhd and SapuraMex Pte Ltd

SapuraKencana Mexicana, S.A.P.I. de C.V. Mexico Engineering, procurement, construction, installation and commissioning of offshore facilities and pipelines

100

105


63



Equity interest

held(%)

Held through SapuraMex Pte Ltd

Sapura 3500 (S) Pte Ltd Singapore Chartering and hiring out of vessel

100

Held through Momentum Energy Sdn Bhd

Sapura Australia (Holdings) Pty Ltd Australia Investment holding 100

Held through Sapura Australia (Holdings) Pty Ltd

Sapura USA Holdings Incorporated United States of America

Investment holding 100

Sapura Australia Pty Ltd Australia Investment holding 100

Peritus International Limited United Kingdom

Provision of advanced subsea and floating systems engineering, project management services to offshore oil and gas projects and developments in remote, hostile and deepwater environments

100

Peritus International Pty Ltd Australia Provision of advanced subsea and floating systems engineering and project management services to offshore projects

100

Held through Held through Sapura Australia Pty Ltd

Sapura Petroleum (Australia) Pty Ltd Australia Investment holding 100

Sapura Projects Pty Ltd Australia Investment holding 100

SC Projects Australia Pty Ltd Australia Investment holding 100

Sapura Constructor Pte Ltd Singapore Vessel owner and chartering 100

Sapura Assets Pty Ltd Australia Owner and operator of marine assets

100

Held through Sapura USA Holdings Incorporated

Ocean Flow International LLC United States of America

Provision of technical consulting and advising to oil and gas operating companies

100

Peritus International Incorporated United States of America

Provision of advanced subsea and floating systems engineering and project management services to offshore oil and gas projects

100

106


64



Equity interest

held(%)

Held through Momentum Energy Sdn Bhd and Sapura Australia Pty Ltd

Normand Sapura Pty Ltd Australia Sub-charter and provision of project delivery capabilities, technology and proprietary offshore assets

100

Held through Peritus International Pty Ltd

Peritus International Sdn Bhd Malaysia Provision of engineering consultancy services for the oil and gas industry

100

Held through Sapura Constructor Pte Ltd

Sapura Projects Singapore Pte Ltd Singapore Vessel leasing and chartering 100

Held through Geomark Sdn Bhd

Quippo Prakash Pte Ltd Singapore Dormant 100

Held through Sapura Fabrication Sdn Bhd

Sapura Marine Sdn Bhd Malaysia Operation and management of fabrication yard

100

Sapura Infrastructure Sdn Bhd Malaysia Dormant 100

Sapura Metering Sdn Bhd Malaysia Dormant 100

Sapura Steelworks Sdn Bhd Malaysia Dormant 70

Held through Sapura Fabrication Sdn Bhd and Sapura Petroleum Sdn Bhd

Sapura Engineering & Construction (India) Private Limited

India Engineering, procurement, construction, installation and commissioning of offshore facilities and pipelines

100

Held through Sapura Energy Services Sdn Bhd (formerly known as Sapura Fabrication & HUC Sdn Bhd)

Sapura HUC Sdn Bhd Malaysia Dormant 100

Sapura Fabricators Sdn Bhd Malaysia Dormant 100

Total Marine Technology Pty Ltd Australia Development of marine technology and marine chartering, specialising on ROVs

94

Held through Sapura Fabrication Sdn Bhd and Sapura Petroleum Ventures Sdn Bhd

Sapura Energy (B) Sdn Bhd Brunei Investment holding 100


64



Equity interest

held(%)

Held through Momentum Energy Sdn Bhd and Sapura Australia Pty Ltd

Normand Sapura Pty Ltd Australia Sub-charter and provision of project delivery capabilities, technology and proprietary offshore assets

100

Held through Peritus International Pty Ltd

Peritus International Sdn Bhd Malaysia Provision of engineering consultancy services for the oil and gas industry

100

Held through Sapura Constructor Pte Ltd

Sapura Projects Singapore Pte Ltd Singapore Vessel leasing and chartering 100

Held through Geomark Sdn Bhd

Quippo Prakash Pte Ltd Singapore Dormant 100

Held through Sapura Fabrication Sdn Bhd

Sapura Marine Sdn Bhd Malaysia Operation and management of fabrication yard

100

Sapura Infrastructure Sdn Bhd Malaysia Dormant 100

Sapura Metering Sdn Bhd Malaysia Dormant 100

Sapura Steelworks Sdn Bhd Malaysia Dormant 70

Held through Sapura Fabrication Sdn Bhd and Sapura Petroleum Sdn Bhd

Sapura Engineering & Construction (India) Private Limited

India Engineering, procurement, construction, installation and commissioning of offshore facilities and pipelines

100

Held through Sapura Energy Services Sdn Bhd (formerly known as Sapura Fabrication & HUC Sdn Bhd)

Sapura HUC Sdn Bhd Malaysia Dormant 100

Sapura Fabricators Sdn Bhd Malaysia Dormant 100

Total Marine Technology Pty Ltd Australia Development of marine technology and marine chartering, specialising on ROVs

94

Held through Sapura Fabrication Sdn Bhd and Sapura Petroleum Ventures Sdn Bhd

Sapura Energy (B) Sdn Bhd Brunei Investment holding 100

107


65



Equity interest

held(%)

Held through Sapura Energy (B) Sdn Bhd

RSK Petroleum Sdn Bhd Brunei To act as service provider for oil and gas industry

70

Held through Sapura Onshore Sdn Bhd

Sapura Subsea Sdn Bhd Malaysia Provision of engineering, fabrication and constructionworks

100

Sapura Assets Sdn Bhd Malaysia Property investment 100

Sapura Torsco (Hong Kong) Private Limited Hong Kong Dormant 100

Held through Sapura Petroleum Ventures Sdn Bhd

Sapura Marine Drilling Sdn Bhd Malaysia Dormant 100

Sapura Marine Rig 1 Pte Ltd Singapore Dormant 100

Sapura Nautilus Sdn Bhd Malaysia Service provider for offshore support vessels

100

Held through Sapura Nautilus Sdn Bhd

Sapura Gemia (Labuan) Pte Ltd Federal Territory of

Labuan, Malaysia

Provision of offshore support vessels for the oil and gas industry

100

Sapura Teras Ventures Sdn Bhd Malaysia Provision of offshore support vessels for the oil and gas industry

100

Sapura Redang (Labuan) Pte Ltd Federal Territory of

Labuan, Malaysia

Provision of offshore support vessels for the oil and gas industry

100

Held through Sapura Subsea Services Sdn Bhd

Sapura Marine Services Sdn Bhd Malaysia Provision of vessel related management services

100

Sapura Subsea Corporation Federal Territory of

Labuan, Malaysia

Leasing of vessels and related equipment

100

Maju Hydro Sdn Bhd Malaysia Dormant 100

Sapura SS Corporation Federal Territory of

Labuan, Malaysia

Dormant 100

108


66



Equity interest

held(%)

Sapura Subsea Robotics Corporation Federal Territory of

Labuan, Malaysia

Leasing of ROV and HyperbaricReception Facility

100

Held through Sapura Subsea Services Sdn Bhd, Sapura Marine Services Sdn Bhd and Sapura SS Corporation

Sapura Energy (Thailand) Limited Thailand Provision of offshore diving and related services

100

Held through Sapura Drilling Pte Ltd (Labuan)

Sapura Drilling (S) Pte Ltd Singapore Leasing of offshore oil and gas drilling rigs and providing management services

100

Sapura Drilling (Bermuda) Ltd Bermuda Investment holding 100

Sapura Drilling Resources Ltd Bermuda Provision of crew services 100

Sapura Drilling Labuan Leasing Ltd Federal Territory of

Labuan, Malaysia

Hire and charter of the oil drilling rigs

100

Held through Sapura Drilling (Bermuda) Ltd

Sapura Drilling T-10 Ltd Bermuda Leasing of offshore oil and gas drilling rig

100


100

Sapura Drilling T-7 Ltd Bermuda Dormant 100




100


100


100


100

Sapura Drilling Menang Ltd Bermuda Leasing of offshore oil and gas drilling rig

100

Sapura Drilling Berani Ltd Bermuda Leasing of offshore oil and gas drilling rig

100

109


67



Equity interest

held(%)

Sapura Drilling Alliance Ltd Bermuda Leasing of offshore oil and gas drilling rig

100

Sapura Drilling Pelaut Ltd Bermuda Leasing of offshore oil and gas drilling rig

100

Sapura Drilling Setia Ltd Bermuda Leasing of drilling rig and providing drilling service to offshore oil and gas industry

100

Sapura Drilling Esperanza Ltd Bermuda Leasing of drilling rig and providing drilling service to offshore oil and gas industry

100

Sapura Drilling Jaya Ltd Bermuda Leasing of drilling rig and providing drilling service to offshore oil and gas industry

100

Sapura Drilling Raiqa Ltd Bermuda Leasing of offshore oil and gas drilling rig

100

Sapura Drilling Asia Limited Hong Kong Investment holding and the provision of oil drilling services

100

Sapura Drilling Services Sdn Bhd Malaysia Provision of management services for tender rig business

100

Sapura Drilling Holdings (Panama) Inc Panama Investment holding 100

Sapura Drilling T-19 Pte Ltd Federal Territory of

Labuan, Malaysia

Dormant 100

Sapura Drilling T-20 Pte Ltd Federal Territory of

Labuan, Malaysia

Dormant 100

Sapura Drilling Kinabalu Pte Ltd Federal Territory of

Labuan, Malaysia

Dormant 100

Sapura Drilling Teknik Berkat Ltd Bermuda Dormant 100

Held through Sapura Drilling Asia Limited

Sapura Drilling Holdings Limited Hong Kong Investment holding and the provision of oil drilling services

100

Held through Sapura Drilling Holdings (Panama) Inc. and Sapura Drilling Asia Limited

Sapura Drilling Sdn Bhd Brunei Offshore drilling, workover anddevelopment of oil and gas wells

100

110


68



Equity interest

held(%)

Held through Sapura Drilling Asia Limited and Sapura Drilling Holdings Limited

SapuraKencana Drilling Angola, LDA Republic of Angola

Dormant 100

Held through Sapura Drilling Pte Ltd (Labuan) and Sapura Drilling Asia Limited

PT Sapura Nordrill Indonesia (formerly known as PT SapuraKencana Nordrill Indonesia)

Indonesia Offshore oil and gas construction and drilling services

95

Held through Sapura Upstream Sdn Bhd (formerly known as Sapura Exploration and Production Sdn Bhd)

Sapura Exploration and Production (Southeast Asia) Inc

Bahamas Investment holding 100

Sapura Exploration and Production (Oceania) Sdn Bhd


Sapura Exploration and Production (Americas) Sdn Bhd


Held through Sapura Upstream Sdn Bhd (formerly known as Sapura Exploration and Production Sdn Bhd) and Sapura Exploration and Production (Mexico) Sdn Bhd

SEP Block 30, S. de R.L. de C.V. Mexico Exploration, development and production of crude oil and natural gas

100

Held through Sapura Exploration and Production (NZ) Sdn Bhd (formerly known as Sapura Exploration and Production (JV) Sdn Bhd)

Sapura Exploration and Production OMV JV Sdn Bhd

Malaysia Production of crude gaseous hydrocarbon (natural gas), draining and separation of liquid hydrocarbon fractions and mining of hydrocarbon liquids, obtain through liquefaction or pyrolysis

100

Held through Sapura Exploration and Production (Southeast Asia) Inc

Sapura Exploration and Production (Malaysia) Inc.

Bahamas Investment holding 100

111


69



Equity interest

held(%)

Held through Sapura Exploration and Production (Malaysia) Inc

Sapura Exploration and Production (PM) Inc Bahamas Exploration, development and production of crude oil and natural gas

100

Sapura Exploration and Production (Sabah) Inc

Bahamas Exploration, development and production of crude oil and natural gas

100

Sapura Exploration and Production (Sarawak) Inc

Bahamas Exploration, development and production of crude oil and natural gas

100

Held through Sapura Exploration and Production (RSC) Sdn Bhd

Sapura Sambang Sdn Bhd Malaysia Dormant 100

Held through Sapura Exploration and Production (Americas) Sdn Bhd

Sapura Exploration and Production (Mexico) Sdn Bhd


Held through Sapura Exploration and Production (Ocenia) Sdn Bhd

Sapura Exploration and Production (NZ) Sdn Bhd(formerly known as Sapura Exploration and Production (JV) Sdn Bhd)


Sapura Exploration and Production (Australia) Sdn Bhd

Malaysia Investment Holding 100

Held through Sapura Exploration and Production (Australia) Sdn Bhd

Sapura Exploration and Production (Western Australia) Pty Ltd

Australia Exploration, development and production of crude oil and natural gas

100

The details of the associated companies of SEB as at the LPD are as follows:-



Equity interest

held(%)

Held through Sapura Technology Solutions Sdn Bhd

Geowell Sdn Bhd Malaysia Wireline and well completion services

30

Subang Properties Sdn Bhd Malaysia Dormant 36.2

112


70



Equity interest

held(%)

Held through SapuraCrest Ventures Sdn Bhd

Labuan Shipyard & EngineeringSdn Bhd

Malaysia Shipbuilding, ship repair, naval craft maintenance and oil and gas fabrication

50

Held through Sapura Engineering Sdn Bhd

Best Wide Engineering (M)Sdn Bhd

Malaysia Undertaking engineering and technical works

30

Matrix Maintenance Sdn Bhd Malaysia Maintenance contractors for petrol chemical plants and general industries

30

The details of the joint venture companies of SEB as at the LPD are as follows:-



Equity interest

held(%)

Held through Sapura Probadi Sdn Bhd

Uzmal Oil Inc Uzbekistan Oilfield production 50

Held through Sapura Nautical Essence Sdn Bhd

SapuraAcergy Sdn Bhd Malaysia Dormant 50

SapuraAcergy Assets Pte Ltd Federal Territory of

Labuan, Malaysia

Leasing of vessels barges and equipment on bareboat basis

49

Held through SapuraAcergy Sdn Bhd

SapuraAcergy (Australia) Pty Ltd(In the process of voluntary liquidation)

Australia Management and operation of vessel and provision of offshore related works

50

Held through Sapura Nautical Power Pte Ltd

L&T Sapura Shipping Private Limited India Vessel owner and chartering 40

L&T Sapura Offshore Private Limited India Provision of engineering and installation services

40

113


71



Equity interest

held(%)

Held through Sapura Offshore Sdn Bhd

Seabras Sapura Participações S.A. Brazil Investment holding 50

Seabras Sapura Holding, GmbH Austria Investment holding 50

Held through Seabras Sapura Participações S.A.

Sapura Navegação Maritima S.A. Brazil Vessel owner and chartering 50

Held through Seabras Sapura Holding, GmbH

Seabras Sapura PLSV Holding GmbH Austria Investment holding 50

Held through Seabras Sapura PLSV Holding GmbH

Seabras Sapura Holdco Ltd. Bermuda Investment holding 50

Sapura Diamante GmbH Austria Vessel owner and chartering 50

Sapura Topazio GmbH Austria Vessel owner and chartering 50

Sapura Onix GmbH Austria Vessel owner and chartering 50

Sapura Jade GmbH Austria Vessel owner and chartering 50

Sapura Rubi GmbH Austria Vessel owner and chartering 50

Held through Seabras Sapura Holdco Ltd

Seabras Sapura Talent Ltd Bermuda Provision for manpower services

50

TL Offshore PLSV1 Ltd Bermuda Dormant 50





Held through Sapura Navegação Maritima S.A.

Let’s Log Serviços Intergrados deLogística Ltda

Brazil Management of general warehouses and deposits

50

Held through Sapura Services Sdn Bhd

Sapura GE Oil & Gas Services Sdn Bhd Malaysia Provision of repair and maintenance services & sales of parts to the energy sector

51

114


72

6. PROFIT AND DIVIDEND RECORD

A summary of the Group’s results based on the audited consolidated financial statements of SEB for the FYE 31 January 2016, 31 January 2017 and 31 January 2018 as well as the latest unaudited consolidated financial statements of SEB for the 6-month FPE 31 July 2018 is as follows:-

Unaudited for the 6-month FPE 31 July Audited for the FYE 31 January

2018(RM’000)

2018(RM’000)

2017(RM’000)

2016(RM’000)

Revenue 2,314,648 5,894,998 7,651,323 10,184,031

(Loss) / Profit before tax (187,847) (2,323,589) 385,248 (712,639)Income tax expense (74,649) (181,226) (179,084) (78,806)(Loss) / Profit for the year (262,496) (2,504,815) 206,164 (791,445)

(Loss) / Profit attributable to:-- equity holders of the Company (261,789) (2,503,473) 208,316 (791,555)- non-controlling interests (707) (1,342) (2,152) 110

(262,496) (2,504,815) 206,164 (791,445)

Weighted average number of ordinary shares in issue (‘000)

5,952,277 5,946,662 5,950,838 5,971,797

Basic (loss per share) / EPS (sen)(1) (4.40) (42.10) 3.50 (13.25)

Net dividend per SEB Share (sen) - - 1.00 1.35

Note:- (1) The Company does not have any dilutive potential ordinary shares. Accordingly, the diluted (loss

per share) / EPS is not presented.

Save as disclosed below, there is no material exceptional item in the audited consolidated financial statements of SEB for the past 3 financial years up to the 31 January 2018 and the latest unaudited consolidated financial statements of SEB for the 6-month FPE 31 July 2018 which affected the profit for the respective financial year / period:-

(i) the Group recognised provision for impairment of RM2,029.3 million for the FYE 31January 2016 (in respect of expenditure on oil and gas properties; property, plant and equipment; and investment in joint ventures) and RM2,132.3 million for the FYE 31 January 2018 (in respect of property, plant and equipment) arising from the significant prolonged downturn in the O&G industry;

(ii) the Group recognised several one-off items in its consolidated income statement for the FYE 31 January 2017 arising from the cessation of the Berantai Risk Service Contract (“RSC”) with Petronas on 30 September 2016. The key financial impact to the consolidated income statement in relation to the cessation of the Berantai RSC are as follows:-

Impact on profit or loss for the FYE 31 January 2017Increase (RM’000)

Other income- Compensation from Petronas 1,336,488

Other expenses- Early termination payment 763,767- Accelerated depreciation and amortisation on O&G properties 607,412

Share of profit from associates and joint ventures (1)81,570


72




2018(RM’000)

2018(RM’000)

2017(RM’000)

2016(RM’000)

Revenue 2,314,648 5,894,998 7,651,323 10,184,031



(262,496) (2,504,815) 206,164 (791,445)


5,952,277 5,946,662 5,950,838 5,971,797













72




2018(RM’000)

2018(RM’000)

2017(RM’000)

2016(RM’000)

Revenue 2,314,648 5,894,998 7,651,323 10,184,031



(262,496) (2,504,815) 206,164 (791,445)


5,952,277 5,946,662 5,950,838 5,971,797












115


73

Note:- (1) This refers to the share of profit from Berantai Floating Production Limited (“BFPL”)

(previously an indirect 49%-owned joint venture company of SEB) arising from the cessation of the Berantai RSC. BFPL was subsequently dissolved on 14 May 2017.

7. STATEMENT OF ASSETS AND LIABILITIES

The statement of assets and liabilities of SEB based on its audited consolidated financial statements for the FYE 31 January 2017 and 31 January 2018 as well as the latest unaudited consolidated financial statements for the 6-month FPE 31 July 2018 are as follows:-

Unaudited as at 31 July Audited as at 31 January

2018 2018 2017(RM’000) (RM’000) (RM’000)

ASSETSNon-current assetsProperty, plant and equipment 11,583,170 11,454,733 15,140,032Expenditure on oil and gas properties 4,172,811 3,938,046 4,398,855Intangible assets 8,078,295 7,918,880 8,483,530Investment in associates and joint ventures 1,804,263 1,557,506 1,858,609Deferred tax assets 141,874 103,690 221,571Derivative assets 198,583 262,563 -Trade receivables 38,921 30,537 39,129Total non-current assets 26,017,917 25,265,955 30,141,726

Current assetsInventories 460,295 376,555 458,483Trade and other receivables 2,893,624 2,530,111 3,234,444Tax recoverable 100,487 103,913 95,099Cash and cash equivalents 994,235 1,716,235 3,519,509Total current assets 4,448,641 4,726,814 7,307,535TOTAL ASSETS 30,466,558 29,992,769 37,449,261

EQUITY AND LIABILITIESShare capital(1) 8,066,410 8,066,410 8,066,410Shares held under trust (114,942) (114,942) (93,304)Other reserves 1,667,345 1,443,619 2,485,032(Accumulated losses)/Retained profits (206,910) 54,879 2,617,980Equity attributable to equity holders of the Company 9,411,903 9,449,966 13,076,118Non-controlling interests (368) 399 4,190Total equity 9,411,535 9,450,365 13,080,308

Non-current liabilitiesBorrowings 11,116,782 14,692,954 15,135,967Trade and other payables 102,722 1,620 347,043Provision for assets retirement obligation 209,946 196,118 251,967Derivative liabilities - - 21,859Deferred tax liabilities 1,108,935 1,023,726 1,282,684Total non-current liabilities 12,538,385 15,914,418 17,039,520

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Unaudited as at 31 July Audited as at 31 January

2018 2018 2017(RM’000) (RM’000) (RM’000)

Current liabilitiesBorrowings 5,755,971 1,722,201 3,511,050Trade and other payables 2,613,061 2,797,114 3,765,602Provision for assets retirement obligation 14,112 25,086 28,377Income tax payable 133,494 83,585 24,404Total current liabilities 8,516,638 4,627,986 7,329,433Total liabilities 21,055,023 20,542,404 24,368,953TOTAL EQUITY AND LIABILITIES 30,466,558 29,992,769 37,449,261

Note:- (1) Pursuant to the commencement of the Act, all amounts standing to the credit of share premium

account of SEB has become part of its share capital.

As at the LPD, there is no known material change in the financial position or prospects of SEB subsequent to the latest audited consolidated financial statements for the FYE 31 January 2018.

Within the knowledge of the PNB Group, there has been no material change in the financial position or prospects of SEB since 31 January 2018, being the date of the last audited consolidated financial statements of SEB laid before SEB’s shareholders at its general meeting held on 18 July 2018.

8. ACCOUNTING POLICIES

The audited consolidated financial statements of SEB for the FYE 31 January 2016, 31 January 2017 and 31 January 2018 have been prepared in accordance with approved accounting standards and there was no audit qualification for SEB’s financial statements for the respective years under review.

There is no change in the accounting standards adopted by SEB which would result in a material variation to the comparable figures for the audited consolidated financial statements of SEB for the FYE 31 January 2016, 31 January 2017 and 31 January 2018.


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75

9. BORROWINGS, CONTINGENT LIABILITIES AND MATERIAL COMMITMENTS

As at 31 July 2018, which is not more than 3 months preceding the LPD, the SEB Group has total outstanding borrowings of approximately RM16,872.8 million, all of which are interest bearing, as follows:-

BorrowingsAmount(RM’000)

Non-currentSecured hire purchase and finance lease liabilities 209Unsecured term loans 3,118,222Unsecured Islamic facility 3,473,298Unsecured Sukuk programme 4,525,053Total non-current borrowings 11,116,782

CurrentSecured hire purchase and finance lease liabilities 5,070Unsecured term loans 4,001,053Unsecured revolving credits 1,749,848Total current borrowings 5,755,971

Total bank borrowings 16,872,753

The details on material commitments of the SEB Group as at 31 July 2018, which is not more than 3 months preceding the LPD, are as set out in Section 3.1, Appendix VII of the Circular.

The details on contingent liabilities of the SEB Group as at the LPD are as set out in Section 3.2, Appendix VII of the Circular.

10. MATERIAL LITIGATION

The details on material litigation relating to the SEB Group are as set out in Section 4, Appendix VII of the Circular.

11. MATERIAL CONTRACTS

The SEB Group has not entered into any material contracts (not being contracts entered into in the ordinary course of business) within the 2 years immediately preceding 24 August 2018 (the date of announcement made in relation to the Proposed Rights Issue and Proposed Amendments).


118

ATTACHMENT II – INFORMATION ON PNB

76


PNB was incorporated in Malaysia under the Companies Act 1965 on 17 March 1978.

PNB is principally involved in the acquisition and holding of shares to promote greater ownership of share capital in the corporate sector in Malaysia by Bumiputeras. As at the LPD, PNB is the investment manager for the following funds:-

(i) Unit trust funds

(a) Amanah Saham Bumiputera (“ASB”);

(b) Amanah Saham Malaysia 2 - Wawasan (formerly known as Amanah Saham Wawasan 2020) (“ASM 2 Wawasan”);

(c) Amanah Saham Malaysia (“ASM”);

(d) Amanah Saham Malaysia 3 (formerly known as Amanah Saham 1Malaysia)(“ASM 3”);

(e) Amanah Saham Bumiputera 3 - Didik (formerly known as Amanah Saham Didik) (“ASB 3 Didik”);

(f) Amanah Saham Bumiputera 2 (“ASB 2”);

(g) Amanah Saham Nasional (“ASN”);

(h) ASN Equity 2 (formerly known as Amanah Saham Nasional 2) (“ASN Equity 2”);

(i) ASN Imbang (Mixed Asset Balanced) 1 (formerly known as Amanah Saham Nasional 3 Imbang) (“ASN Imbang 1”);

(j) ASN Umbrella for ASN Equity 3 (formerly known as Amanah Saham Gemilang - Kesihatan) (“ASN Umbrella – ASN Equity 3”);

(k) ASN Umbrella for ASN Imbang (Mixed Asset Balanced) 2 (formerly known as Amanah Saham Gemilang – Pendidikan) (“ASN Umbrella – ASN Imbang 2”);

(l) ASN Umbrella for ASN Sara (Mixed Asset Conservative) 1 (formerly known as Amanah Saham Gemilang – Persaraan) (“ASN Umbrella – ASN Sara 1”);

(m) ASN Equity 5; and

(n) ASN Sara (Mixed Asset Conservative) 2 (“ASN Sara 2”);

(ii) Other funds

(a) Amanah Harta Tanah PNB;

(b) PNB Property Trust;

(c) Yayasan Tun Ismail Mohamed Ali (Berdaftar); and

(d) Bumiputera Wealth Fund.

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ATTACHMENT II – INFORMATION ON PNB (cont’d)

77

2. SUBSTANTIAL SHAREHOLDER

The shareholder of PNB holding 5% or more of the total number of shares in PNB and its shareholding in PNB as at the LPD are as follows:-

Name

Direct IndirectNo. of shares

(‘000) %(1)No. of shares

(‘000) %(1)

Yayasan Pelaburan Bumiputera(2) 99,999 99.9 - -

Notes:- (1) Computed based on the total number of 100,000,000 shares in PNB as at the LPD. (2) The trustees of Yayasan Pelaburan Bumiputera as at the LPD are as follows:-

(i) Tun Dr. Mahathir bin Mohamad; (ii) Dato' Seri Mohamed Azmin bin Ali; (iii) Tan Sri Haji Ambrin bin Buang; and (iv) Tan Sri Dr. Zeti Akhtar Aziz.

3. DIRECTORS

As at the LPD, the directors of PNB (all Malaysians) are as follows:-

Name Designation Address

Tan Sri Dr. Zeti Akhtar Aziz Chairman D19-2, One MenerungJalan Menerung, Bangsar 59100 Kuala Lumpur

Dato' Abdul Rahman bin Ahmad President & Group Chief Executive

No. 1A, Lorong 14/47B46100 Petaling JayaSelangor

Tan Sri Dr. Ali bin Hamsa Director Rumah Kediaman Rasmi Ketua Setiausaha NegaraNo. 1, Jalan Presint 10/5, Presint 1060200 Putrajaya

Tan Sri Dr. Wan Abdul Aziz bin Wan Abdullah Director No. 3, Jalan AU5C/6Lembah Keramat 154200 Kuala Lumpur

Datu Haji Soedirman bin Haji Aini Director No. 76, Lorong 3 AJalan Pelita, Petra Jaya83050 KuchingSarawak

Datuk Dr. Mohd. Yaakub bin Haji Johari Director No. 135, Jalan Kg Tg Aru Lama88100 Tanjung AruSabah

Tan Sri Zarinah Sameehah binti Anwar Director 30, Lorong Taman Pantai 7Bukit Pantai59100 Kuala Lumpur

As at the LPD, the directors of PNB do not have any interest (direct and indirect) in the shares of PNB.

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78


A summary of PNB’s results based on its audited financial statements for the FYE 31 December 2015, 31 December 2016 and 31 December 2017 is as follows:-

Audited for the FYE 31 December2017

(RM’000)2016

(RM’000)2015

(RM’000)

Revenue 3,992,427 2,564,985 3,556,538

Profit before taxation and zakat 3,139,771 1,653,096 3,450,703Taxation and zakat (82,387) 12 (105,186)Profit for the year 3,057,384 1,653,108 3,345,517

No. of shares in issue (‘000) 100,000 100,000 100,000

Basic earnings per share (RM)(1)(2) 30.57 16.53 33.46

Net dividend per share (RM) - - -

Notes:- (1) The basic earnings per share (which is computed based on profit for the year divided by the total

number of shares in PNB) is not disclosed in the audited financial statements of PNB and is shown for illustration purposes only.

(2) The company does not have any dilutive potential ordinary shares. Accordingly, the diluted earnings per share is not presented.

There is no material exceptional item in the audited financial statements of PNB for the past 3 financial years up to the FYE 31 December 2017.


The statement of assets and liabilities of PNB based on its audited financial statements for the FYE 31 December 2017 is as follows:-

Audited as at 31 December2017 2016

(RM’000) (RM’000)

ASSETSNon-current assetsProperty and equipment 813,266 762,405Intangible assets 13,885 12,488Investment properties 2,217,445 3,525,304Investments in subsidiaries 6,373,081 6,446,700Investments in associates 15,862,443 13,864,870Other investments 11,070,257 9,745,390Investments in unit trusts 446,664 798,971Long term receivables 2,038,041 1,777,263Total non-current assets 38,835,082 36,933,391

Current assetsTax recoverable 116,411 83,017Receivables 3,501,809 1,576,154Cash and bank balances 3,226,057 3,563,610Asset held for sale 607,709 -Total current assets 7,451,986 5,222,781TOTAL ASSETS 46,287,068 42,156,172

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Audited as at 31 December2017 2016

(RM’000) (RM’000)

EQUITY AND LIABILITIESEQUITYShare capital 100,000 100,000Sekim reserve 144,952 619,852Investment reserve 500,000 500,000Retained profits 29,316,971 26,399,684Total equity 30,061,923 27,619,536

LIABILITIESNon-current liabilitiesBorrowings 13,265,358 12,322,718Income for Program Pembangunan Rakyat Termiskin 130,887 123,389Program for ASW – Bandar 28,890 27,960Professorial Chair – Tun Ismail Mohamed Ali 4,891 4,713Bumiputera Wealth Fund 209,459 208,381Total non-current liabilities 13,639,485 12,687,161

Current liabilitiesPayables 525,983 538,585Borrowings 1,444,680 832,180Provision for bonus distribution 614,997 478,710Total current liabilities 2,585,660 1,849,475Total liabilities 16,225,145 14,536,636TOTAL EQUITY AND LIABILITIES 46,287,068 42,156,172

As at the LPD, there is no known material change in the financial position or prospects of PNB subsequent to the latest audited financial statements for the FYE 31 December 2017.


The audited financial statements of PNB for the FYE 31 December 2015, 31 December 2016 and 31 December 2017 have been prepared in accordance with approved Malaysian accounting standards and there was no audit qualification for PNB’s financial statements for the respective years under review.

There is no change in the accounting standards adopted by PNB which would result in a material variation to the comparable figures for the audited financial statements of PNB for the FYE 31 December 2015, 31 December 2016 and 31 December 2017.


122

ATTACHMENT III – INFORMATION ON ASB

80


ASB is a unit trust fund constituted on 21 October 1989 and launched on 2 January 1990 under the management of PNB.

ASB invests in a portfolio of various asset classes, primarily securities listed on Bursa Securities, unlisted securities, fixed income and money market instruments.

2. UNIT HOLDERS

Eligible investors in the fund include:-

(i) Malaysian Bumiputera individual who is 18 years and above; (ii) citizen of Malaysia who is (a) 18 years and above and (b) a Siamese / Thai descendant,

Portuguese / Eurasian descendant or non-Bumiputera Muslim convert; and (iii) guardian from the above categories applying for units as the guardian for a Malaysian

Bumiputera minor who holds a valid birth certificate but is below 18 years of age.

3. INVESTMENT MANAGER

The investment manager of ASB is PNB.

4. MANAGEMENT COMPANY

The management company of ASB is Amanah Saham Nasional Berhad (“ASNB”), which is a wholly-owned subsidiary of PNB.


A summary of ASB’s results for the FYE 31 December 2015, 31 December 2016 and 31 December 2017 is as follows:-

FYE 31 December2017

(RM’000)2016

(RM’000)2015

(RM’000)

Total investment income 10,805,595 10,462,603 10,208,205

Net income before taxation / after taxation 10,153,005 9,826,229 9,113,804

Income distribution per unit (sen) 7.00 6.75 7.25Bonus per unit (sen) 0.25 0.50 0.50Special bonus per unit (sen) 1.00 - -

There is no material exceptional item for the past 3 financial years up to the FYE 31 December 2017.


There is no statement of assets and liabilities published in the latest annual report of ASB for the FYE 31 December 2017. As at 31 December 2017, the total unit holders’ capital was RM145,903,000,000 comprising 145,903,000,000 units.

As at the LPD, there is no known material change in the financial position of ASB subsequent to the latest annual report of ASB for the FYE 31 December 2017.


80




2. UNIT HOLDERS











FYE 31 December2017

(RM’000)2016

(RM’000)2015

(RM’000)









80




2. UNIT HOLDERS











FYE 31 December2017

(RM’000)2016

(RM’000)2015

(RM’000)









80




2. UNIT HOLDERS











FYE 31 December2017

(RM’000)2016

(RM’000)2015

(RM’000)








123

ATTACHMENT III – INFORMATION ON ASB (cont’d)

81


Based on the annual reports of ASB for the FYE 31 December 2015, 31 December 2016 and 31 December 2017, the financial statements have been prepared in accordance with approved Malaysian accounting standards and there was no audit qualification for ASB’s financial statements for the respective years under review.

There is no change in the accounting standards adopted by ASB which would result in a material variation to the comparable figures for the audited financial statements of ASB for the FYE 31 December 2015, 31 December 2016 and 31 December 2017.


124

ATTACHMENT IV – INFORMATION ON ASM 2 WAWASAN

82


ASM 2 Wawasan is a unit trust fund constituted on 14 August 1996 and launched on 28 August 1996 under the management of PNB.

ASM 2 Wawasan invests in a portfolio of various asset classes, primarily securities listed on Bursa Securities, unlisted securities, fixed income and money market instruments.

2. UNIT HOLDERS


(i) Malaysian individual who is 18 years and above; and (ii) guardian from the above category applying for units as the guardian for a Malaysian



The investment manager of ASM 2 Wawasan is PNB.


The management company of ASM 2 Wawasan is ASNB, which is a wholly-owned subsidiary of PNB.


A summary of ASM 2 Wawasan’s results for the FYE 31 August 2016, 31 August 2017 and 31 August 2018 is as follows:-

FYE 31 August2018

(RM’000)2017

(RM’000)2016

(RM’000)



Income distribution per unit (sen) 6.00 6.00 6.30

There is no material exceptional item for the past 3 financial years up to the FYE 31 August 2018.


There is no statement of assets and liabilities published in the latest annual report of ASM 2 Wawasan for the FYE 31 August 2018. As at 31 August 2018, the total unit holders’ capital was RM19,773,100,000 comprising 19,773,100,000 units.

As at the LPD, there is no known material change in the financial position of ASM 2 Wawasan subsequent to the latest annual report of ASM 2 Wawasan for the FYE 31 August 2018.

125

ATTACHMENT IV – INFORMATION ON ASM 2 WAWASAN (cont’d)

83


Based on the annual reports of ASM 2 Wawasan for the FYE 31 August 2016, 31 August 2017 and 31 August 2018, the financial statements have been prepared in accordance with approved Malaysian accounting standards and there was no audit qualification for ASM 2 Wawasan’s financial statements for the respective years under review.

There is no change in the accounting standards adopted by ASM 2 Wawasan which would result in a material variation to the comparable figures for the audited financial statements of ASM 2 Wawasan for the FYE 31 August 2016, 31 August 2017 and 31 August 2018.


126

ATTACHMENT V – INFORMATION ON ASM

84


ASM is a unit trust fund constituted on 13 April 2000 and launched on 20 April 2000 under the management of PNB.

ASM invests in a portfolio of various asset classes, primarily securities listed on Bursa Securities, unlisted securities, fixed income and money market instruments.

2. UNIT HOLDERS



minor who holds a valid birth certificate but is below 18 years of age.


The investment manager of ASM is PNB.


The management company of ASM is ASNB, which is a wholly-owned subsidiary of PNB.


A summary of ASM’s results for the FYE 31 March 2016, 31 March 2017 and 31 March 2018is as follows:-

FYE 31 March2018

(RM’000)2017

(RM’000)2016

(RM’000)




There is no material exceptional item for the past 3 financial years up to the FYE 31 March 2018.


There is no statement of assets and liabilities published in the latest annual report of ASM for the FYE 31 March 2018. As at 31 March 2018, the total unit holders’ capital was RM18,357,593,000 comprising 18,357,593,000 units.

As at the LPD, there is no known material change in the financial position of ASM subsequent to the latest annual report of ASM for the FYE 31 March 2018.

127

ATTACHMENT V – INFORMATION ON ASM (cont’d)

85


Based on the annual reports of ASM for the FYE 31 March 2016, 31 March 2017 and 31 March 2018, the financial statements have been prepared in accordance with approved Malaysian accounting standards and there was no audit qualification for ASM’s financial statements for the respective years under review.

There is no change in the accounting standards adopted by ASM which would result in a material variation to the comparable figures for the audited financial statements of ASM for the FYE 31 March 2016, 31 March 2017 and 31 March 2018.


128

ATTACHMENT VI – INFORMATION ON ASM 3

86


ASM 3 is a unit trust fund constituted on 25 June 2009 and launched on 5 August 2009 under the management of PNB.

ASM 3 invests in a portfolio of various asset classes, comprising securities listed on Bursa Securities or on recognised overseas stock exchange, unlisted securities, fixed income and money market instruments as well as other capital market instruments in Malaysia as permitted by the deed of ASM 3, and in any recognised market as approved in the deed of ASM 3.

2. UNIT HOLDERS





The investment manager of ASM 3 is PNB.


The management company of ASM 3 is ASNB, which is a wholly-owned subsidiary of PNB.


A summary of ASM 3’s results for the FYE 30 September 2015, 30 September 2016 and 30 September 2017 is as follows:-

FYE 30 September2017

(RM’000)2016

(RM’000)2015

(RM’000)

Total investment income 874,805 785,155 815,463

Net income before taxation / after taxation 724,081 702,433 537,268


There is no material exceptional item for the past 3 financial years up to the FYE 30 September 2017.


There is no statement of assets and liabilities published in the latest annual report of ASM 3 for the FYE 30 September 2017. As at 30 September 2017, the total unit holders’ capital was RM12,068,700,000 comprising 12,068,700,000 units.

As at the LPD, there is no known material change in the financial position of ASM 3 subsequent to the latest annual report of ASM 3 for the FYE 30 September 2017.

129

ATTACHMENT VI – INFORMATION ON ASM 3 (cont’d)

87


Based on the annual reports of ASM 3 for the FYE 30 September 2015, 30 September 2016 and 30 September 2017, the financial statements have been prepared in accordance with approved Malaysian accounting standards and there was no audit qualification for ASM 3’s financial statements for the respective years under review.

There is no change in the accounting standards adopted by ASM 3 which would result in a material variation to the comparable figures for the audited financial statements of ASM 3 for the FYE 30 September 2015, 30 September 2016 and 30 September 2017.


130

ATTACHMENT VII – INFORMATION ON ASB 3 DIDIK

88


ASB 3 Didik is a unit trust fund constituted on 14 April 2001 and launched on 20 April 2001 under the management of PNB.

ASB 3 Didik invests in a portfolio of various asset classes, primarily securities listed on Bursa Securities, unlisted securities, fixed income and money market instruments.

2. UNIT HOLDERS


(i) Malaysian Bumiputera individual who is 18 years and above; and (ii) guardian from the above category applying for units as the guardian for a Malaysian



The investment manager of ASB 3 Didik is PNB.


The management company of ASB 3 Didik is ASNB, which is a wholly-owned subsidiary of PNB.


A summary of ASB 3 Didik’s results for the FYE 30 June 2016, 30 June 2017 and 30 June 2018is as follows:-

FYE 30 June2018

(RM’000)2017

(RM’000)2016

(RM’000)




There is no material exceptional item for the past 3 financial years up to the FYE 30 June 2018.


There is no statement of assets and liabilities published in the latest annual report of ASB 3 Didik for the FYE 30 June 2018. As at 30 June 2018, the total unit holders’ capital was RM5,845,500,000 comprising 5,845,500,000 units.

As at the LPD, there is no known material change in the financial position of ASB 3 Didik subsequent to the latest annual report of ASB 3 Didik for the FYE 30 June 2018.

131

ATTACHMENT VII – INFORMATION ON ASB 3 DIDIK (cont’d)

89


Based on the annual reports of ASB 3 Didik for the FYE 30 June 2016, 30 June 2017 and 30 June 2018, the financial statements have been prepared in accordance with approved Malaysian accounting standards and there was no audit qualification for ASB 3 Didik’s financial statements for the respective years under review.

There is no change in the accounting standards adopted by ASB 3 Didik which would result in a material variation to the comparable figures for the audited financial statements of ASB 3 Didik for the FYE 30 June 2016, 30 June 2017 and 30 June 2018.


132

ATTACHMENT VIII – INFORMATION ON ASB 2

90


ASB 2 is a unit trust fund constituted on 26 March 2014 and launched on 2 April 2014 under the management of PNB.

ASB 2 invests in a mixed asset portfolio within the approved investment limits of equities, variable and fixed income securities, money market instruments as well as other securities in Malaysia, and/or any eligible market as permitted in the deed of ASB 2.

2. UNIT HOLDERS






The investment manager of ASB 2 is PNB.


The management company of ASB 2 is ASNB, which is a wholly-owned subsidiary of PNB.


A summary of ASB 2’s results for the FYE 31 March 2016, 31 March 2017 and 31 March 2018is as follows:-

FYE 31 March2018

(RM’000)2017

(RM’000)2016

(RM’000)






There is no statement of assets and liabilities published in the latest annual report of ASB 2 for the FYE 31 March 2018. As at 31 March 2018, the total unit holders’ capital was RM9,353,550,000 comprising 9,353,550,000 units.

As at the LPD, there is no known material change in the financial position of ASB 2 subsequent to the latest annual report of ASB 2 for the FYE 31 March 2018.

133

ATTACHMENT VIII – INFORMATION ON ASB 2 (cont’d)

91


Based on the annual reports of ASB 2 for the FYE 31 March 2016, 31 March 2017 and 31 March 2018, the financial statements have been prepared in accordance with approved Malaysian accounting standards and there was no audit qualification for ASB 2’s financial statements for the respective years under review.

There is no change in the accounting standards adopted by ASB 2 which would result in a material variation to the comparable figures for the audited financial statements of ASB 2 for the FYE 31 March 2016, 31 March 2017 and 31 March 2018.


134

ATTACHMENT IX – INFORMATION ON ASN

92


ASN is a unit trust fund constituted on 14 April 1981 and launched on 20 April 1981 under the management of PNB.

ASN invests in a diversified portfolio of listed securities, primarily on Bursa Securities, unlisted securities, fixed income and money market instruments.

2. UNIT HOLDERS





The investment manager of ASN is PNB.


The management company of ASN is ASNB, which is a wholly-owned subsidiary of PNB.


A summary of ASN’s results for the FYE 31 December 2015, 31 December 2016 and 31 December 2017 as well as the 6-month financial period ended (“FPE”) 30 June 2018 is as follows:-

FPE 30 June FYE 31 December2018

(RM’000)2017

(RM’000)2016

(RM’000)2015

(RM’000)

Total investment income 9,341 68,883 36,692 32,962

Net (loss) / income before taxation / after taxation

(2,875) 45,814 16,155 11,477

Income distribution per unit (sen) - 3.65 5.00 6.10

There is no material exceptional item for the past 3 financial years up to the FYE 31 December 2017 and the 6-month FPE 30 June 2018.


135

ATTACHMENT IX – INFRMATION ON ASN (cont’d)

93


The statement of assets and liabilities of ASN based on its audited financial statements for the FYE 31 December 2017 and 6-month FPE 30 June 2018 is as follows:-

Audited as at Audited as at 31 December30 June 2018 2017 2016

(RM’000) (RM’000) (RM’000)

ASSETSInvestments carried at fair value through other comprehensive income

767,948 1,014,702 958,986

Investments carried at fair value through profit or loss

159,365 168,623 158,432

Deposits with financial institutions 312,498 288,109 173,247Tax recoverable 16,476 16,459 16,449Receivables 5,672 9,682 2,692Amounts due from stockbroker 22,707 - 33,372Amount due from PNB 341 - -Cash in bank 3 1,297 989TOTAL ASSETS 1,285,010 1,498,872 1,344,167

EQUITY AND LIABILITIESEQUITYUnit holders’ capital 1,356,918 1,389,400 1,364,379Reserves (79,241) 34,035 (131,796)Total equity 1,277,677 1,423,435 1,232,583

LIABILITIESDistribution payable - 69,423 92,855Amounts owing to manager 1,065 1,297 1,166Amount owing to PNB 1,921 - -Amounts owing to stockbroker - 1,263 14,815Payables 4,347 3,454 2,748Total liabilities 7,333 75,437 111,584TOTAL EQUITY AND LIABILITIES 1,285,010 1,498,872 1,344,167

As at the LPD, there is no known material change in the financial position of ASN subsequent to the latest audited financial statements of ASN for the 6-month FPE 30 June 2018.


Based on the annual reports of ASN for the FYE 31 December 2015, 31 December 2016 and 31 December 2017 as well as the audited financial statements of ASN for the 6-month FPE 30 June 2018, the financial statements have been prepared in accordance with approved Malaysian accounting standards and there was no audit qualification for ASN’s financial statements for the respective years under review.

There is no change in the accounting standards adopted by ASN which would result in a material variation to the comparable figures for the audited financial statements of ASN for the FYE 31 December 2015, 31 December 2016 and 31 December 2017 as well as the 6-month FPE 30 June 2018.


136

ATTACHMENT X – INFORMATION ON ASN EQUITY 2

94


ASN Equity 2 is a unit trust fund constituted on 8 June 1999 and launched on 9 June 1999 under the management of PNB.

ASN Equity 2 invests in a diversified portfolio of listed securities, primarily on Bursa Securities, unlisted securities, fixed income, and money market instruments.

2. UNIT HOLDERS





The investment manager of ASN Equity 2 is PNB.


The management company of ASN Equity 2 is ASNB, which is a wholly-owned subsidiary of PNB.


A summary of ASN Equity 2’s results for the FYE 30 June 2016, 30 June 2017 and 30 June 2018 is as follows:-

FYE 30 June2018

(RM’000)2017

(RM’000)2016

(RM’000)




There is no material exceptional item for the past 3 financial years up to the FYE 30 June 2018.


137

ATTACHMENT X – INFORMATION ON ASN EQUITY 2 (cont’d)

95


The statement of assets and liabilities of ASN Equity 2 based on its audited financial statements for the FYE 30 June 2018 is as follows:-

Audited as at 30 June2018 2017

(RM’000) (RM’000)


533,482 664,876

Investments carried at fair value through profit or loss 95,302 123,294Deposits with financial institutions 282,113 167,337Tax recoverable 631 597Receivables 3,324 1,841Amount due from stockbrokers 1,790 1,565Amount due from PNB 3,282 -Cash at bank 3 3TOTAL ASSETS 919,927 959,513

EQUITY AND LIABILITIESEQUITYUnit holders’ capital 841,555 825,672Reserves 30,447 84,881Total equity 872,002 910,553

LIABILITIESDistribution payable 46,884 45,864Amounts owing to manager 758 831Payables 283 329Amounts owing to stockbrokers - 1,936Total liabilities 47,925 48,960TOTAL EQUITY AND LIABILITIES 919,927 959,513

As at the LPD, there is no known material change in the financial position of ASN Equity 2 subsequent to the latest annual report of ASN Equity 2 for the FYE 30 June 2018.


Based on the annual reports of ASN Equity 2 for the FYE 30 June 2016, 30 June 2017 and 30 June 2018, the financial statements have been prepared in accordance with approved Malaysian accounting standards and there was no audit qualification for ASN Equity 2’s financial statements for the respective years under review.

There is no change in the accounting standards adopted by ASN Equity 2 which would result in a material variation to the comparable figures for the audited financial statements of ASN Equity 2 for the FYE 30 June 2016, 30 June 2017 and 30 June 2018.


138

ATTACHMENT XI – INFORMATION ON ASN IMBANG 1

96


ASN Imbang 1 is a unit trust fund constituted on 24 September 2001 and launched on 16 October 2001 under the management of PNB.

ASN Imbang 1 invests in a diversified portfolio of listed securities, primarily on Bursa Securities, unlisted securities, fixed income and money market instruments.

2. UNIT HOLDERS





The investment manager of ASN Imbang 1 is PNB.


The management company of ASN Imbang 1 is ASNB, which is a wholly-owned subsidiary of PNB.


A summary of ASN Imbang 1’s results for the FYE 30 November 2015, 30 November 2016 and30 November 2017 as well as the 6-month FPE 31 May 2018 is as follows:-

FPE 31 May 2018

(RM’000)

FYE 30 November2017

(RM’000)2016

(RM’000)2015

(RM’000)

Total investment income 14,955 48,525 42,651 48,874

Net income before taxation / after taxation

6,105 30,967 25,597 34,034

Income distribution per unit (sen)

- 5.00 6.00 6.20

There is no material exceptional item for the past 3 financial years up to the FYE 30 November 2017 and the 6-month FPE 31 May 2018.


139

ATTACHMENT XI – INFORMATION ON ASN IMBANG 1 (cont’d)

97


The statement of assets and liabilities of ASN Imbang 1 based on its audited financial statements for the FYE 30 November 2017 and 6-month FPE 31 May 2018 is as follows:-

Audited as at Audited as at 30 November31 May 2018 2017 2016

(RM’000) (RM’000) (RM’000)


600,888 657,991 745,653


421,205 407,407 245,901

Deposits with financial institutions 275,615 313,664 267,794Tax recoverable 637 615 475Receivables 6,101 7,761 12,281Amounts due from stockbroker - 30,741 -Amount due from PNB - - 2,932Cash in bank 43 3 211TOTAL ASSETS 1,304,489 1,418,182 1,275,247

EQUITY AND LIABILITIESEQUITYUnit holders’ capital 1,353,663 1,367,677 1,254,732Reserves (57,455) (30,863) (51,682)Total equity 1,296,208 1,336,814 1,203,050

LIABILITIESDistribution payable - 64,766 70,783Amounts owing to stockbroker 4,534 15,174 -Amounts owing to PNB 2,269 - -Amounts owing to manager 1,198 1,189 1,107Payables 280 239 307Total liabilities 8,281 81,368 72,197TOTAL EQUITY AND LIABILITIES 1,304,489 1,418,182 1,275,247

As at the LPD, there is no known material change in the financial position of ASN Imbang 1 subsequent to the latest audited financial statements of ASN Imbang 1 for the 6-month FPE 31 May 2018.


Based on the annual reports of ASN Imbang 1 for the FYE 30 November 2015, 30 November 2016 and 30 November 2017 as well as the audited financial statements of ASN Imbang 1 for the 6-month FPE 31 May 2018, the financial statements have been prepared in accordance with approved Malaysian accounting standards and there was no audit qualification for ASN Imbang 1’s financial statements for the respective years under review.

There is no change in the accounting standards adopted by ASN Imbang 1 which would result in a material variation to the comparable figures for the audited financial statements of ASN Imbang 1 for the FYE 30 November 2015, 30 November 2016 and 30 November 2017 as well as the 6-month FPE 31 May 2018.

140

ATTACHMENT XII – INFORMATION ON ASN UMBRELLA (ASN EQUITY 3, ASN IMBANG 2 AND ASN SARA 1)

98


ASN Umbrella is a unit trust fund constituted on 11 March 2003 and launched on 17 March 2003 under the management of PNB. ASN Umbrella is the umbrella fund for (i) ASN Umbrella – ASN Equity 3, (ii) ASN Umbrella – ASN Imbang 2 and (iii) ASN Umbrella – ASN Sara 1.

These funds invest in a diversified portfolio of listed securities, primarily on Bursa Securities, unlisted securities, fixed income and money market instruments.

2. UNIT HOLDERS

Eligible investors in these funds include:-




The investment manager of these funds is PNB.


The management company of these funds is ASNB, which is a wholly-owned subsidiary of PNB.


A summary of the results for the FYE 31 March 2016, 31 March 2017 and 31 March 2018 is as follows:-

(i) ASN Umbrella – ASN Equity 3

FYE 31 March2018

(RM’000)2017

(RM’000)2016

(RM’000)



55,769 38,727 19,667


(ii) ASN Umbrella – ASN Imbang 2

FYE 31 March2018

(RM’000)2017

(RM’000)2016

(RM’000)



33,784 30,353 11,492



98




2. UNIT HOLDERS











FYE 31 March2018

(RM’000)2017

(RM’000)2016

(RM’000)



55,769 38,727 19,667



FYE 31 March2018

(RM’000)2017

(RM’000)2016

(RM’000)



33,784 30,353 11,492



98




2. UNIT HOLDERS











FYE 31 March2018

(RM’000)2017

(RM’000)2016

(RM’000)



55,769 38,727 19,667



FYE 31 March2018

(RM’000)2017

(RM’000)2016

(RM’000)



33,784 30,353 11,492


141

ATTACHMENT XII – INFORMATION ON ASN UMBRELLA (ASN EQUITY 3, ASN IMBANG 2 AND ASN SARA 1) (cont’d)

99

(iii) ASN Umbrella – ASN Sara 1

FYE 31 March2018

(RM’000)2017

(RM’000)2016

(RM’000)



26,310 12,881 6,508




The statements of assets and liabilities of the funds based on the audited financial statements of ASN Umbrella for the FYE 31 March 2018 are as follows:-

(i) ASN Equity 3

As at 31 March2018 2017

(RM’000) (RM’000)


1,362,460 1,075,447


244,341 252,323

Deposits with financial institutions 457,076 431,716Tax recoverable 958 559Receivables 8,110 7,016Amounts due from stockbroker - 78,681Cash in bank 3 3TOTAL ASSETS 2,072,948 1,845,745

EQUITY AND LIABILITIESEQUITYUnit holders’ capital 1,887,939 1,709,488Reserve 77,820 17,592Total equity 1,965,759 1,727,080

LIABILITIESDistribution payable 99,427 73,521Amounts owing to stockbroker 5,649 43,298Amounts owing to manager 1,838 1,578Payables 275 268Total liabilities 107,189 118,665TOTAL EQUITY AND LIABILITIES 2,072,948 1,845,745

142


100

(ii) ASN Imbang 2

As at 31 March2018 2017

(RM’000) (RM’000)


571,130 437,858


378,661 194,713

Deposits with financial institutions 211,095 219,861Tax recoverable 541 418Receivables 5,741 5,117Amounts due from stockbroker 2,111 32,422Cash in bank 3 3TOTAL ASSETS 1,169,282 890,392

EQUITY AND LIABILITIESEQUITYUnit holders’ capital 1,106,032 866,000Reserve 6,147 (16,548)Total equity 1,112,179 849,452

LIABILITIESDistribution payable 54,493 39,797Amounts owing to stockbroker 1,206 -Amounts owing to manager 1,039 785Payables 365 358Total liabilities 57,103 40,940TOTAL EQUITY AND LIABILITIES 1,169,282 890,392

(iii) ASN Sara 1

As at 31 March2018 2017

(RM’000) (RM’000)


441,037 264,943


500,206 106,053


EQUITY AND LIABILITIESEQUITYUnit holders’ capital 1,246,470 528,997Reserves 33,043 7,588Total equity 1,279,513 536,585

LIABILITIESDistribution payable 57,640 24,693Amounts owing to stockbroker 1,425 541Amounts owing to manager 1,179 486Payables 151 127Total liabilities 60,395 25,847TOTAL EQUITY AND LIABILITIES 1,339,908 562,432


100

(ii) ASN Imbang 2

As at 31 March2018 2017

(RM’000) (RM’000)


571,130 437,858


378,661 194,713




(iii) ASN Sara 1

As at 31 March2018 2017

(RM’000) (RM’000)


441,037 264,943


500,206 106,053





100

(ii) ASN Imbang 2

As at 31 March2018 2017

(RM’000) (RM’000)


571,130 437,858


378,661 194,713




(iii) ASN Sara 1

As at 31 March2018 2017

(RM’000) (RM’000)


441,037 264,943


500,206 106,053





100

(ii) ASN Imbang 2

As at 31 March2018 2017

(RM’000) (RM’000)


571,130 437,858


378,661 194,713




(iii) ASN Sara 1

As at 31 March2018 2017

(RM’000) (RM’000)


441,037 264,943


500,206 106,053





100

(ii) ASN Imbang 2

As at 31 March2018 2017

(RM’000) (RM’000)


571,130 437,858


378,661 194,713




(iii) ASN Sara 1

As at 31 March2018 2017

(RM’000) (RM’000)


441,037 264,943


500,206 106,053




143


101

As at the LPD, there is no known material change in the financial position of the funds subsequent to the latest annual report of ASN Umbrella for the FYE 31 March 2018.


Based on the annual reports of ASN Umbrella for the FYE 31 March 2016, 31 March 2017 and 31 March 2018, the financial statements have been prepared in accordance with approved Malaysian accounting standards and there was no audit qualification for ASN Umbrella’s financial statements for the respective years under review.

There is no change in the accounting standards adopted by ASN Umbrella which would result in a material variation to the comparable figures for the audited financial statements of ASN Umbrella for the FYE 31 March 2016, 31 March 2017 and 31 March 2018.


144

ATTACHMENT XIII – INFORMATION ON ASN EQUITY 5

102


ASN Equity 5 is a unit trust fund constituted on 17 August 2018 and commenced on 24 September 2018 under the management of PNB.

ASN Equity 5 invests in a diversified portfolio of listed securities, primarily on Bursa Securities, unlisted securities, fixed income securities and money market instruments.

2. UNIT HOLDERS





The investment manager of ASN Equity 5 is PNB.


The management company of ASN Equity 5 is ASNB, which is a wholly-owned subsidiary of PNB.


There is no profit and dividend record for ASN Equity 5 as the commencement date of the Fund was 24 September 2018.


There is no statement of assets and liabilities for ASN Equity 5 as the commencement date of the Fund was 24 September 2018.


There is no audited financial statements for ASN Equity 5 as the commencement date of the Fund was 24 September 2018.


145

ATTACHMENT XIV – INFORMATION ON ASN SARA 2

103


ASN Sara 2 is a unit trust fund constituted on 17 August 2018 and commenced on 24 September 2018 under the management of PNB.

ASN Sara 2 invests in fixed income securities and liquid assets, equities and other investments as permitted by the deed of ASN Sara 2.

2. UNIT HOLDERS





The investment manager of ASN Sara 2 is PNB.


The management company of ASN Sara 2 is ASNB, which is a wholly-owned subsidiary of PNB.


There is no profit and dividend record for ASN Sara 2 as the commencement date of the Fund was 24 September 2018.


There is no statement of assets and liabilities for ASN Sara 2 as the commencement date of the Fund was 24 September 2018.


There is no audited financial statements for ASN Sara 2 as the commencement date of the Fund was 24 September 2018.


146

ATTACHMENT XV – INFORMATION ON BUMIPUTERA WEALTH FUND

104

Bumiputera Wealth Fund is a pool of money managed by PNB for the purpose of promoting and enhancing Bumiputera wealth in the economy in general, and specifically for the benefit of Bumiputera unit holders of the unit trust funds managed by PNB starting from 19 December 2014.

Bumiputera Wealth Fund invests in equity and money market.


147

ATTACHMENT XVI – FURTHER INFORMATION

105

1. DISCLOSURE OF INTERESTS AND DEALINGS IN SHARES

1.1 By the PNB Group

(i) Interests in SEB

Save as disclosed below, the PNB Group does not have any interest (whether direct or indirect) in any voting shares or convertible securities of SEB as at the LPD:-

Name


Shares(‘000) %(1)


PNB 19,641 0.33 - -ASB 387,000 6.46 - -ASM 2 Wawasan 83,000 1.39 - -ASM 93,154 1.55 - -ASM 3 65,456 1.09 - -ASB 3 Didik 37,554 0.63 - -ASB 2 9,000 0.15 - -ASN 7,741 0.13 - -ASN Equity 2 3,674 0.06 - -ASN Imbang 1 7,390 0.12 - -ASN Umbrella – ASN Equity 3 9,533 0.16 - -ASN Umbrella – ASN Imbang 2 4,762 0.08 - -ASN Umbrella – ASN Sara 1 - - - -ASN Equity 5 - - - -ASN Sara 2 - - - -Bumiputera Wealth Fund 500 0.01 - -

Note:- (1) Computed based on the total number of 5,992,155,087 SEB Shares as at the

LPD.

(ii) Dealings in the securities of SEB

Save as disclosed below, the PNB Group has not dealt (directly or indirectly)in any voting shares or convertible securities of SEB during the period commencing 6 months before the announcement of the Proposals on 24 August 2018 and ending on the LPD.

Name of transacting party

Date oftransaction

Nature oftransaction

No. of SEB Shares

Average transacted price

(RM)

ASB

15.03.2018 Disposal 3,019,800 0.47716.03.2018 Disposal 3,000,000 0.49219.03.2018 Acquisition 10,000,000 0.49522.03.2018 Disposal 5,000,000 0.54026.03.2018 Disposal 10,000,000 0.560

ASM 19.03.2018 Disposal 10,000,000 0.49526.03.2018 Acquisition 10,000,000 0.560

ASB 213.03.2018 Disposal 2,000,000 0.45214.03.2018 Disposal 2,000,000 0.42226.03.2018 Disposal 1,500,000 0.563

148

ATTACHMENT XVI – FURTHER INFORMATION (cont’d)

106

Name of transacting party

Date oftransaction

Nature oftransaction

No. of SEB Shares

Average transacted price

(RM)

ASN 27.03.2018 Disposal 1,600,000 0.557

ASN Equity 2 22.03.2018 Disposal 10,000,000 0.540

ASN Equity 3

13.03.2018 Disposal 500,000 0.45214.03.2018 Disposal 250,000 0.43015.03.2018 Disposal 2,500,000 0.47726.03.2018 Disposal 300,000 0.56308.05.2018 Disposal 1,000,000 0.669

1.2 By the directors of the PNB Group


The directors of the PNB Group do not have any interest (whether direct or indirect) in any voting shares or convertible securities of SEB as at the LPD.


The directors of the PNB Group have not dealt (directly or indirectly) in any voting shares or convertible securities of SEB during the period commencing 6 months before the announcement of the Proposals on 24 August 2018 and ending on the LPD.

1.3 By the persons who have irrevocably committed themselves to vote in favour or against the Proposals

As at the LPD, there is no person who has irrevocably committed himself to vote in favour or against the Proposals.

1.4 By the persons with whom the PNB Group or any persons acting in concert with them has borrowed or lent

As at the LPD, there is no person with whom the PNB Group or any persons acting in concert with them has borrowed or lent any voting shares or convertible securities of SEB.

1.5 By the persons with whom the PNB Group or any persons acting in concert with them has any arrangement

As at the LPD, there is no person with whom the PNB Group or any persons acting in concert with them has entered into any arrangement, including any arrangement involving rights over SEB Shares, any indemnity arrangement, and any agreement or understanding, formal or informal, of whatever nature, relating to SEB Shares which may be an inducement to deal or to refrain from dealing.

1.6 By SEB

(i) Dealings in its own securities

SEB has not dealt (directly or indirectly) in any of its own voting shares or convertible securities during the period commencing 6 months before the announcement of the Proposals on 24 August 2018 and ending on the LPD.

149


107

(ii) Interests in the PNB Group

SEB does not have any interest (whether direct or indirect) in any voting shares or convertible securities of the PNB Group as at the LPD.

(iii) Dealings in the securities of the PNB Group

SEB has not dealt (directly or indirectly) in any voting shares or convertible securities of the PNB Group during the period commencing 6 months before the announcement of the Proposals on 24 August 2018 and ending on the LPD.

1.7 By the Directors of SEB


Save as disclosed below, the Directors of SEB do not have any interest (whether direct or indirect) in any voting shares or convertible securities of SEB as at the LPD:-

Name


Shares(‘000) %(1)


TSS 37,812 0.63 (2)1,007,545 16.81

Tan Sri Datuk Amar (Dr) Hamid Bugo 256 (3)- (4)275 (3)-

DSS 506 0.01 (2)1,007,545 16.81

Mohamed Rashdi Mohamed Ghazalli

98 (3)- (5)49 (3)-

Datuk Ramlan Abdul Malek 486 0.01 - -

Notes:- (1) Based on 5,992,155,087 SEB Shares as at the LPD. (2) Deemed interested by virtue of being a substantial shareholder of SHSB

pursuant to Section 8 of the Act. SHSB is a substantial shareholder of STSB, Sapura Resources Berhad, Sapura Capital Sdn Bhd, Indera Permai Sdn Bhd and Jurudata Sdn Bhd.

(3) Negligible. (4) Deemed interested by virtue of the shareholding held by him and his children

in Sego Holdings Sdn Bhd, which in turn holds 50% in Santubong Properties Sdn Bhd, pursuant to Section 8 of the Act.



The Directors of SEB have not dealt (directly or indirectly) in any voting shares or convertible securities of SEB during the period commencing 6 months before the announcement of the Proposals on 24 August 2018 and ending on the LPD.

(iii) Interests in the PNB Group

The Directors of SEB do not have any interest (whether direct or indirect) in any voting shares or convertible securities of the PNB Group as at the LPD.

150


108

(iv) Dealings in the securities of the PNB Group

The Directors of SEB have not dealt (directly or indirectly) in any voting shares or convertible securities of the PNB Group during the period commencing 6 months before the announcement of the Proposals on 24 August 2018 and ending on the LPD.

1.8 By the persons with whom SEB or any persons acting in concert with it has borrowed or lent

As at the LPD, there is no person with whom SEB or any persons acting in concert with it has borrowed or lent any voting shares or convertible securities of SEB.

1.9 By the persons with whom SEB or any persons acting in concert with it has any arrangement

As at the LPD, there is no person with whom SEB or any persons acting in concert with it has entered into any arrangement, including any arrangement involving rights over SEB Shares, any indemnity arrangement, and any agreement or understanding, formal or informal, of whatever nature, relating to SEB Shares which may be an inducement to deal or to refrain from dealing.

1.10 By Mercury Securities and funds whose investments are managed by Mercury Securities on a discretionary basis (“Discretionary Funds”)

Mercury Securities and its Discretionary Funds do not have any interest, whether direct or indirect, in any voting shares or convertible securities of SEB as at the LPD.

2. ARRANGEMENT AFFECTING DIRECTORS

(i) As at the LPD, no payment or other benefit will be made or given to any Director of SEB as compensation for loss of office or otherwise in connection with the Proposals.

(ii) As at the LPD, there is no agreement or arrangement between any Director of SEB and any other person which is conditional on or dependent upon the outcome of the Proposals or otherwise connected with the outcome of the Proposals.

(iii) As at the LPD, the PNB Group has not entered into any material contract in which any Director of SEB has a material personal interest.

(iv) As at the LPD, there is no agreement, arrangement or understanding existing between the PNB Group and any of the Directors or recent Directors of SEB, holders of voting shares or voting rights or recent holders of voting shares or voting rights of SEB having any connection with or dependence upon the Proposals.

3. SERVICE CONTRACTS

As at the LPD, the SEB Group does not have any service contracts with any Directors or proposed Directors of SEB Group, which have been entered into or amended within 6 months before the announcement of the Proposals on 24 August 2018 or which are fixed term contracts with more than 12 months to run.

For the purpose of this section, the term “service contracts” excludes those expiring or determinable by the employing company without payment of compensation within 12 months from the date of this IAL.

151

APPENDIX I

SALIENT TERMS OF THE WARRANTS

137

Issue size : Up to 998,692,515 Warrants.

Issue price : The Warrants are to be issued free together with the Rights Shares.

Issue Date : The date on which the Warrants are issued and allotted.

Form and denomination : The Warrants, which are issued with the Rights Shares, are immediately detached upon issuance and will be separately traded on Bursa Securities. The Warrants will be issued in registered form and constituted by the Deed Poll.

Basis of allotment : One (1) Warrant for every ten (10) Rights Shares subscribed by the Entitled Shareholders.

Expiry Date : The day falling immediately before the seventh (7th) anniversary of the Issue Date and if such date is not a Market Day, then on the preceding Market Day.

Exercise Period : The Warrants may be exercised at any time within a period of seven (7) years commencing from and including the Issue Date and ending at 5.00 p.m. on the Expiry Date. Any Warrants not exercised during the Exercise Period will thereafter lapse and cease to be valid.

Exercise Price : RM0.49 per Warrant.

Exercise Rights : Subject to the provisions of the Deed Poll, each Warrant shall entitle the registered holder to subscribe for one (1) new SEB Share at the Exercise Price during the Exercise Period.

Mode of exercise : The Warrant holders shall pay cash for the Exercise Price when exercising the Warrants for new SEB Shares.

Rights of Warrant holders

: The Warrant holders are not entitled to any voting rights or participate in any distribution and/or offer of further securities in our Company until and unless such Warrant holders are issued with the Exercised Shares.

Ranking of the Warrants : The Warrants shall as between the Warrant holders rank equally in all respect.

Ranking of the Exercise Shares

: The Exercised Shares shall, upon allotment and issue, rank equally in all respects with the then issued SEB Shares including the entitlements to dividends, rights, allotments or other distributions, except that they shall not be entitled to any dividends, rights, allotments and/or other distributions, of which the entitlement date is before the date of allotment of such Exercised Shares.

Adjustments in the Exercise Price and/or number of Warrants

: Subject to the provisions of the Deed Poll, the Exercise Price and/or number of Warrants in issue may from time to time be adjusted,calculated or determined by our Board, in consultation with its professional advisers, in the event of alteration to the share capital of our Company, a capital distribution by our Company or certain issue of shares or convertible securities by our Company in accordance with the provisions of the Deed Poll.

Transferability : The Warrants shall be transferable in the manner provided under the Securities Industry (Central Depositories) Act 1991 and the rules of Bursa Depository.

152

APPENDIX I

SALIENT TERMS OF THE WARRANTS (Cont’d)

138

Board lot : For the purpose of trading on Bursa Securities, a board lot of Warrants shall comprise 100 units of Warrants.

Amendments to the rights of the Warrant holders

: Subject to the provisions of the Deed Poll, no amendment or addition may be made to the provisions of the Deed Poll without the sanction by a special resolution of the holders of the Warrants unless the amendments or additions:

(a) are required to correct any typographical errors; or

(b) are relating to purely administrative matters; or

(c) to comply with mandatory provisions of the law.

Rights in the event of winding-up, compromise or arrangement and consolidation, amalgamation and merger

: Where a resolution has been passed for a member’s voluntary winding-up of our Company, or where there is a compromise or arrangement whether or not for the purpose of or in connection with a scheme for the reconstruction of our Company or the amalgamation of our Company with one (1) or more companies, then:

(a) if such winding-up, compromise or arrangement has been approved by a special resolution of the holder of the Warrants or some person designated by them for such purpose by special resolution, the terms of such winding-up, compromise or arrangement shall be binding on all the Warrant holders; and

(b) in any other case, every Warrant holder shall be entitled upon and subject to the provisions of the Deed Poll at any time within six (6) weeks after the passing of such resolution for a member’s voluntary winding-up of our Company or within six (6) weeks after the granting of the court order approving the compromise or arrangement (other than a consolidation, amalgamation or merger in which our Company is the continuing corporation), by the irrevocable surrender of his/her Warrants to our Company, elect to be treated as if he/she had immediately prior to the commencement of such winding-up, compromise or arrangement, exercised the Exercise Rights represented by such Warrants to the extent specified in the relevant exercise forms and be entitled to receive out of the assets of our Company which would be available in liquidation as if he/she had on such date been the holder of the Exercised Shares to which he/she would have been entitled to pursuant to such exercise.

Listing status : The Warrants will be listed and quoted on the Main Market of Bursa Securities.

Governing law : Laws of Malaysia.

153

APPENDIX II

SALIENT TERMS OF THE RCPS-i

139

Issue size : Up to 2,396,862,035 RCPS-i.

RCPS-i Issue Price : RM0.41 per RCPS-i.

Issue Date : A date to be determined by our Board.

Entitlement basis : Two (2) RCPS-i for every five (5) SEB Shares held on Entitlement Date.

Form and constitution : The RCPS-i will be issued in registered form and constituted by our Constitution.

Board lot : For the purposes of trading on the Bursa Securities, a board lot of RCPS-i shall comprise 100 RCPS-i.

Tenure : Five (5) years from the Issue Date.

Maturity Date : The day immediately preceding the fifth (5th) anniversary from the Issue Date.

Shariah Compliance : The Shariah Adviser appointed for the Proposed Rights Issue of RCPS-i had pronounced that the RCPS-i is in compliance with the principles of Shariah. Please refer to Appendix VI for the Shariah Pronouncement Letter.

Dividend rate : (a) The RCPS-i shall carry the right to receive preferential dividends, out of the distributable profits of our Company earned from the first day of the calendar month following the Issue Date (“Profits”), when declared and approved by our Board, at the expected preferential dividend rate of five percent (5%) per annum (“Expected Preferential Dividend Rate”).

(b) Subject to the availability of Profits, the preferential dividends shall be distributable semi-annually (save in respect of the firstdistribution), with the RCPS-i holders being entitled to the first distribution no later than six (6) months following the Issue Date, and subsequently, at successive intervals of every six (6) months thereafter (each of the aforementioned dates shall be referred to as "Preferential Dividend Entitlement Date").

(c) The maximum amount of preferential dividends that can be declared and paid on each Preferential Dividend Entitlement Date (“Expected Preferential Dividend Amount”) shall be capped at such Expected Preferential Dividend Rate unless otherwise decided by our Board.

(d) On any Preferential Dividend Entitlement Date:

(i) in the event that the Profits are lower than the Expected Preferential Dividend Amount and our Company does not declare the preferential dividends up to the Expected Preferential Dividend Amount (in whole or in part):

154

APPENDIX II

SALIENT TERMS OF THE RCPS-i (Cont’d)

140

(aa) our Company may, at its discretion, declare and pay any amount of preferential dividends up to an amount equal to the Profits as at such Preferential Dividend Entitlement Date. (The amount of Profits declared as preferential dividends by our Company on a particular Preferential Dividend Entitlement Date, if any, shall be referred to as "Declared Sum"); and

(bb) the amount equivalent to the difference between: (A) the Profits as at such Preferential Dividend Entitlement Date; and (B) Declared Sum, shall be cumulative ("Deferred Dividends 1"), so long as the RCPS-i remains unredeemed. In this instance, the amount equivalent to the difference between: (A) the Expected Preferential Dividend Amount; and (B) the Profits as at such Preferential Dividend EntitlementDate, shall not be cumulative; and

(ii) in the event that the Profits are more than the Expected Preferential Dividend Amount and our Company does not declare the preferential dividends up to the Expected Preferential Dividend Amount (in whole or in part):

(aa) the amount equivalent to the difference between: (A) the Expected Preferential Dividend Amount; and (B) the Declared Sum, shall be cumulative ("Deferred Dividends 2"), so long as the RCPS-i remains unredeemed.

(e) Deferred Dividends 1 and Deferred Dividends 2 (as the case may be) (collectively, "Deferred Dividends") may be declared and/or paid, at the discretion of our Company, on any subsequent Preferential Dividend Entitlement Date, provided that the Cumulative Condition is fulfilled on such Preferential Dividend Entitlement Date.

"Cumulative Condition" of the RCPS-i means on any particular Preferential Dividend Entitlement Date, our Company:

(i) has sufficient Profits that is at least equivalent to the aggregate of: (A) the Declared Sum; and (B) any Deferred Dividends accumulated as at and on such Preferential Dividend Entitlement Date;

(ii) has maintained books and records that evidence our Company having Profits that is at least equivalent to the aggregate of: (A) the Declared Sum; and (B) any Deferred Dividends accumulated as at and on such Preferential Dividend Entitlement Date; and

(iii) makes an announcement on the Main Market of Bursa Securities that such amount of Deferred Dividends on such Preferential Dividend Entitlement Date shall be cumulative.

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(f) The Deferred Dividends shall not be payable to the RCPS-i holders if our Company has not declared it as a preferential dividend. For clarity, the Deferred Dividends that are not declared will not be payable in the following circumstances:

(i) upon the winding-up, liquidation or dissolution of our Company. Accordingly, the RCPS-i holders shall (in and for compliance with Shariah, and by the decision of our Board at the relevant time on their behalf) waive all Deferred Dividends that our Company has not declared; and

(ii) upon the RCPS-i holders converting the RCPS-i to SEBShares. Accordingly, the RCPS-i holders shall (in and for compliance with Shariah) waive all Deferred Dividends that our Company has not declared.

(g) Where there are no Profits available for the declaration and payment of dividends (in accordance with our Constitution and the Act), our Company shall have no obligation to declare or distribute any preferential dividends on the relevant Preferential Dividend Entitlement Date. Such preferential dividends shall not be cumulative.

(h) Each RCPS-i holder shall cease to receive any preferential dividends from and including the date the RCPS-i is converted into new SEB Shares save for preferential dividends declared and unpaid (including Deferred Dividends) up to the date of the conversion.

(i) By subscribing to the RCPS-i, the RCPS-i holders agree (in and for compliance with Shariah) to waive its right to receive any distribution of profit with, such waiver to be decided by our Board at the relevant time on behalf of the RCPS-i holders.

Conversion rights : The RCPS-i shall be converted into new SEB Shares on the Maturity Date without the payment of any consideration (cash or otherwise) and in accordance with the Conversion Ratio.

Conversion Ratio : The conversion ratio shall be one (1) new SEB Share for one (1) RCPS-i held. If the conversion results in a fractional entitlement to new SEB Shares, such fractional entitlement shall be disregarded and no refund or credit, whether in the form of RCPS-i, cash or otherwise, shall be given in respect of the disregarded fractional entitlement.

The Conversion Ratio shall be subject to adjustments from time to time, at the determination of our Board, in the event of any alteration to the share capital of SEB, whether by way of rights issue, capitalisation issue, consolidation of shares, subdivision of shares or reduction of capital howsoever being effected, in accordance with the provisions of our Constitution. Our Company shall give notice in writing to the RCPS-i holders of its intention to make such adjustments to the Conversion Ratio.

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Participation in profits : Subject to the rights to the preferential dividends and any additional preferential dividends, the RCPS-i holders shall not be entitled to participate in the surplus profits (if any) remaining at such time after the payment of the preferential dividends and such additional preferential dividends (if any).

Redemption : (a) Our Company may at any time after the Issue Date, at its discretion, redeem wholly or in part on a pro rata basis the outstanding RCPS-i by giving not less than thirty (30) days’ notice in writing to the RCPS-i holders of its intention to do so, subject to compliance with the Act, including where such RCPS-i is intended to be redeemed out of the capital of our Company, such notice of redemption shall be subject to all directors of our Company having made a solvency statement in relation to such redemption in accordance with the provisions of the Act. The redemption of the RCPS-i shall take effect on the 30th day from the date of the notice or such other later date as may be specified in the notice ("Redemption Date"). The Redemption Date and book closure date to be used to determine the RCPS-i holders who are entitled to receive the redemption payment shall be stated in the notice.

(b) On the Redemption Date, our Company shall redeem, wholly or in part on a pro rata basis, the outstanding RCPS-i in cash at a redemption price, which shall be the aggregate of: (i) the Issue Price of the RCPS-i; (ii) any preferential dividends declared but unpaid as at the Redemption Date; (iii) any Deferred Dividends as at the Redemption Date; and (iv) a redemption adjustment that yields an effective return of ten percent (10%) per annum,computed based on the internal rate of return formula, from the Issue Date and up to the Redemption Date, out of the distributable profits of our Company and after taking into account (i), (ii) and (iii) above and all Preferential Dividend declared and paid up to the Redemption Date ("Redemption Price").

(c) Upon redemption of the RCPS-i, the RCPS-i holders shall (in and for compliance with Shariah) waive their rights to receive any Profit that has not been declared as preferential dividend by ourCompany and which do not form any part of the Deferred Dividends from the period beginning on the last dividend declaration date preceding the Redemption Date up to the Redemption Date. By subscribing to the RCPS-i, the RCPS-iholders agree (in and for compliance with Shariah) to this waiver with such waiver to be decided by our Board at the point of redemption on their behalf.

Restrictions on payment of dividends to SEB Shares

: (a) So long as any RCPS-i remains unredeemed, and in the event that dividends are declared and the preferential treatment is approved by the Board on the day of the dividend declaration, the Company shall not pay or distribute any dividend on SEB Shares, unless the preferential dividend payable on the RCPS-i for the period immediately preceding such ordinary share dividend and any preferential dividends declared but unpaid or Deferred Dividends, has been paid or otherwise provided for in full.

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(b) In the event that dividends are declared, and subject to the Board approving the payment and affirming the priority of payment, the ordinary shareholders shall waive their right to dividend payment, unless and until the Company has paid such preferential dividends declared but unpaid or Deferred Dividend to the RCPS-i holders. For avoidance of doubt, it is agreed that the passing of the resolution at the EGM of the ordinary shareholders to amend the Constitution (embedding the rights of the RCPS-i holders), shall represent their agreement in and for compliance with Shariah, for the priority of distribution (of dividends) to be decided by the Board at the point of distribution on their behalf.

Rights to receive notices, reports, and audited financial statements, andattend meetings and voting rights

: The RCPS-i holders shall be entitled to the same rights as ourCompany’s ordinary shareholders as regards to the receipt of notices (including that of general meetings), reports and audited financial statements, to attend meetings and to receive shareholders’ resolutions in writing, but shall not be entitled to vote or approve any shareholders’ resolution or vote at any general meeting, save and except in respect of any resolution made:

(a) when the preferential dividends or any part thereof is in arrears and unpaid for more than six (6) months;

(b) on a proposal to reduce the share capital of SEB;

(c) on a proposal for the disposal of substantially the whole of ourCompany’s property, business and undertaking;

(d) on a proposal to wind-up our Company;

(e) during the winding-up of our Company; or

(f) on any proposal that affects the rights and privileges attached to the RCPS-i, including the amendments to our Constitution.

In any of the aforesaid circumstances, each RCPS-i holder shall be entitled to vote at all general meetings of the members of its class, and on a poll at any such general meetings to one (1) vote for each RCPS-i held.

Ranking of the RCPS-i : As at the LPD, our Company has no other preference shares in issue.

The RCPS-i shall rank equally amongst themselves, and will rank ahead in point of priority to the holders of the SEB Shares and all other classes of shares (if any) in our Company, in respect of payment out of the assets of our Company upon any liquidation, dissolution or winding-up of our Company, provided always that our Board approves such payment of dividends and payment out of the assets of ourCompany on this basis and further affirms the priority of payment to the holders of the RCPS-i.

The RCPS-i shall rank subordinated to all our Company’s creditors in respect of payment of debt and payments out of assets of ourCompany upon liquidation, dissolution, or winding-up of our Company.

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Our Company shall not issue any preference shares (other than additional RCPS-i) which rank equally with or in priority to, the RCPS-i unless the issue of such securities has first been approved by the RCPS-i holders by way of an ordinary resolution of such holders.

Ranking of the Conversion Shares

: The Conversion Shares will, upon allotment and issue, rank equally in all respects with the then issued SEB Shares including the entitlements to dividends, rights, allotments or other distributions, except that they will not be entitled to any dividends, rights, allotments and/or other distributions of which the entitlement date is before the date of allotment of the Conversion Shares.

Rights in the event of winding-up, dissolution or liquidation

(a) On a return of capital on the dissolution, winding-up or liquidation of our Company, the RCPS-i holders shall have, in priority to the holders of ordinary shares and all other classes of shares (if any) in our Company, the right to payment of: (i) all capital paid up on the RCPS-i; and (ii) any preferential dividends declared but unpaid, but shall have no right to the residue (if any) of such surplus assets that shall remain after payment of the capital paid up on all other classes of shares in our Company.

(b) Subject to the approval of our Board for the distribution, the holdersof ordinary shares and all other classes of shares (if any) in our Company shall waive their right to receive proceeds from liquidation, dissolution or winding-up for the benefit of the RCPS-iholders until the RCPS-i holders have received their payment in full on all capital paid up on the RCPS-i by the respective holder, and any preferential dividends declared but unpaid. For avoidance of doubt, it is agreed that the passing of a resolution at an EGM of the ordinary shareholders to amend the Constitution (embedding the rights of the RCPS-i holders), shall represent their agreement (in and for compliance with Shariah) for the priority of distribution (of assets upon the liquidation, dissolution or winding-up of our Company) to be decided by our Board at the point of distribution on their behalf.

(c) Our Company shall pay in cash and in full, the amount which shall be equivalent to: (i) all the capital paid up on the RCPS-i by the respective holder; and (ii) any preferential dividends declared but unpaid upon liquidation, dissolution or winding-up of our Company, out of the proceeds of liquidation of the assets of our Company.

(d) By subscribing to the RCPS-i, the RCPS-i holders agree (in and for compliance with Shariah) to waive any Deferred Dividends that have not been declared as preferential dividends by our Company up to the point of liquidation, dissolution or winding-up of our Company, with such waiver to be decided by our Board at the relevant time on their behalf.

Transferability : The RCPS-i shall be transferable, subject however to the applicable laws, regulations and rules that would apply to the securities of ourCompany.

Listing status : The RCPS-i and the Conversion Shares will be listed and quoted on the Main Market of Bursa Securities.

Governing law : Laws of Malaysia.

Rating : The RCPS-i will not be rated.

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“Grantee” : An Eligible Person who has accepted an Offer in accordance with By-Law 7

“Listing Requirements” : Main Market Listing Requirements of Bursa Securities

“Market Day” : A day on which the stock market of the Bursa Securities is open for trading in securities

“Maximum Allowable Allotment”

: The maximum number of Options that can be offered to an Eligible Person as stipulated in By-Law 6

“Maximum Shares” : The maximum number of Shares which to be allotted and issued pursuant to the exercise of the Options that may be granted under the Scheme as stipulated in By-Law 4

“Offer” : An offer made in writing by the ESOS Committee to an Eligible Person in accordance with By-Law 5

“Option” : The right of a Grantee to subscribe for new SEB Shares pursuant to the contract constituted by acceptance of an Offer in accordance with By-Law 7

“Option Exercise Price” : The price at which the Grantee shall be entitled to subscribe for each new SEB Share as determined in accordance with By-Law 8

“Option Period” : A period commencing from the Date of Offer and expiring on the last day of the Scheme

“Relevant Subsidiaries” : A subsidiary of the Company within the meaning of Section 4 of the Act other than a company which is dormant and shall include a subsidiary as may be incorporated or acquired by SEB from time to time during the Scheme Period

“Scheme or ESOS” : The scheme for the granting of Options to Eligible Persons to subscribe for new SEB Shares up to but not exceeding in aggregate such number which represents ten percent (10%) of the issued share capital (excluding treasury shares, if any) of theCompany at any one time, on the terms as established by these By-Laws

“Senior Management” : Such executives as the ESOS Committee may determine to be senior management of the SEB Group

“Scheme Period” : The duration of the Scheme as provided in By-Law 23

“SEB” or “the Company” : Sapura Energy Berhad (Company No. 950894-T)

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“SEB Group” or “Group Company”

: SEB and/or its Relevant Subsidiaries

“SEB Shares” : Ordinary shares in the capital of the Company and “SEB Share” means any one of them

“SICDA” : Securities Industry (Central Depositories) Act, 1991

“WAMP” : Weighted average market price

1.2 In these By-Laws, unless the context otherwise requires –

(a) a reference to legislation includes any amendment to that legislation, any consolidation or replacement of it, and any subordinate legislation made under it and any rules, regulations and guidelines issued under that legislation or subsidiary legislation

(b) a reference to a document, including these By-Laws, includes any amendment or supplement to, or replacement or novation of, that document or these By-Laws, as the case may be;

(c) any reference to a By-Law is a reference to a By-Law of these By-Laws;

(d) the headings to the provisions are for convenience only, and shall not be taken into account in the interpretation of these By-Laws;

(e) any word importing:

(i) the singular meaning includes the plural meaning and vice versa; and

(ii) the masculine gender includes the feminine gender and vice versa;

(f) any liberty or power which may be exercised, or any decision or determination which may be made, under these By-Laws –

(i) by the Board may be exercised in the Board’s sole and absolute discretion and the Board shall not be under any obligation to give reason therefor; and

(ii) by the ESOS Committee may be exercised in the ESOS Committee’s sole and absolute discretion and the ESOS Committee shall not be under any obligation to give reason therefor, but subject always to the Board’s power to overrule any decision of the ESOS Committee;

(g) if an event is to occur on a stipulated day which is not a Market Day, then the stipulated day shall be taken to be the first Market Day after that day; and if an event is to occur on a stipulated day which falls after the expiry of the Scheme then the stipulated day shall be taken to be the last Market Day of the Scheme Period; and

(h) in the event of any change in the name of the Company from its present name, all references to “Sapura Energy Berhad” or “SEB” in these By-Laws and all other documents pertaining to the Scheme shall be deemed to be references to the Company’s new name.

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2. NAME AND OBJECTIVE OF THE SCHEME

2.1 This Scheme shall be called the “SEB Executive Share Option Scheme”.

2.2 The Scheme is aimed at retaining and motivating Eligible Persons by instilling in them a sense of ownership of the Company with a view to retaining their services and encouraging them to improve their performance, standards and efficiency.

3. MAXIMUM AMOUNT OF SHARES AVAILABLE UNDER THE SCHEME

3.1 Subject to By-Law 3.2, the maximum number of Shares which may be allotted and issued pursuant to the exercise of the Options that may be granted under the Scheme shall not in aggregate exceed ten percent (10%) of the issued share capital (excluding treasury shares, if any) of the Company at any point in time during the duration of the Scheme Period (“Maximum Shares”). The following shall not be included in the determination of compliance with the Maximum Shares:

(a) The number of SEB Shares comprised in Offers made under the Scheme but not accepted in accordance with By-Law 7.

(b) The number of SEB Shares comprised in the unexercised balance of Options at the time of termination of such Options pursuant to By-Law 12.

3.2 In the event the total number of Shares made available under the Scheme exceeds the Maximum Shares as a result of the Company reducing its own issued and paid-up share capital in accordance with the provisions of the Act or undertakes any other corporate proposal resulting in the reduction of its issued and paid-up share capital, all Offers awarded prior to the said variation of the issued and paid-up share capital of the Company shall remain valid and may vest in accordance with the provisions of this Scheme as if that reduction had not occurred. However no additional Offer shall be made unless the total number of Shares which may be allotted and issued under the Scheme in respect of the Offer by the Company shall fall below the Maximum Shares.

3.3 The Company shall, during the duration of the Scheme Period, make available sufficient unissued shares in the authorised share capital of the Company to satisfy all outstanding Offers.

4. MAXIMUM ALLOWABLE ALLOTMENT AND BASIS OF ALLOCATION

4.1 Subject to any adjustments which may be made under these By-Laws, the maximum number of Options that may be granted under the Scheme to any one Eligible Person shall be at the sole and absolute discretion of the ESOS Committee after taking into consideration the position, performance and length of service of the Eligible Person in SEB Group, or such other factors which the ESOS Committee may in its absolute discretion deem fit, subject to –

(a) the Executive Directors and senior management of SEB Group do not participate in the deliberation or discussion in respect of his/her own allocation; and

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(b) the number of Shares to be allocated to any Eligible Person who, either singly or collectively through persons connected with such Eligible Person, holds twenty percent (20%) or more of the total issued share capital (excluding treasury shares, if any) of the Company, does not exceed ten percent (10%) (or such percentage as allowable by the relevant authorities) of the total number of new Shares to be issued under the Scheme,

provided always that it is in accordance with any prevailing guidelines issued by Bursa Securities, the Listing Requirements or any other requirements of the relevant authorities.

4.2 During the duration of the Scheme Period, the ESOS Committee shall have the sole and absolute discretion in determining whether the Options are to be granted to the Eligible Person via –

(a) one single Offer at a time determined by the ESOS Committee; or

(b) several Offers where the vesting of the Options comprised in those Offers is staggered or made in several tranches at such times and on such terms and conditions as may be determined by the ESOS Committee.

4.3 An Eligible Person who is promoted to another category may be eligible to additional allocation (up to the difference between the maximum number of new SEB Shares that may be allotted and issued to each such Eligible Person under the previous category and the maximum number of new SEB Shares that may be offered under that new category) upon confirmation in the promoted category.

4.4 All allocation of Offers pursuant to the Scheme shall be verified at the end of each financial year of the Company by the Company’s audit committee and a statement verifying such allocation shall be included in SEB’s annual report.

5. ELIGIBILITY

5.1 Subject to the discretion of the ESOS Committee, any Senior Management or Executive Director of SEB Group shall be eligible to participate in the Scheme if, as at the Date of Offer, that person –

(a) has attained at least eighteen (18) years of age and is not an undischarged

bankrupt nor subject to any bankruptcy proceedings; (b) if he/she is a Senior Management, he/she is employed on a full time basis and

is on the payroll of any company in SEB Group, and his/her employment has been confirmed by such company in SEB Group ;

(c) if he/she is a Senior Management, he/she is serving in a specific designation under an employment contract for a fixed duration and has been in the employment of SEB Group for such period as may be determined by the ESOS Committee prior to and up to the Date of Offer;

(d) if he/she is an Executive Director, he/she has been serving SEB Group for such period as may be determined by the ESOS Committee prior to and up to the Date of Offer;

(e) if he/she is an Executive Director of the Company, the allocation of the Options granted to him/her in his/her capacity as an Executive Director of the Company under the Scheme has been approved by the shareholders of the Company at a general meeting; and

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(f) fulfils any other criteria or falls within such category as may be determined by the ESOS Committee at its absolute discretion for purposes of selecting an Eligible Person from time to time.

5.2 The ESOS Committee shall have the discretion to extend the benefit of this Scheme or otherwise to a Senior Management or an Executive Director in any of the following circumstances:

(a) A Senior Management or an Executive Director who is in employment of or serving a corporation which is not a Group Company but which subsequently becomes a Group Company as a result of restructuring, an acquisition, a merger, a divestment or other exercise involving the Company and/or any Group Company (“Previous Company”).

(b) An Senior Management or an Executive Director who was employed or was serving in a Previous Company and is subsequently transferred from that Previous Company to a Group Company.

(c) Where –

(i) a corporation that was a Group Company ceases to be a Group Company (“Ex-Group Company”); and

(ii) a Senior Management or an Executive Director of that Ex-Group Company is re-employed by another Group Company.

5.3 In the case where a Senior Management or an Executive Director is transferred, from a Group Company to a corporation that is not a Group Company, that Senior Management or Executive Director may, at the discretion of the ESOS Committee, continue to be entitled to all of his rights in respect of his unexercised Options.

5.4 Eligibility under the Scheme however, does not confer upon an Eligible Person a claim

or right to participate in the Scheme or any other rights whatsoever under the Scheme and an Eligible Person does not have any rights over or in connection with the Options or the new Shares comprised therein unless an Offer has been made in writing by the ESOS Committee to that Eligible Person and that Eligible Person has accepted the Offer in accordance with By-Law 7.

5.5 The selection of any Eligible Person to participate in the Scheme shall be at the discretion of the ESOS Committee whose decision shall be final and binding.

5.6 In addition to the above criteria of eligibility, any Foreign Employee / Grantee (including Executive Director) of SEB Group may be considered for participation in the Scheme.

6. OFFER

6.1 The ESOS Committee shall determine who shall participate in the Scheme and Offers shall be issued during the duration of the Scheme only to such Eligible Persons as the ESOS Committee shall determine in its absolute discretion.

6.2 The actual number of Options which may be offered to an Eligible Person shall be determined at the absolute discretion of the ESOS Committee and, subject to any adjustment that may be made under By-Law 18, shall not be less than one hundred (100) SEB Shares and shall always be in multiples of one hundred (100) SEB Shares.

6.3 The ESOS Committee shall be entitled to make more than one Offer to any Eligible Person.

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6.4 The Offer may be made upon such terms and conditions as the ESOS Committee may decide from time to time. The ESOS Committee shall decide in relation to an Offer, such terms and conditions including –

(a) the number of Options which are the subject of the Offer;

(b) the vesting date and vesting condition of the Offer;

(c) the Option Period; and

(d) such other condition which the ESOS Committee may determine from time to time in relation to that Offer.

6.5 Any Offer that has not been accepted in accordance with By-Law 7 shall become null and void, and incapable of acceptance upon –

(a) the death of the Eligible Person;

(b) the Eligible Person having received a letter of termination or ceasing to be an employee of any Group Company, for any reason whatsoever;

(c) the Eligible Person giving notice of his resignation from employment;

(d) the corporation which employs the Eligible Person ceases to be a Group Company; or

(e) the Eligible Person is subject to disciplinary proceedings.

6.6 Each Offer shall be made in writing and shall be sent to the Eligible Person as soon as reasonably practicable after the making of the Offer.

6.7 An Option is exercisable only by the Eligible Person personally during his lifetime whilst he is in the employment of any company in the Group and shall not be transferred, assigned, encumbered or otherwise disposed of in any manner whatsoever by the Eligible Person.

7. ACCEPTANCE OF OFFERS

7.1 An Offer shall be valid for a period of thirty (30) days from the Date of Offer or such longer period as may be determined by the ESOS Committee on a case to case basis, at its absolute discretion. The acceptance of an Offer shall be made by way of a written notice from the Eligible Person to the ESOS Committee in the form prescribed by the ESOS Committee and shall be accompanied by the payment of RM1.00 (Ringgit Malaysia One) as non-refundable consideration for the Option.

7.2 In the event that the Eligible Person fails to accept the Offer or pay the acceptance consideration within the prescribed period and in the manner aforestated, the Offer shall automatically lapse and be null and void.

8. OPTION EXERCISE PRICE

The Option Exercise Price shall be determined by the Board upon recommendation of the ESOS Committee based on the five (5) day WAMP of SEB Shares, as quoted on Bursa Securities, immediately preceding the Date of Offer with a discount of not more than ten percent (10%) or such other percentage of discount as may be permitted by Bursa Securities or any other relevant authorities from time to time during the duration of the Scheme.

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9. EXERCISE OF OPTIONS

9.1 An Option can be exercised by the Grantee by notice in writing to the Company during the Option Period in respect of all or any number of the SEB Shares comprised in the Option, such part being in multiples of one hundred (100) SEB Shares. Any partial exercise of an Option shall not preclude the Grantee from exercising the Option in respect of the balance of the SEB Shares comprised in the Option.

9.2 In order to exercise an Option in whole or in part, the Grantee (or as the case may be, his personal representatives) must deliver to the ESOS Committee a written notice in such form as the ESOS Committee may from time to time prescribe provided that such delivery of a written notice is only done on such dates as may be communicated by the ESOS Committee to all Eligible Person. Any such notice shall state the number of SEB Shares in respect of which the Option is being exercised, which number –

(a) shall not exceed the number of SEB Shares or the remaining number of SEB Shares comprised in the Option, as the case may be;

(b) shall not exceed the maximum number of SEB Shares in respect of which the Grantee may subscribe in every year;

(c) shall not be less than 100 SEB Shares; and

(d) shall be in the multiple of 100 SEB Shares.

9.3 The notice shall be accompanied by payment in full of the Option Exercise Price for the number of new SEB Shares in respect of which the Option is exercised.

9.4 In the event of an Option being exercised in part only, the balance of the Option not thereby exercised shall continue to be exercisable in accordance with the provisions hereof until the expiry of the Option Period.

9.5 As soon as practicable and in any event within eight (8) Market Days (or such period as may be prescribed under the Listing Requirements) from the date on which the ESOS Committee is in receipt from the Grantee of the aforesaid notice and payment of the Option Exercise Price, the Company shall allot and issue to the Grantee the new SEB Shares in respect of which the Option has been exercised, despatch to the Grantee the notice of allotment and issuance thereof and make an application for the quotation of such new SEB Shares.

9.6 A Grantee who exercises his Option shall provide the ESOS Committee with his CDS Account number in the notice referred to in By-Law 9.2. The new SEB Shares to be issued pursuant to the exercise of an Option will be credited directly into the CDS account of the Grantee and a notice of allotment and issuance stating the number of new SEB Shares credited into the CDS Account will be issued to the Grantee and no physical share certificate will be issued.

9.7 All Options to the extent unexercised on the expiry of the Option Period shall lapse.

9.8 The Company, the Board and the ESOS Committee shall not under any circumstances be held liable to any person for any costs, losses, expenses, damages or liabilities howsoever arising in the event of any delay on the part of the Company in procuring the Bursa Securities to list the SEB Shares subscribed for by a Grantee.

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10. RETENTION PERIOD

The Grantee must not sell, transfer or assign any new SEB Shares obtained through the exercise of Options offered to him/her under the Scheme within three (3) years from the Date of Offer.

11. RANKING OF NEW SEB SHARES

The new SEB Shares to be allotted and issued upon exercise of the Options shall, upon allotment and issue rank equally in all respects with the then issued SEB Shares including the entitlements to dividends, rights, allotments or other distributions, except that they shall not be entitled to any dividends, rights, allotments and/or other distributions, of which the Entitlement Date is before the date of allotment of the new SEB Shares.

12. TERMINATION OF THE OPTION

12.1 In the event of the cessation of employment of a Grantee with the SEB Group or cessation of the Grantee as an Executive Director of SEB Group or where the Grantee otherwise ceases to be an Eligible Person (as the case may be) for whatever reason prior to the full exercise of an Option, such Option or the unexercised balance thereof, as the case may be, shall forthwith cease to be valid without any claim against the Company unless otherwise determined by the ESOS Committee in its absolute discretion if such cessation occurs by reason of –

(a) retirement on attaining the retirement age under the Group’s terms and conditions of employment;

(b) retirement before attaining the normal retirement age;

(c) resignation or termination due to ill-health, injury, physical or mental disability;

(d) redundancy or retrenchment under a voluntary separation scheme;

(e) non-renewal of fixed term contract; or

(f) any other circumstances which are acceptable to ESOS Committee,

such Option shall remain exercisable during the Option Period.

12.2 Application for the written approval of the ESOS Committee shall be made –

(a) in a case where By-Laws 12.1(a), (b) or (e) is applicable, before the Grantee’s last day of employment; or

(b) in a case where By-Law 12.1(c) is applicable, within one (1) month after the Grantee notifies his employer of his resignation due to ill health, injury or disability; or

(c) in a case where By-Law 12.1(d) is applicable, within one (1) month after the Grantee’s acceptance of the offer of a voluntary separation scheme,

failing which, any Options held by the Grantee shall be automatically terminated.

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12.3 The ESOS Committee shall consider applications under By-Law 12.2 on a case-by-case basis and may in its absolute discretion approve or reject any application in whole or in part without giving any reasons therefore and may impose any terms and conditions in granting an approval. The decision of the ESOS Committee shall be final and binding. In the event that the ESOS Committee approves an application in whole or in part, the Grantee may exercise the Options which are the subject of the approval within the period so approved by the ESOS Committee. Any Options in respect of which an application is rejected shall be automatically terminated on the date of termination stipulated in the relevant paragraph of By-Law 12.2 or on the date of the ESOS Committee’s decision, whichever is the later.

12.4 In the event that the ESOS Committee receives an application under By-Law 12.2 after the expiry of the relevant period under By-Law 12.2, the ESOS Committee may in its absolute discretion consider the application taking into account the reasons given by the Grantee for the delay in making the application. In the event that the ESOS Committee approves the application in whole or in part, the Company shall make an Offer in respect of the Options which are the subject of the approval to the Grantee and such Options shall be exercisable –

(a) only within the Option Period of those Options which were terminated due to the Grantee’s delay in making the application;

(b) in accordance with the provision of By-Laws as applicable in respect of such terminated Options; and

(c) at the Option Exercise Price applicable in respect of such terminated Options.

12.5 Any Option which lapses upon the cessation of employment of a Grantee with the SEB Group, may, at the discretion of the ESOS Committee, be re-allotted and re-issued to other Eligible Person.

12.6 In the event of the liquidation of the Company, all unexercised or partially exercised Options shall lapse.

13. DIVESTMENT FROM THE GROUP

If a Grantee who was in the employment of a company in the Group which was subsequently divested wholly, or in part, from the Group such that the company is no longer a Relevant Subsidiary, then such Grantee will not be eligible to participate for further Options under the Scheme. Unless decided otherwise by the ESOS Committee, all such unexercised Option(s) which were granted to him under the Scheme together with the right of such Grantee to subscribe for that number of new SEB Shares or any part thereof granted under such unexercised Options shall automatically lapse and be null and void.

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14. ACQUISITION OF SUBSIDIARIES

Notwithstanding anything to the contrary, a Senior Management or an Executive Director who is in employment of a Previous Company (“Affected Employee”) –

(a) will be entitled to continue to exercise all such unexercised rights or options that were granted to him under the Previous Company’s employee share scheme or employee share option scheme in accordance with the by-laws of that Previous Company’s employee share scheme or employee share option scheme, but he shall not, upon that Previous Company becoming a Group Company, be eligible to participate for furtherrights or options under such Previous Company’s employee share scheme or employee share option scheme unless permitted by the ESOS Committee; and

(b) subject to the approval of the ESOS Committee, may be eligible to participate in this Scheme.

15. TAKEOVER

15.1 Notwithstanding By-Laws 9 and 23 and subject to the provisions of any applicable statutes, rules, regulations or conditions issued by the relevant authorities, in the event –

(a) a take-over offer is made for the Company to acquire the whole of the issued ordinary share capital of the Company (or such part thereof not at the time held by the person making the general offer (“Offeror”) or any persons acting in concert with the Offeror) and such offer becoming or being declared unconditional, a Grantee who is holding outstanding exercisable Options shall be entitled within thirty (30) days from the date on which such offer becomes or is declared unconditional, to exercise all or any part of the Grantee’s Options to which he/she is then entitled; and

(b) the Offeror becoming entitled or bound to exercise the right of compulsory acquisition of the SEB Shares under the provisions of any applicable statutes, rules and/or regulations and gives notice to each Grantee that it intends to exercise such right on a specific date (“Specific Date”), a Grantee who is holding outstanding exercisable Options will be entitled to exercise all or any part of the Grantee’s Options from the date of service of the said notice to the Grantee until the expiry of such Specific Date.

15.2 In the foregoing circumstances, if the Grantee fails to exercise his Options or elects to exercise only in respect of a portion of such SEB Shares, then any Options to the extent unexercised by the expiry of the periods stipulated in the aforesaid circumstances shall automatically lapse and be null and void.

16. SCHEME OF ARRANGEMENT, AMALGAMATION, AND RECONSTRUCTION

Notwithstanding By-Law 9, if under Section 366 of the Act, the Court sanctions a compromise or arrangement proposed for the purpose of or in connection with a scheme for the reconstruction of the Company, or its amalgamation with any other company under Section 370of the Act notice thereof shall be given by the Company and the ESOS Committee may permit the exercise of any unexercised Option by the Grantee or (as the case may be) his personal representatives, subject to such terms and conditions as may be prescribed by the ESOS Committee.

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17. LIQUIDATION OF THE COMPANY

On the liquidation of the Company, all or any part of the unexercised Option shall automatically lapse and become null and void and of no further force and effect.

18. ALTERATION TO SHARE CAPITAL DURING THE OPTION PERIOD

18.1 Subject to the Listing Requirements, policies or guidelines of the Bursa Securities or any other relevant regulatory authority (where applicable), in the event of any alteration in the capital structure of the Company during the duration of the Scheme, whether by way of capitalisation of profits or reserves, rights issue, bonus issue, reduction, subdivision or consolidation of capital or any other variations of capital, the ESOS Committee shall have the discretion, in accordance with the provision of the By-Laws, to make adjustments to –

(a) the Option Exercise Price;

(b) the number of SEB Shares comprised in the Option or any portion thereof which have not been exercised; and/or

(c) the number of new SEB Shares and/or Option Exercise Price comprised in an Offer which is open for acceptance (if such Offer is subsequently accepted in accordance with the terms of the Offer and the Scheme),

in such manner as the ESOS Committee may consider appropriate and, upon any adjustment being made pursuant to this By-Law, the ESOS Committee shall notify the Grantee in writing within thirty (30) days upon the last approvals being obtained from the relevant parties/authorities of the adjusted Option Exercise Price and/or the adjusted number of shares comprised in the Option.

18.2 Save for a bonus issue, subdivision or consolidation of Shares, adjustments made pursuant to By-Law 18.1 must be confirmed in writing by the external auditors of the Company for the time being (acting as experts and not as arbitrators) or the Adviser upon reference to them by the ESOS Committee, to be in their opinion, fair and reasonable.

18.3 Notwithstanding the generality of the provisions of By-Law 18.1, the following provisions shall apply in relation to an adjustment which is made pursuant to By-Law 18.1:

(a) Any adjustment to the Option Exercise Price shall be rounded up to the nearest one (1) sen.

(b) In determining a Grantee’s entitlement to subscribe for SEB Shares, any fractional entitlements will be disregarded.

18.4 The adjustment pursuant to this By-Law 18 shall be made in accordance with the formulas as set out in the Schedule attached to these By-Laws and on the day immediately following the entitlement date/books closure date for the event giving rise to the adjustment.

18.5 The provisions of this By-Law 18 shall not apply where the alteration in the capital structure of the Company arises from the following:

(a) An issue of new SEB Shares or other securities convertible into new SEB Shares or with rights to acquire or subscribe for SEB Shares in consideration or part consideration for an acquisition of any other securities, assets or business.

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(b) A special issue of new SEB Shares to Bumiputera parties nominated by the Ministry of International Trade and Industry, Malaysia and/or other government authorities to comply with the Government policy on Bumiputera capital participation.

(c) A private placement of new SEB Shares by the Company.

(d) A share buy-back arrangement by the Company pursuant to Section 127 of the Act.

(e) An issue of new SEB Shares arising from the exercise of any conversion rights attached to securities convertible to SEB Shares or upon exercise of any other rights including warrants (if any) issued by the Company.

(f) An issue of new SEB Shares upon the exercise of Options pursuant to the Scheme.

18.6 However, in the event the Company purchases its own shares and resolves to cancel all or part of the shares so purchased, thereby diminishing its issued and paid-up share capital, the Options granted prior to the adjustment of its issued and paid-up share capital shall remain valid and exercisable in accordance with the terms and conditions of these By-Laws. If the aggregate of the number of SEB Shares comprised in such Options is greater than the Maximum Shares, the ESOS Committee shall not make any further Offers.

19. QUOTATION OF SHARES

If at the time of the allotment and issuance of the new SEB Shares pursuant to the exercise of the Option, the existing SEB Shares are quoted on Bursa Securities, the Company shall make an application to Bursa Securities for its permission to deal in and for quotation of the new SEB Shares so allotted and issued.

20. ADMINISTRATION

20.1 The Scheme shall be administered by the ESOS Committee consisting of such persons appointed by the Board from time to time.

20.2 The ESOS Committee shall administer the Scheme in such manner as it shall in its discretion deem fit. For the purpose of administering the Scheme, the ESOS Committee may do all such acts and things and enter into any transactions, agreements, deeds, documents or arrangements, and make rules, regulations or impose terms and conditions or delegate part of its power relating to the Scheme, as the ESOS Committee may in its absolute discretion deem fit.

20.3 The Board shall have power from time to time to –

(a) approve, rescind or revoke the appointment of any person to the ESOS Committee as it shall deem fit; and

(b) assume or exercise any of the powers and authorities conferred upon the ESOS Committee pursuant to these By-Laws.

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21. DISCIPLINARY PROCEEDINGS

21.1 In the event an Eligible Person is subjected to disciplinary proceedings (whether or not such disciplinary proceedings will give rise to a dismissal or termination of service), the right of the Eligible person to exercise any unexercised Option shall be suspended pending the outcome of the disciplinary proceedings unless decided otherwise by the ESOS Committee who may in so doing, impose such terms and conditions as it deems appropriate having regard to the nature of the disciplinary actions made or broughtagainst the Eligible Person. In the event the Eligible Person is found guilty resulting in the dismissal or termination of service, the Option shall immediately lapse without notice upon pronouncement of the dismissal or termination of service.

21.2 Nothing herein shall prevent the ESOS Committee from making a new Offer or reinstating the right of the Eligible Person to exercise any unexercised Option in the event that such disciplinary action is not decided against him or if such disciplinary action is withdrawn provided that such Offer or reinstatement is made within the Scheme Period. If the ESOS Committee does not reinstate the right of the Eligible Person prior to the expiry of the Scheme Period, the Offer and acceptance thereof shall automatically lapse and be null and void.

22. AMENDMENT AND/OR MODIFICATION TO THE SCHEME

22.1 Subject to compliance with the Listing Requirements and the approval of any other authorities, the ESOS Committee may from time to time recommend to the Board any additions, modifications and amendments to or deletions of these By-Laws as it shall in its discretion think fit.

22.2 The approval of the shareholders of the Company in a general meeting shall not be required in respect of additions or amendments to or deletions of these By-Laws provided that no additions, amendments or deletions shall be made to these By-Laws which would –

(a) prejudice any rights which would have accrued to any Grantee without his/her prior consent; or

(b) increase the number of Shares to be issued pursuant to the exercise of the Options available under the Scheme beyond the Maximum Shares; or

(c) alter any matter which are required to be contained in these By-Laws by virtue of the Listing Requirements to the advantage of the Eligible Person or Grantee.

22.3 The Grantee shall be given written notice of any additions or amendments to or deletion of these By-Laws within fourteen (14) days of any of the foregoing taking effect.

23. DURATION OF THE SCHEME

23.1 The Scheme shall be in force for a duration of seven (7) years from the Effective Date.

23.2 The Scheme shall come in force on the date to be determined by the ESOS Committee following full compliance with the following relevant requirements prescribed under the Listing Requirements of Bursa Securities (“Effective Date”):

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(a) Approval of Bursa Securities for the listing of the new Shares to be issued pursuant to the exercise of the Options being obtained.

(b) Approval of the shareholders of the Company for the Scheme at an extraordinary general meeting (“EGM”) being obtained.

(c) Submission to Bursa Securities of the final copy of the By-Laws together with a letter of compliance pursuant to Paragraph 2.12 of the Listing Requirements and a checklist showing compliance with Appendix 6E of the Listing Requirements (and/or such other documents as may be determined by Bursa Securities from time to time).

(d) Approval of any other relevant authorities, where applicable, being obtained.

(e) Fulfillment or waiver (as the case may be) of all applicable conditions attached to the above approvals (if any).

23.3 The Adviser of the Company shall submit a confirmation letter to Bursa Securities of full compliance with relevant requirements of the Listing Requirements of Bursa Securities stating the effective date of implementation of the Scheme together with a true copy of a resolution passed by the shareholders of the Company in general meeting. The confirmation letter shall be submitted to Bursa Securities no later than five (5) Market Days after the Effective Date.

23.4 Offers can only be made during and not after the duration of the Scheme.

23.5 Subject to a notice period of at least thirty (30) days being provided, and in compliance with the existing guidelines or directives of Bursa Securities or any other regulatory authorities, the Scheme may be terminated by the ESOS Committee at any time during the Scheme Period and the Company shall make an announcement immediately through Bursa Securities. The announcement shall include –

(a) the effective date of termination;

(b) the number of Options exercised and/or vested; and

(c) the reason for termination.

23.6 Upon the termination of the Scheme –

(a) no further Offers shall be made by the ESOS Committee from the date of such termination;

(b) all Offers which have yet to be accepted shall automatically lapse on the date of such termination; and

(c) all outstanding Offers shall be automatically terminated on the date of such termination.

24. DISPUTES

In the event of any dispute between the Board or ESOS Committee and an Eligible Person or Grantee, as to any matter or thing of any nature arising hereunder, the Board or ESOS Committee shall determine such dispute or difference by a written decision (without the obligation to give any reason for the same) given to the Eligible Person or Grantee, as the case may be. The said decision of the Board or ESOS Committee shall be final and binding on the parties.

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25. COMPENSATION

25.1 Participation in the Scheme by a Grantee is a matter entirely separate from any right or entitlement the Grantee may have and from his terms and conditions of employment by SEB Group and participation in the Scheme shall in no respect whatsoever affect in any way a Grantee’s rights or entitlement or terms or conditions of the employment. In particular (but without limiting the generality of the foregoing words), any Grantee who leaves the employment with SEB Group shall not be entitled to any compensation for any loss of any right or benefit or prospective right or benefit under the Scheme which he might otherwise have enjoyed whether such compensation is claimed by way of damages for wrongful dismissal or breach of contract or by way of compensation for loss of office or otherwise howsoever.

25.2 No Eligible Person or Grantee or legal personal representatives shall be entitled to bring any claim, action or proceedings against the Company or the ESOS Committee or any other party for compensation, loss or damages whatsoever and howsoever arising from the suspension of his rights to exercise his Option or his Option ceasing to be valid pursuant to the provisions of these By-Laws.

26. INSPECTION OF AUDITED ACCOUNTS

All Grantees shall be entitled to inspect a copy of the latest audited accounts of the Company, which shall be made available at the Company’s website, www.sapuraenergy.com.

27. COST AND EXPENSES

The Company shall bear all costs of and incidental to the setting-up and administration of the Scheme. Any expenses reasonably incurred by the Company in any issuance of shares in the name of the Grantee or his personal representatives or nominees shall also be payable by the Company save and except for any taxes (including income tax) which shall be borne by the Grantee.

28. SCHEME NOT A TERM OF EMPLOYMENT

This Scheme does not form part nor shall it in any way be construed as part of the terms and conditions of employment of any employee.

29. CONSTITUTION

Notwithstanding the terms and conditions contained in these By-Laws, if a situation of conflict should arise between these By-Laws and the Constitution of the Company, the provisions of the Constitution of the Company shall prevail at all times.

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30. NOTICES

30.1 Any notice or request which the Company is required to give, or may desire to give, to any Eligible Person or the Grantee pursuant to the Scheme shall be in writing and shall be deemed to be sufficiently given –

(a) if it is sent by prepaid registered post by the Company to the Eligible Person or the Grantee at the last address known to the Company as being his address and such notice or request shall be deemed to have been received at the time when it would in the ordinary course of post be delivered; or

(b) if it is given by hand to the Eligible Person or the Grantee.

Any change of address of the Eligible Person or the Grantee shall be communicated in writing to the Company and the ESOS Committee.

30.2 Any notification or other notice required to be given to the Company or the ESOS Committee shall be properly given if sent by Advice of Receipt registered post or delivered by hand to the Company at its registered address at Sapura@Mines, No.7, Jalan Tasik, The Mines Resort City, 43300 Seri Kembangan, Selangor Darul Ehsan.

31. SEVERABILITY

Any term, condition, stipulation, or provision in these By-Laws which is illegal, void or unenforceable shall be ineffective to the extent of such illegality, voidness or unenforceability, but the same shall not invalidate or render illegal, void or unenforceable any other term, condition, stipulation or provision contained in these By-Laws.

32. ERRORS AND OMMISSIONS

If as a consequence of an error or omission, the ESOS Committee discovers or determines that the number of SEB Shares allotted and issued to any Grantee on any occasion is found to be incorrect and such errors or omission cannot be corrected, the ESOS Committee may do all such acts and things to rectify such error or omission including but not limited to ensure that the Granted is credited with the correct number of SEB Shares to which he is entitled.

33. GOVERNING LAW

The Scheme, these By-Laws, the Offers made and Options granted and actions taken under this Scheme shall be governed and construed in accordance with laws of Malaysia and the Grantee, by accepting the Offer, irrevocably submit to the exclusive jurisdiction of the courts of Malaysia.

34. DECISION OF THE BOARD AND ESOS COMMITTEE

Any decision or determination by the Board and the ESOS Committee under these By-Laws shall be final and binding on all parties.

35. DELAY IN PERFORMANCE

The performance of any obligations provided herein may be delayed, prohibited or become impossible by reason of events beyond reasonable control of the Company or the ESOS Committee.

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then in respect of each such case, the Option Exercise Price shall be adjusted by multiplying it by the following fraction:

C - DC

and in respect of the case referred to in this paragraph 2(b), the additional number of Options held by each Grantee shall be adjusted in accordance with the following formula:

Number of additional Options =

T x C - T C-D*

where:

T = existing number of Options;

C = the Current Market Price (as defined in paragraph 7 below) of each SEB Share on the Market Day immediately preceding the date on which the Capital Distribution or, as the case may be, the offer or invitation is publicly announced to Bursa Securities or (failing any such announcement), immediately preceding the date of the Capital Distribution or, as the case may be, of the offer or invitation; and

D = (1) in the case of an offer or invitation to acquire or subscribe for SEB Shares by way of rights under paragraph 2(b) above or for securities convertible into SEB Shares or securities with rights to acquire or subscribe for SEB Shares under paragraph 2(c) above, the value of the rights attributable to one (1) SEB Share (as defined below); or

(2) in the case of any other transaction falling within this paragraph 2

hereof, the fair market value, as determined (with the concurrence of the external auditors and/or the Approved Adviser) of that portion of the Capital Distribution attributable to one (1) SEB Share.

For the purpose of paragraph (1) of D above “the value of the rights attributable to one (1) SEB Share” shall be calculated in accordance with the formula:

C - EF + 1

where:

C = as C above

E = the Option Exercise Price for one (1) additional SEB Share under the terms of such offer or invitation or one (1) additional security convertible into SEB Shares or one (1) additional security with rights to acquire or subscribe for SEB Shares;

F = the number of SEB Shares which it is necessary to hold in order to be offered or invited to acquire or subscribe for one (1) additional SEB Share or security convertible into SEB Shares or one (1) additional security with rights to acquire or subscribe for SEB Shares; and

D*= the value of the rights attributable to one (1) SEB Share (as defined below).

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For the purpose of definition D* above, the “value of the rights attributable to one (1) SEB Share” shall be calculated in accordance with the formula:

C - E*F* + 1

where:

C = as C above;

E* = the Option Exercise Price for one (1) additional SEB Share under the terms of any such offer or invitation; and

F*= the number of SEB Shares which it is necessary to hold in order to be offered or invited to acquire or subscribe for one (1) additional SEB Share.

For the purpose of this paragraph 2 “Capital Distribution” shall (without prejudice to the generality of that expression) include a capital reduction pursuant to Sections 116 and 117 of the Act and distributions in cash or specie or by way of issue of SEB Shares (not falling under paragraph 1 hereof) or other securities credited as fully or partly paid-up by way of capitalisation of profits or reserves (whether of a capital or income nature and including any share premium account or capital redemption reserve fund, if applicable).

Any dividend declared or provided for by the Company in the accounts of any period shall (whenever paid and howsoever described) be deemed to be a Capital Distribution unless the aggregate dividends declared or provided for the financial year is less than ten percent (10%) of the nominal value of the SEB Shares.

Any dividend charged or provided for in the accounts of any period shall (whenever paid and howsoever described) be deemed to be a Capital Distribution unless it is paid out of the aggregate of the net profits attributable to the Company shareholders for any period as shown in the audited consolidated financial statements of SEB.

Each adjustment will be effective (if appropriate retroactively) from the commencement of the next Market Day following the entitlement date for such issue.

3. If and whenever the Company make any allotment to its ordinary shareholders as

provided in paragraph 1 above and also makes any offer or invitation to its shareholders as provided in paragraph 2(b) or paragraph 2(c) and the entitlement date for the purpose of the allotment is also the entitlement date for the purpose of the offer or invitation, the Option Exercise Price shall be adjusted by multiplying it by the following fraction:

(G x C) + (H x I)(G + H + B) x C

and where the Company makes any allotment to its ordinary shareholders as provided in paragraph 1 above and also makes any offer or invitation to its ordinary shareholders as provided in paragraphs 2(b) or 2(c) above and the entitlement date for the purpose of the allotment is also the entitlement date for the purpose of the offer or invitation, the additional number of Options which are held by each Grantee, shall be adjusted in accordance with the following formula:

Number of additional Options = T x (G + H*) x C - T (G x C) + (H* x I*)

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where:

G = the aggregate number of issued and fully paid-up SEB Shares on the entitlement date;

B = as B above;

C = as C above;

H = the aggregate number of new SEB Shares under an offer or invitation to acquire or subscribe for SEB Shares by way of rights or under an offer or invitation by way of rights to acquire or subscribe for securities convertible into SEB Shares of rights to acquire or subscribe for SEB Shares as the case may be;

H*= the aggregate number of new SEB Shares under an offer or invitation toacquire or subscribe for SEB Shares by way of rights;

I = the Option Exercise Price of one (1) additional SEB Shares under the offer or invitation to acquire or subscribe for SEB Shares or the exercise price on conversion of such securities or exercise of such rights to acquire or subscribe for one (1) additional SEB Share, as the case may be;

I*= the Option Exercise Price of one (1) additional SEB Share under the offer or invitation to acquire or subscribe for SEB Shares; and

T = as T above.


4. If and whenever the Company makes any offer or invitation to its ordinary shareholders to acquire or subscribe for SEB Shares as provided in paragraph 2(b) above together with an offer or invitation to acquire or subscribe for securities convertible into SEB Shares or securities with rights to acquire or subscribe for SEB Shares as provided in paragraph 2(c), the Option Exercise Price shall be adjusted by multiplying it by the following fraction:

(G x C) + (H x I) + (J x K)(G + H + J) x C

and the additional number of Options which are held by each Grantee, shall be adjusted in accordance with the following formula:

Number of additional Options = T x (G + H*) x C - T (G x C) + (H* x I*)

where:

C = as C above;

G = as G above;

H = as H above;

H*= as H* above;

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I = as I above;

I*= as I* above;

J = the aggregate number of SEB Shares to be issued to its ordinary shareholders upon conversion of such securities or exercise of such rights to subscribe for SEB Shares by the ordinary shareholders;

K = the exercise price on conversion of such securities or exercise of such rights to acquire or subscribe for (1) additional SEB Share; and

T = as T above.


5. If and whenever the Company makes an allotment to its ordinary shareholders as provided in paragraph 1 above and also makes an offer or invitation to acquire or subscribe for SEB Shares to its ordinary shareholders as provided in paragraph 2(b) above together with rights to acquire or subscribe for securities convertible into or with rights to acquire or subscribe for SEB Shares as provided in paragraph 2(c) above and the entitlement date for the purpose of the allotment and issuance is also the entitlement date for the purpose of the offer or invitation, the Option Exercise Price shall be adjusted by multiplying it by the following fraction:

(G x C) + (H x I) + (J x K)(G + H + J + B) x C

and the additional number of Option which a Grantee may be entitled to be issued with, shall be adjusted in accordance with the following formula:

Number of additional Options = T x (G + H* + B) x C - T (G x C) + (H* x I*)

where:

B = as B above;

C = as C above;

G = as G above;

H = as H above;

H*= as H* above;

I = as I above;

I*= as I* above;

J = as J above;

K = as K above; and

T = as T above. Each adjustment will be effective (if appropriate retroactively) from the commencement of the next Market Day following the entitlement date for such issue.

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6. If and whenever (otherwise than pursuant to a rights issue available to all ordinary shareholders and requiring an adjustment under paragraphs 2(b), 2(c), 3, 4 or 5 above, the Company shall issue either any SEB Shares or any securities convertible into SEB Shares or with rights to acquire or subscribe for SEB Shares, and in any such case, the Total Effective Consideration per SEB Share (as defined below) is less than ninety percent (90%) of the Average Price for one (1) SEB Share (as defined below) or, as the case may be, the price at which SEB Shares will be issued upon conversion of such securities or exercise of such rights is determined, the Option Exercise Price shall be adjusted by multiplying it by the following fraction:

L + ML + N

where:

L = the number of SEB Shares in issue at the close of business on the Market Day immediately preceding the date on which the relevant adjustment becomes effective;

M = the number of SEB Shares which the Total Effective Consideration (as defined below) would have purchased at the Average Price (as defined below) (exclusive of expenses); and

N = the aggregate number of SEB Shares so issued or, in the case of securities convertible into SEB Shares or with rights to acquire or subscribe for SEB Shares, the maximum number (assuming no adjustment of such rights) of SEB Shares issuable upon full conversion of such securities or the exercise in full of such rights.

For the purposes of this paragraph 6, the “Total Effective Consideration” shall be determined by the Board with the concurrence of an auditor and/or the ApprovedAdviser and shall be:

(1) in the case of the issue of SEB Shares, the aggregate consideration receivable by the Company on payment in full for such SEB Shares; or

(2) in the case of the issue by the Company of securities wholly or partly convertible into SEB Shares the aggregate consideration receivable by the Company on payment in full for such securities or such part of the securities as is convertible together with the total amount receivable by the Company upon full conversion of such securities (if any); or

(3) in the case of the issue by the Company of securities with rights to acquire or subscribe for SEB Shares, the aggregate consideration attributable to the issue of such rights together with the total amount receivable by the Company upon full exercise of such rights.

In each case without any deduction of any commissions, discounts or expenses paid, allowed or incurred in connection with the issue thereof, and the “Total Effective Consideration per SEB Share” shall be the Total Effective Consideration divided by the number of SEB Shares issued as aforesaid or, in the case of securities convertible into SEB Shares or securities with rights to acquire or subscribe for SEB Shares, by the maximum number or SEB Shares issuable on full conversion of such securities or on exercise in full of such rights.

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For the purpose of paragraph 6, the “Average Price” of a SEB Share shall be the average price of one (1) SEB Share as derived from the last dealt prices for one (1) or more board lots of the SEB Shares as quoted on Bursa Securities on the Market Days comprised in the period used as a basis upon which the issue price of such SEB Shares is determined.

Each such adjustment will be calculated (if appropriate retroactively) from the close of business of the next Market Day following the date on which the issue is announced, or (failing any such announcement) on the next Market Day following the date on which the Company determines the Option Exercise Price of such SEB Shares.

Each such adjustment will be effective (if appropriate retroactively) from the commencement of the next Market Day following the completion of the above transaction.

7. For the purposes of paragraphs 2, 3, 4 and 5 above, the “Current Market Price” in relation to one (1) SEB Share for any relevant day shall be the average of the last dealt prices for the five (5) consecutive Market Days before such date or during such other period as may be determined in accordance with any guidelines issued, from time to time, by Bursa Securities.

(ii) Whenever there is an adjustment as herein provided, the Company shall give notice to holders of Options that the Option Exercise Price and/or the number of Options held by each Grantee has been adjusted and setting forth the event giving rise to the adjustment, the Option Exercise Price and/or the number of Option Shares held in effect prior to such adjustment, the adjusted Option Exercise Price and/or the adjusted number of Options held and the Effective Date thereof shall, at all times thereafter so long as the Options remain exercisable make available for inspection at its registered office a signed copy of the certificate of the external auditors or the Approved Adviser certifying the adjustment to the Option Exercise Price and/or the number of Options held and a certificate signed by a director setting forth brief particulars of the event giving rise to the adjustment, the Option Exercise Price and/or the number of Options held in effect prior to such adjustment, the adjusted Option Exercise Price and/or the adjusted number of Options held and the Effective Date thereof and shall, on request, send a copy thereof to any holder of Options.

(iii) Notwithstanding the provision referred to in this Schedule and By-Law 18, in any circumstances where the Board consider that adjustments provided under the said provisions should not be made or should be calculated on a different basis or that an adjustment should be made notwithstanding that no such adjustment is required under the said provisions, the Company may appoint the Approved Adviser and/or the external auditors, to consider whether for any reason whatsoever the adjustments to be made (or the absence of any adjustment) or the adjustments to be made in accordance with these By-Laws is appropriate or inappropriate, as the case may be, and if such Approved Adviser and/or the external auditors shall consider the adjustment to be inappropriate, the adjustment shall be modified or nullified or any adjustment made in such manner as shall be considered by such Approved Adviser and/or the external auditors to be in its opinion appropriate and in accordance with the terms of this Scheme.

(iv) All adjustments (other than those made pursuant to bonus issue, subdivision or consolidation of shares) must be confirmed in writing either by the external auditors of the Company or the Approved Adviser for the time being, acting as an expert and not as an arbitrator. In addition, the Company shall, at the request of any Grantee, furnish such Grantee with a certificate from either an approved company auditor or the Approved Adviser confirming the adjustment, and such certification shall be final and binding on all parties. For the purpose of this Schedule, an approved company auditor shall have the meaning given in section 263 of the Act.

183

APPENDIX IV

SUMMARY INFORMATION ON THE LTIP

169

Commencement date : 1 December 2014

Duration of the scheme : Seven (7) years

Expiry date : 30 November 2021

Eligible grantees : A person who fulfils the following criteria as at the date of the offer shall be eligible to be considered an eligible employee:

(i) has attained the age of 18 years;

(ii) has entered into a full-time or fixed-term contract of employment with, and is on the payroll of our Company or any subsidiary of our Company which is not dormant and include such subsidiaries which are existing as at the effective date of the LTIP and those subsequently acquired or incorporated at any time during the LTIP period;

(iii) whose service has been confirmed in writing;

(iv) is not a non-executive or independent director of our Company; and

(v) has fulfilled any other eligibility criteria which has been determined by the LTIP committee in its discretion, as the case may be.

Maximum number of SEB Shares which may be issued under the scheme

: Up to five percent (5%) of the issued ordinary share capital of SEB at any point in time

Number of SEB Shares granted

: As at the LPD, our Company has not granted any new SEB Shares pursuant to the LTIP

Maximum allocation to senior management and/or Executive Directors

: Save for the allocation to the Executive Directors of 2.4%, there was no maximum allocation to the senior management of our Company.As at the LPD, our Company has not granted any new SEB Shares to the senior management and Executive Directors pursuant to the LTIP

Actual allocation to senior management and/or Executive Directors

: As at the LPD, our Company has not granted any new SEB Shares pursuant to the LTIP

184

APP

END

IX V

AM

END

MEN

TS T

O O

UR

CO

NST

ITU

TIO

N

170

Our

Con

stitu

tion

shal

l be

alte

red,

mod

ified

or a

men

ded

in th

e fo

llow

ing

man

ner:

CLA

USE

/A

RTI

CLE

SEX

ISTI

NG

PR

OVI

SIO

NS

AM

END

ED P

RO

VISI

ON

S

To d

elet

e C

laus

e 6

of

the

Mem

oran

dum

of

Asso

ciat

ion

“The

cap

ital

of t

he C

ompa

ny i

s R

M10

,000

,000

,000

.00

divi

ded

into

10

,000

,000

,000

sh

ares

of

R

M1.

00 e

ach.

The

sha

res

in th

e or

igin

al o

r an

y in

crea

sed

capi

tal

may

be

di

vide

d in

to

seve

ral

clas

ses

and

ther

e m

ay

be

atta

ched

ther

eto

resp

ectiv

ely

any

pref

eren

tial,

defe

rred

or

ot

her

spec

ial

right

s,

priv

ilege

s,

cond

ition

s or

res

trict

ions

as

to

divi

dend

s,

capi

tal,

votin

g or

ot

herw

ise.

”

Del

eted

To

amen

d C

laus

e 7

of t

he

Mem

oran

dum

of

Asso

ciat

ion

“Sub

ject

alw

ays

to th

e re

spec

tive

right

s,

term

s an

d co

nditi

ons

men

tione

d in

Cla

use

6 he

reof

the

Com

pany

sha

ll ha

ve p

ower

to

incr

ease

or r

educ

e th

e ca

pita

l, to

co

nsol

idat

e or

su

b-di

vide

th

e sh

ares

int

o sh

ares

of

larg

er o

r sm

alle

r am

ount

s an

d to

issu

e al

l or

any

par

t of t

he o

rigin

al o

r an

y ad

ditio

nal c

apita

l as

fully

pai

d or

pa

rtly

paid

sha

res,

and

with

any

sp

ecia

l or

pre

fere

ntia

l rig

hts

or

priv

ilege

s,

or

subj

ect

to

any

spec

ial

term

s or

con

ditio

ns a

nd

eith

er w

ith o

r with

out a

ny s

peci

al

desi

gnat

ion,

and

als

o fro

m t

ime

to t

ime

alte

r, m

odify

, co

mm

ute,

ab

roga

te o

r de

al w

ith a

ny s

uch

right

s,

priv

ilege

s,

term

s,

“The

Com

pany

sha

ll ha

ve p

ower

to in

crea

se o

r red

uce

the

capi

tal,

to c

onso

lidat

e or

sub

-div

ide

the

shar

es

into

sha

res

of la

rger

or s

mal

ler a

mou

nts

and

to is

sue

all o

r any

par

t of t

he o

rigin

al o

r any

add

ition

al c

apita

l as

fully

pai

d or

par

tly p

aid

shar

es, a

nd w

ith a

ny s

peci

al o

r pre

fere

ntia

l rig

hts

or p

rivile

ges,

or s

ubje

ct to

an

y sp

ecia

l ter

ms

or c

ondi

tions

and

eith

er w

ith o

r with

out a

ny s

peci

al d

esig

natio

n, a

nd a

lso

from

tim

e to

tim

e a

lter,

mod

ify,

com

mut

e, a

brog

ate

or d

eal

with

any

suc

h rig

hts,

priv

ilege

s, t

erm

s, c

ondi

tions

or

desi

gnat

ions

in a

ccor

danc

e w

ith th

e re

gula

tions

for t

he ti

me

bein

g of

the

Com

pany

.”

185

APP

END

IX V

AM

END

MEN

TS T

O O

UR

CO

NST

ITU

TIO

N (C

ont’d

)

171

cond

ition

s or

de

sign

atio

ns

in

acco

rdan

ce w

ith t

he r

egul

atio

ns

for

the

time

bein

g of

th

e C

ompa

ny.”

To a

men

d Ar

ticle

9 of

the

Arti

cles

of

Ass

ocia

tion

“Sub

ject

to

th

e Ac

t, an

y pr

efer

ence

sha

res

may

with

the

sa

nctio

n of

an

ordi

nary

reso

lutio

n of

sh

areh

olde

rs

in

gene

ral

mee

ting,

be

issu

ed o

n th

e te

rms

that

they

are

,or

at th

e op

tion

of

the

Com

pany

are

or w

ill be

liab

le,

to

be

rede

emed

an

d th

e C

ompa

ny

shal

l no

t is

sue

pref

eren

ce

shar

es

rank

ing

in

prio

rity

to th

e pr

efer

ence

sha

res

alre

ady

issu

ed,

but

may

iss

ue

pref

eren

ce

shar

es

rank

ing

equa

lly

ther

ewith

. Pr

efer

ence

sh

areh

olde

rs s

hall

be e

ntitl

ed to

are

turn

of

capi

tal i

n pr

efer

ence

to

hol

ders

of

ordi

nary

sha

res

in

the

even

t th

at t

he C

ompa

ny i

s w

ound

up,

sha

ll ha

ve t

he s

ame

right

s as

ord

inar

y sh

areh

olde

rs

as r

egar

ds t

o re

ceiv

ing

notic

es,

repo

rts

and

audi

ted

finan

cial

st

atem

ents

, an

d at

tend

ing

gene

ral

mee

tings

of

th

e C

ompa

ny a

nd s

hall a

lso

have

the

right

to

vo

te

at

any

mee

ting

conv

ened

in e

ach

of th

e fo

llow

ing

circ

umst

ance

s:-

“The

Com

pany

may

issu

e Is

lam

ic R

edee

mab

le C

onve

rtibl

e Pr

efer

ence

Sha

res

(“R

CPS

-i") w

hich

sha

ll co

nfer

on

the

hold

ers

of R

CPS

-i th

e fo

llow

ing

right

s:

1.Is

sue

date

A da

te to

be

dete

rmin

ed b

y th

e Bo

ard

of D

irect

ors

of th

e C

ompa

ny (“

Boa

rd”)

.

2.Is

sue

pric

e R

M0.

41 p

er R

CPS

-i.

3.Fo

rm

The

RC

PS-i

will

be

issu

ed in

regi

ster

ed fo

rm.

4.B

oard

lot

For

the

purp

ose

of t

radi

ng o

n th

e M

ain

Mar

ket

of B

ursa

Mal

aysi

a Se

curit

ies

Berh

ad ("

Bur

sa S

ecur

ities

"), a

boa

rd lo

t of R

CP

S-i

will

be10

0 R

CPS

-i.

5.Te

nure

Five

(5) y

ears

from

the

Issu

e D

ate.

6.St

ruct

ure

desc

riptio

n (a

)Th

e R

CP

S-ih

olde

rs s

hall

inve

st d

irect

ly in

to t

he B

usin

ess

(as

defin

ed in

pa

ragr

aph

8(c)

belo

w) t

hrou

gh th

e su

bscr

iptio

n of

the

RC

PS

-ito

be

issu

ed

by th

e C

ompa

ny.

(b)

The

Com

pany

will

issu

e th

e R

CP

S-i

to th

e su

bscr

iber

s of

the

RC

PS-

i. Th

e R

CP

S-i

shal

l re

pres

ent

the

undi

vide

d pr

opor

tiona

te

inte

rest

of

th

e re

spec

tive

RC

PS-

ihol

ders

in th

e Bu

sine

ss.

(c)

Prof

its (a

s de

fined

in p

arag

raph

8(a)

belo

w),

subj

ect t

o ite

m (e

) bel

ow, s

hall

be d

istri

bute

d as

pre

fere

ntia

l div

iden

ds to

the

RC

PS-i

hold

ers

in p

ropo

rtion

to

the

resp

ectiv

e ca

pita

l con

tribu

tion

of th

e R

CPS

-iho

lder

s in

the

Busi

ness

.

186

APP

END

IX V

AM

END

MEN

TS T

O O

UR

CO

NST

ITU

TIO

N (C

ont’d

)

172

a)w

hen

the

divi

dend

or

part

of

the

divi

dend

on

th

e pr

efer

ence

sh

ares

is

in

ar

rear

s fo

r m

ore

than

six

(6)

m

onth

s;

b)on

a p

ropo

sal t

o re

duce

the

C

ompa

ny’s

sha

re c

apita

l;

c)on

a p

ropo

sal f

or th

e di

spos

al

of

the

who

le

of

the

Com

pany

’s

prop

erty

, bu

sine

ss a

nd u

nder

taki

ng;

d)on

the

pro

posa

l th

at a

ffect

s rig

hts

atta

ched

to

th

e pr

efer

ence

sha

res;

e)on

a p

ropo

sal t

o w

ind-

up th

e C

ompa

ny; a

nd

f)du

ring

the

win

ding

-up

of t

he

Com

pany

.”

(d)

The

max

imum

am

ount

of

pr

efer

entia

l di

vide

nd

(i.e.

th

e Ex

pect

ed

Pref

eren

tial D

ivid

end

Amou

nt, a

s de

fined

in p

arag

raph

8(d)

belo

w) t

hat c

an

be d

ecla

red

and

paid

on

each

Pre

fere

ntia

l Div

iden

d En

title

men

t Dat

e (a

s de

fined

in p

arag

raph

9be

low

) sha

ll be

cap

ped

at th

e E

xpec

ted

Pref

eren

tial

Div

iden

d R

ate

(as

defin

ed i

n pa

ragr

aph

8(d)

belo

w),

unle

ss o

ther

wis

e de

cide

d by

the

Boa

rd p

ursu

ant t

o pa

ragr

aph

6(f)(

ii)be

low

. In

the

even

t tha

t th

e Pr

ofit

as a

t suc

h Pr

efer

entia

l Div

iden

d En

title

men

t Dat

e is

less

than

the

Expe

cted

Pre

fere

ntia

l Div

iden

d Am

ount

, the

Com

pany

may

, at i

ts d

iscr

etio

n,

decl

are

and

dist

ribut

e pr

efer

entia

l di

vide

nds

up t

o th

e am

ount

of

such

Pr

ofits

.

(e)

In th

e ev

ent t

hat d

ivid

ends

are

dec

lare

d, a

nd s

ubje

ct to

the

Boa

rd a

ppro

ving

su

ch d

ecla

ratio

n, t

he o

rdin

ary

shar

ehol

ders

shal

l w

aive

the

ir rig

ht t

o di

vide

nd p

aym

ent u

nles

s an

d un

til th

e C

ompa

ny h

as p

aid

any

pref

eren

tial

divi

dend

s de

clar

ed

but

unpa

id

or

Def

erre

d D

ivid

ends

(a

s de

fined

in

pa

ragr

aph

8(f)

belo

w)

to th

e R

CPS

-i ho

lder

s. F

or a

void

ance

of d

oubt

, it i

s ag

reed

that

the

pass

ing

of a

reso

lutio

n at

an

extra

ordi

nary

gen

eral

mee

ting

(“EG

M”)

of t

he o

rdin

ary

shar

ehol

ders

to a

men

d th

e C

onst

itutio

n (a

s de

fined

in

par

agra

ph8(

h)be

low

) (em

bedd

ing

the

right

s of

the

RC

PS-i

hold

ers)

, sha

ll re

pres

ent

thei

r ag

reem

ent

(in a

nd f

or c

ompl

ianc

e w

ith S

haria

h) f

or t

he

prio

rity

of d

istri

butio

n (o

f div

iden

ds) t

o be

dec

ided

by

the

Boar

d at

the

poin

t of

dis

tribu

tion

on th

eir b

ehal

f.

(f)O

n ea

ch P

refe

rent

ial D

ivid

end

Ent

itlem

entD

ate,

the

Com

pany

:

(i)m

ay, a

t its

dis

cret

ion,

dec

lare

and

dis

tribu

te p

refe

rent

ial d

ivid

end

up

to th

e Ex

pect

ed P

refe

rent

ial D

ivid

end

Amou

nt to

the

RC

PS-i

hold

ers,

su

bjec

t to

the

avai

labi

lity

of th

e Pr

ofits

.By

subs

crib

ing

to th

eR

CP

S-i,

the

RC

PS-i

hold

ers

shal

l (in

and

for c

ompl

ianc

e w

ith S

haria

h) w

aive

th

eir

right

to

rece

ive

any

Prof

its o

ver

and

abov

e th

e Ex

pect

ed

Pref

eren

tial D

ivid

end

Amou

nt th

at th

e Bo

ard

may

hav

e de

clar

ed; a

nd

(ii)

may

util

ise

any

Prof

it in

exc

ess

of (i

) abo

ve,f

or th

e Bu

sine

ss o

r suc

h ot

her

purp

ose

as t

he B

oard

dee

ms

fit,

incl

udin

g to

dec

lare

and

di

strib

ute

Addi

tiona

l Pre

fere

ntia

l Div

iden

d (a

s de

fined

in p

arag

raph

8(i)

belo

w).

187

APP

END

IX V

AM

END

MEN

TS T

O O

UR

CO

NST

ITU

TIO

N (C

ont’d

)

173(g

)Su

bjec

t to

the

appr

oval

of t

he B

oard

for t

he d

istri

butio

n, th

e R

CPS

-iho

lder

s sh

all h

ave

the

right

to re

ceiv

e ca

sh p

aym

ent i

n fu

ll w

hich

sha

ll be

equ

ival

ent

to a

ll th

e ca

pita

l pai

d up

on

the

RC

PS

-iby

the

resp

ectiv

e ho

lder

, and

any

pr

efer

entia

l div

iden

ds d

ecla

red

but u

npai

d up

on th

e di

ssol

utio

n, w

indi

ng-u

p or

liqu

idat

ion

of th

e C

ompa

ny o

ut o

f the

pro

ceed

s of

liqui

datio

n of

the

asse

ts

of th

e C

ompa

ny. T

he h

olde

rs o

f the

ord

inar

y sh

ares

and

all

othe

r cla

sses

of

shar

es (

if an

y) in

the

Com

pany

sha

ll w

aive

thei

r rig

ht to

rec

eive

pro

ceed

s fro

m li

quid

atio

n, d

isso

lutio

n or

win

ding

-up

in fa

vour

of t

heR

CPS

-iho

lder

s un

til th

e R

CP

S-ih

olde

rs h

ave

rece

ived

thei

r pay

men

t in

full

on a

ll th

e ca

pita

l pa

id u

p on

the

RC

PS

-iby

the

res

pect

ive

hold

er,

and

any

pref

eren

tial

divi

dend

s de

clar

ed b

ut u

npai

d. F

or a

void

ance

of d

oubt

, it i

s ag

reed

that

the

pass

ing

of a

reso

lutio

n at

an

EGM

of t

he o

rdin

ary

shar

ehol

ders

to a

men

d th

eC

onst

itutio

n(e

mbe

ddin

g th

e rig

hts

of t

he R

CPS

-iho

lder

s),

shal

l re

pres

ent

thei

r ag

reem

ent

(in a

nd f

or c

ompl

ianc

e w

ith S

haria

h) f

or t

he

prio

rity

of d

istri

butio

n (o

f ass

ets

upon

the

liqui

datio

n, d

isso

lutio

n or

win

ding

-up

of t

he C

ompa

ny) t

o be

dec

ided

by

the

Boa

rd a

t the

poi

nt o

f dis

tribu

tion

on th

eir b

ehal

f.

(h)

By

subs

crib

ing

to t

he R

CPS

-i, t

he R

CP

S-i

hold

ers

agre

e (in

and

for

co

mpl

ianc

e w

ith S

haria

h) to

wai

ve th

eir

right

s to

rec

eive

(i)

any

rem

aini

ng

pref

eren

tial

divi

dend

s de

clar

ed b

ut i

s un

paid

or

cann

ot b

e pa

id i

f th

e av

aila

ble

amou

nt o

f pro

ceed

s fro

m th

e liq

uida

tion,

dis

solu

tion

or w

indi

ng-u

pof

the

ass

ets

of t

he C

ompa

ny is

insu

ffici

ent

to p

ay in

ful

l the

pre

fere

ntia

l di

vide

nds

that

hav

e be

en d

ecla

red

but r

emai

ns u

npai

d an

d (ii

) any

Def

erre

d D

ivid

ends

that

hav

e no

t bee

n de

clar

ed b

y th

e C

ompa

ny, w

ith s

uch

wai

ver

to b

e de

cide

d by

the

Boa

rd a

t the

rele

vant

tim

e on

thei

r beh

alf.

(i)Th

e R

CP

S-ih

olde

rs u

nder

take

to s

ell t

he u

ndiv

ided

pro

porti

onat

e in

tere

st

of th

e re

spec

tive

RC

PS-

ihol

ders

in th

e B

usin

ess

on th

e R

edem

ptio

n D

ate

(as

defin

ed in

par

agra

ph15

(a)b

elow

) at t

he R

edem

ptio

n Pr

ice

(as

defin

ed

in p

arag

raph

15(b

)bel

ow) w

hich

sal

e sh

all b

e co

nclu

ded

by w

ay o

f con

duct

upon

pay

men

t of t

he R

edem

ptio

n Pr

ice

by th

e C

ompa

ny.

(j)O

n th

e M

atur

ity D

ate,

any

out

stan

ding

RC

PS

-i sh

all b

e co

nver

ted

into

fully

pa

id o

rdin

ary

shar

es i

n ac

cord

ance

with

the

Con

vers

ion

Rat

io,

with

out

paym

ent o

f any

con

side

ratio

n.

188

APP

END

IX V

AM

END

MEN

TS T

O O

UR

CO

NST

ITU

TIO

N (C

ont’d

)

174

7.R

anki

ng o

f R

CPS

-i(a

)R

anke

d eq

ually

am

ongs

t th

e R

CPS

-i an

d w

ith o

ther

pre

fere

nce

shar

es

issu

ed b

y th

e C

ompa

ny (i

f any

) with

out d

iscr

imin

atio

n, p

refe

renc

e or

prio

rity

amon

gst t

hem

selv

es in

all

resp

ects

.

(b)

Ran

ked

ahea

d in

poi

nt o

f prio

rity

to th

e ho

lder

s of

the

ordi

nary

sha

res

and

all o

ther

cla

sses

of s

hare

s (if

any

) in

the

Com

pany

, in

resp

ect o

f pay

men

t of

divi

dend

s an

d pa

ymen

t out

of a

sset

s of

the

Com

pany

upo

n an

y liq

uida

tion,

di

ssol

utio

n, o

r win

ding

-up

of th

e C

ompa

ny, p

rovi

ded

alw

ays

that

the

Boa

rd

appr

oves

suc

h pa

ymen

t of

div

iden

ds a

nd p

aym

ent

out

of a

sset

s of

the

C

ompa

ny o

n th

is b

asis

, an

d fu

rther

affi

rms

the

prio

rity

of p

aym

ent

as

desc

ribed

in th

is p

arag

raph

7.Fo

r avo

idan

ce o

f dou

bt, i

t is

agre

ed th

at th

e pa

ssin

g of

the

reso

lutio

n at

the

EGM

of t

he o

rdin

ary

shar

ehol

ders

to a

men

d th

eC

onst

itutio

n(e

mbe

ddin

g th

e rig

hts

of t

he R

CPS

-i ho

lder

s),

shal

l re

pres

ent t

heir

agre

emen

t in

and

for c

ompl

ianc

e w

ith S

haria

h, fo

r the

prio

rity

of d

istri

butio

n di

vide

nds

and

paym

ent

out

of a

sset

s to

be

deci

ded

by t

he

Boar

d at

the

poin

t of d

istri

butio

n, o

n th

eir b

ehal

f.

(c)

Subo

rdin

ated

to a

ll th

e C

ompa

ny’s

cre

dito

rs in

resp

ect o

f pay

men

t of d

ebt

and

paym

ents

ou

t of

as

sets

of

th

e C

ompa

ny

upon

an

y liq

uida

tion,

di

ssol

utio

n, o

r win

ding

-up

of th

e C

ompa

ny.

(d)

The

Boar

d sh

all n

ot is

sue

any

pref

eren

ce s

hare

s w

hich

rank

equ

ally

with

or

in p

riorit

y to

, the

RC

PS

-i, u

nles

s th

e is

sue

of s

uch

pref

eren

ce s

hare

s ha

s fir

st b

een

appr

oved

by

the

hold

ers

of t

he R

CP

S-i

by w

ay o

f an

ord

inar

y re

solu

tion

of s

uch

hold

ers.

8.Ex

pect

ed

Pref

eren

tial

Div

iden

d R

ate

Div

iden

d

(a)

The

RC

PS-

i sha

ll ca

rry

the

right

to re

ceiv

e pr

efer

entia

l div

iden

ds, o

ut o

f the

di

strib

utab

le p

rofit

s of

the

Com

pany

ear

ned

from

the

first

day

of t

he c

alen

dar

mon

th fo

llow

ing

the

Issu

e D

ate

("Pr

ofits

"), w

hen

decl

ared

and

app

rove

d by

th

e Bo

ard.

Any

dec

lara

tion

of p

refe

rent

ial d

ivid

end

shal

l be

subj

ect t

o th

e C

ompa

ny c

ompl

ying

with

any

cov

enan

ts th

at m

ay b

e ap

plic

able

from

tim

e to

tim

e an

d th

e ap

prov

al o

f th

e Bo

ard.

Suc

h ap

prov

al s

hall

incl

ude

an

affir

mat

ion

on th

e pr

iorit

y of

pay

men

t as

desc

ribed

in p

arag

raph

7ab

ove.

189

APP

END

IX V

AM

END

MEN

TS T

O O

UR

CO

NST

ITU

TIO

N (C

ont’d

)

175(b

)Su

bjec

t to

com

plia

nce

with

par

agra

ph10

(a)

belo

w,

the

Com

pany

sha

ll ut

ilize

and

exh

aust

the

ret

aine

d ea

rnin

gs o

f th

e C

ompa

ny e

arne

d fo

r th

e pe

riod

prio

r to

the

Iss

ue D

ate

("Pr

e-Is

sue

Ret

aine

d Ea

rnin

gs")

for

the

pa

ymen

t of d

ivid

ends

to th

e or

dina

ry s

hare

hold

ers,

and

if s

uch

Pre-

Issu

e R

etai

ned

Ear

ning

s ar

e in

suffi

cien

t fo

r th

e pa

ymen

t of

div

iden

ds t

o th

e or

dina

ry s

hare

hold

ers,

the

Com

pany

may

als

o ut

ilize

the

Prof

its (

less

any

pr

efer

entia

l div

iden

ds d

ecla

red

but u

npai

d an

d an

y D

efer

red

Div

iden

ds) f

or

such

pay

men

t.

(c)

Prof

its s

hall

be d

istri

bute

d as

pre

fere

ntia

l div

iden

ds to

the

RC

PS

-i ho

lder

s in

pro

porti

on to

the

resp

ectiv

e ca

pita

l con

tribu

tion

of th

e R

CPS

-i ho

lder

s in

th

eSh

aria

h-co

mpl

iant

gen

eral

bus

ines

s of

the

Com

pany

("B

usin

ess"

).

(d)

The

expe

cted

pre

fere

ntia

l div

iden

d ra

te p

er a

nnum

sha

ll be

fiv

e pe

rcen

t (5

%)p

er a

nnum

(“Ex

pect

ed P

refe

rent

ial D

ivid

end

Rat

e”).

The

max

imum

am

ount

of

pref

eren

tial d

ivid

ends

that

can

be

decl

ared

and

pa

id

on

each

Pr

efer

entia

l D

ivid

end

Ent

itlem

ent

Dat

e ("

Expe

cted

Pr

efer

entia

l D

ivid

end

Am

ount

"),

shal

l be

cap

ped

at s

uch

Expe

cted

Pr

efer

entia

l Div

iden

d R

ate.

The

Com

pany

may

dec

lare

add

ition

al d

ivid

ends

in

the

circ

umst

ance

s se

t out

in p

arag

raph

8(i)

, 8(j)

and

8(l)

bel

ow,

Def

erre

d D

ivid

ends

/ N

on P

aym

ent o

f Pre

fere

ntia

l Div

iden

ds

(e)

On

any

Pref

eren

tial D

ivid

end

Entit

lem

entD

ate:

(i)in

the

even

t tha

t the

Pro

fits

are

low

er th

an th

e Ex

pect

ed P

refe

rent

ial

Div

iden

d Am

ount

and

the

Com

pany

doe

s no

t dec

lare

the

pref

eren

tial

divi

dend

s up

to th

e Ex

pect

ed P

refe

rent

ial D

ivid

end

Amou

nt (i

n w

hole

or

in p

art):

(aa)

the

Com

pany

may

, at

its

dis

cret

ion,

dec

lare

and

pay

any

am

ount

of p

refe

rent

ial d

ivid

ends

up

to a

n am

ount

equ

al to

the

Prof

its a

s at

suc

h Pr

efer

entia

l Div

iden

d En

title

men

tDat

e. (T

he

amou

nt o

f Pr

ofits

dec

lare

d as

pre

fere

ntia

l di

vide

nds

by t

he

Com

pany

on

a pa

rticu

lar

Pref

eren

tial

Div

iden

d En

title

men

tD

ate,

if a

ny, s

hall

be re

ferr

ed to

as

"Dec

lare

d Su

m")

; and

190

APP

END

IX V

AM

END

MEN

TS T

O O

UR

CO

NST

ITU

TIO

N (C

ont’d

)

176

(bb)

the

amou

nt e

quiv

alen

t to

the

diffe

renc

e be

twee

n: (A

) the

Pro

fits

as a

t su

ch P

refe

rent

ial

Div

iden

d En

title

men

tD

ate;

and

(B)

D

ecla

red

Sum

, sha

ll be

cum

ulat

ive

("D

efer

red

Div

iden

ds 1

"),

so lo

ng a

s th

e R

CPS

-i re

mai

ns u

nred

eem

ed. I

n th

is in

stan

ce,

the

amou

nt e

quiv

alen

t to

the

diff

eren

ce b

etw

een:

(A)

the

Ex

pect

ed P

refe

rent

ial D

ivid

end

Amou

nt; a

nd (B

) the

Pro

fits

as

at s

uch

Pref

eren

tial

Div

iden

d En

title

men

tD

ate,

sha

ll no

t be

cu

mul

ativ

e; a

nd

(ii)

in th

e ev

ent t

hat t

he P

rofit

s ar

e m

ore

than

the

Expe

cted

Pre

fere

ntia

l D

ivid

end

Amou

nt a

nd th

e C

ompa

nydo

es n

ot d

ecla

re th

e pr

efer

entia

l di

vide

nds

up to

the

Expe

cted

Pre

fere

ntia

l Div

iden

d A

mou

nt (i

n w

hole

or

in p

art):

(a

a)th

e am

ount

equ

ival

ent

to t

he d

iffer

ence

bet

wee

n: (

A) t

he

Expe

cted

Pre

fere

ntia

l Div

iden

d Am

ount

; and

(B)

the

Dec

lare

d Su

m, s

hall

be c

umul

ativ

e ("

Def

erre

d D

ivid

ends

2")

, so

long

as

the

RC

PS-

i rem

ains

unr

edee

med

.

(f)D

efer

red

Div

iden

ds 1

and

Def

erre

d D

ivid

ends

2 (

as t

he c

ase

may

be)

("

Def

erre

d D

ivid

ends

") m

ay b

e de

clar

ed a

nd/o

r pa

id, a

t the

dis

cret

ion

of

the

Com

pany

, on

any

subs

eque

nt P

refe

rent

ial D

ivid

end

Entit

lem

entD

ate,

pr

ovid

ed t

hat

the

Cum

ulat

ive

Con

ditio

n is

ful

fille

d on

suc

h Pr

efer

entia

l D

ivid

end

Entit

lem

entD

ate.

"Cum

ulat

ive

Con

ditio

n"

of

the

RC

PS

-i m

eans

on

an

y pa

rticu

lar

Pref

eren

tial D

ivid

end

Ent

itlem

entD

ate,

the

Com

pany

:

(i)ha

s su

ffici

ent P

rofit

s th

at is

at l

east

equ

ival

ent t

o th

e ag

greg

ate

of: (

A)

the

Dec

lare

d Su

m; a

nd (B

) an

y D

efer

red

Div

iden

ds a

ccum

ulat

ed a

s at

and

on

such

Pre

fere

ntia

l Div

iden

d En

title

men

tDat

e;

(ii)

has

mai

ntai

ned

book

s an

d re

cord

s th

at e

vide

nce

the

Com

pany

ha

ving

Pro

fits

that

is a

t lea

st e

quiv

alen

t to

the

aggr

egat

e of

: (A)

the

Dec

lare

d Su

m; a

nd (

B) a

ny D

efer

red

Div

iden

ds a

ccum

ulat

ed a

s at

an

d on

suc

h Pr

efer

entia

l Div

iden

d E

ntitl

emen

tDat

e; a

nd

191

APP

END

IX V

AM

END

MEN

TS T

O O

UR

CO

NST

ITU

TIO

N (C

ont’d

)

177

(iii)

mak

es a

n an

noun

cem

ent

on t

he M

ain

Mar

ket

of B

ursa

Sec

uriti

es

that

su

ch

amou

nt

of

Def

erre

d D

ivid

ends

on

su

ch

Pref

eren

tial

Div

iden

d En

title

men

tDat

e sh

all b

e cu

mul

ativ

e.

(g)

The

Def

erre

d D

ivid

ends

sha

ll no

t be

paya

ble

to th

e R

CPS

-iho

lder

s if

the

Com

pany

has

not

dec

lare

d it

as a

pre

fere

ntia

l di

vide

nd.

For

clar

ity,

the

Def

erre

d D

ivid

ends

tha

t ar

e no

t de

clar

ed w

ill no

t be

pay

able

in

the

follo

win

gci

rcum

stan

ces:

(i)up

on t

he w

indi

ng-u

p, l

iqui

datio

n or

dis

solu

tion

of t

he C

ompa

ny.

Acco

rdin

gly,

the

RC

PS

-iho

lder

s sh

all (

in a

nd f

or c

ompl

ianc

e w

ith

Shar

iah,

and

by

the

deci

sion

of t

he B

oard

at t

he re

leva

nt ti

me

on th

eir

beha

lf) w

aive

all

Def

erre

d D

ivid

ends

tha

t th

e C

ompa

ny h

as n

ot

decl

ared

; and

(ii)

upon

the

RC

PS

-iho

lder

s co

nver

ting

the

RC

PS-i

to o

rdin

ary

shar

es.

Acco

rdin

gly,

the

RC

PS

-iho

lder

s sh

all (

in a

nd f

or c

ompl

ianc

e w

ith

Shar

iah)

wai

ve a

ll D

efer

red

Div

iden

ds t

hat

the

Com

pany

has

not

de

clar

ed.

(h)

Whe

re t

here

are

no

Prof

its a

vaila

ble

for

the

decl

arat

ion

and

paym

ent

of

divi

dend

s (in

ac

cord

ance

w

ith

the

Con

stitu

tion

of

the

Com

pany

("

Con

stitu

tion"

) an

d th

e C

ompa

nies

Ac

t 20

16

(or

such

ap

plic

able

le

gisl

atio

n fo

r the

tim

e be

ing)

("C

ompa

nies

Act

")),

the

Com

pany

sha

ll ha

ve

no o

blig

atio

n to

dec

lare

or

dist

ribut

e an

y pr

efer

entia

l di

vide

nds

on t

he

rele

vant

Pre

fere

ntia

l Div

iden

d En

title

men

tDat

e. S

uch

pref

eren

tial d

ivid

ends

sh

all n

ot b

e cu

mul

ativ

e.

192

APPE

ND

IX V

AMEN

DM

ENTS

TO

OU

R C

ON

STIT

UTIO

N (C

ont’d

)

178E

xces

s of

Pro

fits

(i)O

n an

y Pr

efer

entia

l Div

iden

d En

title

men

tDat

e, in

the

even

t tha

t the

Pro

fits

are

mor

e th

an th

e Ex

pect

ed P

refe

rent

ial D

ivid

end

Amou

nt a

nd th

e C

ompa

ny

decl

ares

an

d di

strib

utes

pr

efer

entia

l di

vide

nds

up

to

the

Expe

cted

Pr

efer

entia

l D

ivid

end

Amou

nt,

any

exce

ss

of

the

Prof

its

afte

r su

ch

decl

arat

ion

may

be

utiliz

ed b

y th

e C

ompa

ny fo

r the

Bus

ines

s or

suc

h ot

her

purp

ose

as th

e Bo

ard

at it

s so

le d

iscr

etio

n de

ems

fit a

nd in

the

inte

rest

of

the

Com

pany

, in

clud

ing

to d

ecla

re a

nd d

istri

bute

add

ition

al p

refe

rent

ial

divi

dend

s of

suc

h am

ount

as

the

Boar

d de

ems

fit th

at is

in e

xces

s of

the

Expe

cted

Pre

fere

ntia

l Div

iden

d Am

ount

but

not

exc

eedi

ng t

he P

rofit

s on

su

ch P

refe

rent

ial

Div

iden

d En

title

men

tD

ate

or t

o re

deem

any

RC

PS-i

("Ad

ditio

nal P

refe

rent

ial D

ivid

end"

).

(j)At

the

Pre

fere

ntia

l Div

iden

d En

title

men

t D

ate

imm

edia

tely

pre

cedi

ng t

he

mat

urity

dat

e, w

hich

is th

e da

y im

med

iate

ly p

rece

ding

the

5than

nive

rsar

y fro

m th

e Is

sue

Dat

e (“

Mat

urity

Dat

e”),

prio

r to

con

vers

ion

of th

e R

CPS

-i,

the

Com

pany

may

, at i

ts d

iscr

etio

n,de

clar

e, to

the

exte

nt th

ere

are

Prof

its

avai

labl

e fo

r dis

tribu

tion,

to th

e R

CPS

-i ho

lder

s:

(i)Ex

pect

ed P

refe

rent

ial D

ivid

end

Amou

nt;

(ii)

Def

erre

d D

ivid

ends

; and

/or

(iii)

incr

emen

tal p

refe

rent

ial d

ivid

end

(sub

ject

a m

axim

um e

ffect

ive

retu

rn o

f te

n pe

rcen

t (10

%)

per

annu

mco

mpu

ted

base

d on

the

inte

rnal

rat

e of

re

turn

form

ula

(“Ef

fect

ive

Ret

urn”

),fro

m th

e Is

sue

Dat

e an

d up

to th

e M

atur

ity D

ate,

and

afte

r tak

ing

into

acc

ount

all:

(aa)

Ex

pect

ed P

refe

rent

ial D

ivid

end

Amou

nt;

(bb)

D

efer

red

Div

iden

ds;

(cc)

Addi

tiona

l Pre

fere

ntia

l Div

iden

d; a

nd

(dd)

Spec

ial P

refe

rent

ial D

ivid

end,

193

APP

END

IX V

AM

END

MEN

TS T

O O

UR

CO

NST

ITU

TIO

N (C

ont’d

)

179

(item

s (a

a) t

o (d

d) a

bove

are

col

lect

ivel

y re

ferr

ed t

o as

“Pr

efer

entia

l D

ivid

end”

) dec

lare

d an

d pa

id u

p to

the

Mat

urity

Dat

e an

d th

e di

ffere

nce

betw

een

the

Issu

e Pr

ice

and

the

30-d

ay v

olum

e w

eigh

ted

aver

age

mar

ket

pric

e of

the

Com

pany

’s o

rdin

ary

shar

es p

rior

to t

he s

aid

Pref

eren

tial D

ivid

end

Ent

itlem

ent D

ate)

.

Pos

t-Con

vers

ion

(k)

Each

RC

PS-i

hold

er s

hall

ceas

e to

rece

ive

any

pref

eren

tial d

ivid

ends

from

an

d in

clud

ing

the

date

the

RC

PS

-i is

con

verte

d in

to N

ew O

rdin

ary

Shar

es

(as

defin

ed i

n pa

ragr

aph

11(a

)be

low

) sa

ve f

or p

refe

rent

ial

divi

dend

s de

clar

ed

and

unpa

id

(incl

udin

g D

efer

red

Div

iden

ds

(as

expl

aine

d in

pa

ragr

aph

11(d

) bel

ow) u

p to

the

date

of t

he c

onve

rsio

n).

Spec

ial D

ivid

end

(l)Th

e C

ompa

ny m

ay u

tiliz

e th

e Pr

e-Is

sue

Ret

aine

d Ea

rnin

gs a

t its

sol

e di

scre

tion

if it

deem

s fit

and

in th

e in

tere

st o

f the

Com

pany

, to

decl

are

and

dist

ribut

e ad

ditio

nal

pref

eren

tial

divi

dend

s of

suc

h am

ount

as

the

Boar

d de

ems

fit ("

Spec

ial P

refe

rent

ial D

ivid

end"

).

9.D

ivid

end

entit

lem

ent

perio

d

Subj

ect

to

the

avai

labi

lity

of

Prof

its,

the

pref

eren

tial

divi

dend

s sh

all

be

dist

ribut

able

sem

i-ann

ually

(sa

ve in

res

pect

of

the

first

dis

tribu

tion)

, w

ith t

he

RC

PS-

i hol

ders

bei

ng e

ntitl

ed to

the

first

dis

tribu

tion

no la

ter t

han

six

(6) m

onth

s fo

llow

ing

the

Issu

e D

ate,

and

sub

sequ

ently

, at s

ucce

ssiv

e in

terv

als

of e

very

six

(6

) mon

ths

ther

eafte

r (ea

ch o

f the

afo

rem

entio

ned

date

s sh

all b

e re

ferr

ed to

as

"Pre

fere

ntia

lDiv

iden

d En

title

men

t Dat

e").

10.R

estr

ictio

ns

on p

aym

ent o

f di

vide

nds

to

ordi

nary

sh

ares

(a)

So l

ong

as a

ny R

CPS

-i re

mai

ns u

nred

eem

ed,

and

in t

he e

vent

tha

t di

vide

nds

are

decl

ared

and

the

pre

fere

ntia

l tre

atm

ent

is a

ppro

ved

by t

he

Boar

d on

the

day

of th

e di

vide

nd d

ecla

ratio

n, th

e C

ompa

ny s

hall

not p

ay o

r di

strib

ute

any

divi

dend

on

its o

rdin

ary

shar

es,

unle

ss t

he p

refe

rent

ial

divi

dend

pay

able

on

the

RC

PS-i

for t

he p

erio

d im

med

iate

ly p

rece

ding

such

or

dina

ry s

hare

div

iden

d an

d an

y pr

efer

entia

l div

iden

ds d

ecla

red

but u

npai

d or

Def

erre

d D

ivid

ends

, has

bee

n pa

id o

r oth

erw

ise

prov

ided

for i

n fu

ll.

194

APP

END

IX V

AM

END

MEN

TS T

O O

UR

CO

NST

ITU

TIO

N (C

ont’d

)

180(b

)In

the

even

t tha

t div

iden

ds a

re d

ecla

red,

and

sub

ject

to th

e B

oard

app

rovi

ng

the

paym

ent a

nd a

ffirm

ing

the

prio

rity

of p

aym

ent a

s de

scrib

ed in

par

agra

ph7,

the

ord

inar

y sh

areh

olde

rs s

hall

wai

ve t

heir

right

to

divi

dend

pay

men

t, un

less

and

unt

il th

e C

ompa

ny h

as p

aid

such

pre

fere

ntia

l div

iden

ds d

ecla

red

but u

npai

d or

Def

erre

d D

ivid

end

to th

e R

CPS

-i ho

lder

s. F

or a

void

ance

of

doub

t, it

is a

gree

d th

at t

he p

assi

ng o

f th

e re

solu

tion

at t

he E

GM

of

the

ordi

nary

sha

reho

lder

s to

am

end

the

Con

stitu

tion

(em

bedd

ing

the

right

s of

th

e R

CP

S-i

hold

ers)

, sha

ll re

pres

ent t

heir

agre

emen

t in

and

for c

ompl

ianc

e w

ith S

haria

h, fo

r th

e pr

iorit

y of

dis

tribu

tion

(of d

ivid

ends

) to

be

deci

ded

by

the

Boar

d at

the

poin

t of d

istri

butio

n on

thei

r beh

alf.

11

.Con

vers

ion

right

sC

onve

rsio

n R

ight

s

(a)

The

fully

pai

d-up

RC

PS

-i sh

all b

e co

nver

tible

into

suc

h nu

mbe

r of f

ully

-pai

d or

dina

ry

shar

es

of

the

Com

pany

("

New

O

rdin

ary

Shar

es")

, w

ithou

t pa

ymen

t of a

ny c

onsi

dera

tion

and

in a

ccor

danc

e w

ith th

e C

onve

rsio

n R

atio

("

Con

vers

ion

Rig

ht")

at M

atur

ity D

ate.

(b)

Subj

ect t

o co

mpl

ianc

e w

ith a

ll app

licab

le la

ws

and

regu

latio

ns, t

he C

ompa

ny

shal

l tak

e su

ch re

quis

itest

eps

to a

llot a

nd is

sue

the

New

Ord

inar

y Sh

ares

, ap

ply

for t

he li

stin

g of

and

quo

tatio

n fo

r the

New

Ord

inar

y S

hare

s an

d cr

edit

the

New

Ord

inar

y Sh

ares

into

the

hold

er's

sec

uriti

es a

ccou

nt c

reat

ed w

ith

the

Cen

tral D

epos

itory

Sys

tem

pur

suan

t to

the

Sec

uriti

es In

dust

ry (C

entra

l D

epos

itorie

s) A

ct 1

991

and

the

Rul

es o

f Bur

sa M

alay

sia

Dep

osito

ry S

dn.

Bhd.

, fo

r th

e re

cord

ing

of d

epos

it of

sec

uriti

es a

nd f

or d

ealin

g in

suc

h se

curit

ies

by th

e de

posi

tor.

No

phys

ical

sha

re c

ertif

icat

es w

ill b

e is

sued

to

the

RC

PS

-i ho

lder

in re

spec

t of t

he c

onve

rsio

n.

(c)

The

Com

pany

sha

ll not

be

requ

ired

to c

onve

rt an

y R

CP

S-i

of a

hol

der w

here

co

nver

sion

of t

he R

CPS

-iw

ould

be

cont

rary

to th

e la

ws

of M

alay

sia.

(d)

Not

with

stan

ding

the

Con

vers

ion

Rig

ht, t

he R

CP

S-i

shal

l rem

ain

entit

led

to

any

Def

erre

d D

ivid

ends

tha

t ha

ve n

ot b

een

decl

ared

as

pref

eren

tial

divi

dend

s as

at t

he M

atur

ity D

ate,

whi

ch s

hall

be p

aid

in a

ccor

danc

e w

ithth

e pr

ovis

ions

of p

arag

raph

10(

b) a

bove

.

195

APP

END

IX V

AM

END

MEN

TS T

O O

UR

CO

NST

ITU

TIO

N (C

ont’d

)

181

12.C

onve

rsio

n ra

tio(a

)Th

e co

nver

sion

ratio

of t

he R

CP

S-i

is o

ne (1

) New

Ord

inar

y Sh

are

for e

very

on

e (1

) RC

PS

-i he

ld, o

r suc

h ot

her r

evis

ed c

onve

rsio

n ra

tio th

at th

e Bo

ard

may

dec

ide

at a

late

r dat

e (“

Con

vers

ion

Rat

io”)

.

(b)

If th

e co

nver

sion

resu

lts in

a fr

actio

nal e

ntitl

emen

t to

New

Ord

inar

y Sh

ares

, su

ch f

ract

iona

l ent

itlem

ent

shal

l be

disr

egar

ded

and

no r

efun

d or

cre

dit,

whe

ther

in th

e fo

rm o

f RC

PS

-i, c

ash

or o

ther

wis

e, s

hall

be g

iven

in re

spec

t of

the

disr

egar

ded

fract

iona

l ent

itlem

ent.

13.A

djus

tmen

t to

th

e C

onve

rsio

n R

atio

The

Con

vers

ion

Rat

io s

hall

be s

ubje

ct to

adj

ustm

ents

from

tim

e to

tim

e, a

t the

de

term

inat

ion

of th

e B

oard

, in

the

even

t of a

ny a

ltera

tion

to th

e C

ompa

ny’s

sha

re

capi

tal,

whe

ther

by

way

of

right

s is

sue,

cap

italis

atio

n is

sue,

con

solid

atio

n of

sh

ares

, sub

divi

sion

of s

hare

s or

redu

ctio

n of

cap

ital h

owso

ever

bei

ngef

fect

ed,

in a

ccor

danc

e w

ith th

e pr

ovis

ions

of t

he C

onst

itutio

n. T

he C

ompa

ny s

hall

give

no

tice

in w

ritin

g to

the

RC

PS

-i ho

lder

s of

its

inte

ntio

n to

mak

e su

ch a

djus

tmen

ts

to th

e C

onve

rsio

n R

atio

.

14.R

anki

ng

of

New

Ord

inar

y Sh

ares

co

nver

ted

from

RC

PS-i

The

New

Ord

inar

y S

hare

s sh

all u

pon

allo

tmen

t an

d is

sue

rank

equ

ally

in a

ll re

spec

ts w

ith t

he t

hen

issu

ed o

rdin

ary

shar

es o

f th

e C

ompa

ny in

clud

ing

the

entit

lem

ents

to d

ivid

ends

, rig

hts,

allo

tmen

ts o

r ot

her

dist

ribut

ions

, exc

ept

that

th

ey s

hall

not

be e

ntitl

ed t

o an

y di

vide

nds,

rig

hts,

allo

tmen

ts a

nd/o

r ot

her

dist

ribut

ions

,of w

hich

the

entit

lem

ent d

ate

is b

efor

e th

e da

te o

f allo

tmen

t of s

uch

New

Ord

inar

y S

hare

s.

15.R

edem

ptio

n(a

)Th

e C

ompa

ny m

ay a

t any

tim

e af

ter t

he Is

sue

Dat

e, a

t its

dis

cret

ion,

rede

em

who

lly o

r in

par

t on

a pr

o ra

ta b

asis

the

outs

tand

ing

RC

PS

-i by

giv

ing

not

less

tha

n th

irty

(30)

days

’ no

tice

in w

ritin

g to

the

RC

PS-i

hold

ers

of i

ts

inte

ntio

n to

do

so, s

ubje

ct to

com

plia

nce

with

the

Com

pani

es A

ct, i

nclu

ding

w

here

suc

h R

CPS

-i is

inte

nded

to

be r

edee

med

out

of

the

capi

tal o

f th

e C

ompa

ny, s

uch

notic

e of

rede

mpt

ion

shal

l be

subj

ect t

o al

l dire

ctor

s of

the

Com

pany

hav

ing

mad

e a

solv

ency

sta

tem

ent i

n re

latio

n to

suc

h re

dem

ptio

n in

acc

orda

nce

with

the

prov

isio

ns o

f the

Com

pani

es A

ct. T

he re

dem

ptio

n of

th

e R

CPS

-i sh

all t

ake

effe

ct o

n th

e 30

th d

ay fr

om th

e da

te o

f the

not

ice

or

such

oth

er l

ater

dat

e as

may

be

spec

ified

in

the

notic

e ("

Red

empt

ion

Dat

e").

The

Red

empt

ion

Dat

e an

d bo

ok c

losu

re d

ate

to b

e us

ed t

o de

term

ine

the

RC

PS

-i ho

lder

s w

ho a

re e

ntitl

ed to

rec

eive

the

rede

mpt

ion

paym

ent s

hall

be s

tate

d in

the

notic

e.

196

APP

END

IX V

AM

END

MEN

TS T

O O

UR

CO

NST

ITU

TIO

N (C

ont’d

)

182(b

)O

nth

e R

edem

ptio

n D

ate,

if

the

Com

pany

de

cide

s to

re

deem

th

e ou

tsta

ndin

g R

CPS

-ias

des

crib

ed in

item

(a)

abo

ve, t

he r

edem

ptio

n pr

ice,

pa

yabl

e in

cas

h,sh

all b

e th

e ag

greg

ate

of: (

i) th

e Is

sue

Pric

e of

the

RC

PS

-i;

(ii)

any

pref

eren

tial d

ivid

ends

dec

lare

d bu

t unp

aid

as a

t the

Red

empt

ion

Dat

e; (

iii) a

ny D

efer

red

Div

iden

ds a

s at

the

Red

empt

ion

Dat

e; a

nd (

iv)

a re

dem

ptio

n ad

just

men

t tha

t yie

lds

an E

ffect

ive

Ret

urn

from

the

Issu

e D

ate

and

up t

o th

e R

edem

ptio

n D

ate,

out

of

the

dist

ribut

able

pro

fits

of t

he

Com

pany

and

afte

r ta

king

int

o ac

coun

t (i)

, (ii

) an

d (ii

i) ab

ove

and

all

Pref

eren

tial

Div

iden

d de

clar

ed a

nd p

aid

up t

o th

e R

edem

ptio

n D

ate

("R

edem

ptio

n Pr

ice"

).

(c)

The

Com

pany

sha

ll no

t red

eem

any

RC

PS

-i of

a h

olde

r whe

re re

dem

ptio

n of

the

RC

PS

-i w

ould

be

cont

rary

to th

e la

ws

of M

alay

sia

or th

e C

onst

itutio

n.

(d)

The

RC

PS

-i ho

lder

s sh

all s

ell t

he u

ndiv

ided

pro

porti

onat

e in

tere

st o

f th

e re

spec

tive

RC

PS

-i ho

lder

s in

the

Busi

ness

on

the

Red

empt

ion

Dat

e to

the

Com

pany

at

the

Red

empt

ion

Pric

e, a

nd p

ursu

ant

to t

he r

edem

ptio

n an

dpa

ymen

t of t

he R

edem

ptio

n Pr

ice

on th

e R

edem

ptio

n D

ate

for t

he R

CP

S-i

rede

emed

, al

l rig

hts,

ben

efits

and

ent

itlem

ents

acc

orde

d to

suc

h R

CP

S-i

hold

ers,

sha

ll ce

ase.

(e)

Upo

n re

dem

ptio

n of

the

RC

PS

-i, t

he R

CPS

-i ho

lder

s sh

all

(in a

nd f

or

com

plia

nce

with

Sha

riah)

wai

ve th

eir r

ight

s to

rece

ive

any

Prof

it th

at h

as n

ot

been

dec

lare

d as

pre

fere

ntia

l div

iden

d by

the

Com

pany

and

whi

ch d

o no

t fo

rm a

ny p

art o

f the

Def

erre

d D

ivid

ends

from

the

perio

d be

ginn

ing

on th

e la

st d

ivid

end

decl

arat

ion

date

pre

cedi

ng t

he R

edem

ptio

n D

ate

up t

o th

e R

edem

ptio

n D

ate.

By

subs

crib

ing

to th

e R

CP

S-i,

the

RC

PS-i

hold

ers

agre

e (in

and

for

com

plia

nce

with

Sha

riah)

to th

is w

aive

r w

ith s

uch

wai

ver

to b

e de

cide

d by

the

Boar

d at

the

poin

t of r

edem

ptio

n on

thei

r beh

alf.

16.P

artic

ipat

ion

in p

rofit

sSu

bjec

t to

the

right

s to

the

pref

eren

tial d

ivid

ends

and

any

Add

ition

al P

refe

rent

ial

Div

iden

ds, t

he R

CP

S-i

hold

ers

shal

l not

be

entit

led

to p

artic

ipat

e in

the

surp

lus

prof

its (

if an

y) r

emai

ning

at

such

tim

e af

ter

the

paym

ent

of t

he p

refe

rent

ial

divi

dend

s an

d su

ch A

dditi

onal

Pre

fere

ntia

l Div

iden

ds (i

f any

).

197

APP

END

IX V

AM

END

MEN

TS T

O O

UR

CO

NST

ITU

TIO

N (C

ont’d

)

183

17.L

iqui

datio

n,

diss

olut

ion

or

win

ding

-up

pref

eren

ce

(a)

On

a re

turn

of

capi

tal o

n th

e di

ssol

utio

n, w

indi

ng-u

p or

liqu

idat

ion

of t

he

Com

pany

, th

e R

CP

S-i

hold

ers

shal

l ha

ve,

in p

riorit

y to

the

hol

ders

of

ordi

nary

sha

res

and

all o

ther

cla

sses

of s

hare

s (if

any

) in

the

Com

pany

, the

rig

ht t

o pa

ymen

t of

: (i)

all

capi

tal

paid

up

on t

he R

CPS

-i; a

nd (

ii) a

ny

pref

eren

tial d

ivid

ends

dec

lare

d bu

t un

paid

, bu

t sh

all h

ave

no r

ight

to

the

resi

due

(if a

ny) o

f suc

h su

rplu

s as

sets

that

sha

ll re

mai

n af

ter p

aym

ent o

f the

ca

pita

l pai

d up

on

all o

ther

cla

sses

of s

hare

s in

the

Com

pany

.

(b)

Subj

ect

to t

he a

ppro

val

of t

he B

oard

for

the

dis

tribu

tion,

the

hol

ders

of

ordi

nary

sha

res

and

all o

ther

cla

sses

of s

hare

s (if

any

) in

the

Com

pany

shal

l w

aive

thei

r rig

ht to

rece

ive

proc

eeds

from

liqu

idat

ion,

dis

solu

tion

or w

indi

ng-

up f

or t

he b

enef

it of

the

RC

PS-

iho

lder

s un

til t

he R

CP

S-i

hold

ers

have

re

ceiv

ed th

eir

paym

ent i

n fu

ll on

all

capi

tal p

aid

up o

n th

e R

CP

S-i

by th

e re

spec

tive

hold

er, a

nd a

ny p

refe

rent

ial d

ivid

ends

dec

lare

d bu

t unp

aid.

For

av

oida

nce

of d

oubt

, it i

s ag

reed

that

the

pass

ing

of a

reso

lutio

n at

an

EGM

of

the

ord

inar

y sh

areh

olde

rs t

o am

end

the

Con

stitu

tion

(em

bedd

ing

the

right

s of

the

RC

PS-i

hold

ers)

, sha

ll re

pres

ent

thei

r ag

reem

ent (

in a

nd f

or

com

plia

nce

with

Sha

riah)

for t

he p

riorit

y of

dis

tribu

tion

(of a

sset

s up

on th

e liq

uida

tion,

dis

solu

tion

or w

indi

ng-u

p of

the

Com

pany

) to

be d

ecid

ed b

y th

e Bo

ard

at th

e po

int o

f dis

tribu

tion

on th

eir b

ehal

f.

(c)

The

Com

pany

sha

ll pa

y in

cas

h an

d in

ful

l, th

e am

ount

whi

ch s

hall

be

equi

vale

nt t

o: (

i) al

l the

cap

ital p

aid

up o

n th

e R

CP

S-i

by t

he r

espe

ctiv

e ho

lder

; an

d (ii

) an

y pr

efer

entia

l di

vide

nds

decl

ared

but

unp

aid

upon

liq

uida

tion,

dis

solu

tion

or w

indi

ng-u

p of

the

Com

pany

, out

of t

he p

roce

eds

of li

quid

atio

n of

the

asse

ts o

f the

Com

pany

.

(d)

By

subs

crib

ing

to t

he R

CPS

-i, t

he R

CP

S-i

hold

ers

agre

e (in

and

for

co

mpl

ianc

e w

ith S

haria

h) t

o w

aive

any

Def

erre

d D

ivid

ends

tha

t ha

ve n

otbe

en d

ecla

red

as p

refe

rent

ial d

ivid

ends

by

the

Com

pany

up

to th

e po

int o

f liq

uida

tion,

dis

solu

tion

or w

indi

ng-u

p of

the

Com

pany

, with

suc

h w

aive

r to

be

dec

ided

by

the

Boar

d at

the

rele

vant

tim

e on

thei

r beh

alf.

198

APP

END

IX V

AM

END

MEN

TS T

O O

UR

CO

NST

ITU

TIO

N (C

ont’d

)

184

18.V

otin

g rig

hts

(a)

The

RC

PS-

i hol

ders

sha

ll be

ent

itled

to th

e sa

me

right

s as

hol

ders

of t

he

Com

pany

's o

rdin

ary

shar

es a

s re

gard

to th

e re

ceip

t of n

otic

es (i

nclu

ding

that

of

gen

eral

mee

tings

), re

ports

and

aud

ited

finan

cial

sta

tem

ents

, to

atte

nd

mee

tings

and

to re

ceiv

e sh

areh

olde

rs’ r

esol

utio

ns in

writ

ing,

but

sha

ll no

t be

entit

led

to v

ote

or a

ppro

ve a

ny s

hare

hold

ers'

res

olut

ions

or

vote

at

any

gene

ral

mee

ting

of t

he C

ompa

ny,

save

and

exc

ept

in r

espe

ct o

f an

y re

solu

tion

mad

e:

(i)w

hen

the

pref

eren

tial d

ivid

ends

or

any

part

ther

eof

is in

arr

ears

and

un

paid

for m

ore

than

six

(6) m

onth

s;

(ii)

on a

pro

posa

l to

redu

ce th

e C

ompa

ny’s

sha

re c

apita

l;

(iii)

on a

pro

posa

l fo

r th

e di

spos

al o

f su

bsta

ntia

lly t

he w

hole

of

the

Com

pany

’s p

rope

rty, b

usin

ess

and

unde

rtaki

ng;

(iv)

on a

pro

posa

l to

win

d-up

the

Com

pany

;

(v)

durin

g th

e w

indi

ng-u

p of

the

Com

pany

; or

(vi)

on a

ny p

ropo

sal t

hat

affe

cts

the

right

s an

d pr

ivile

ges

atta

ched

to

the

RC

PS-

i, in

clud

ing

the

amen

dmen

ts to

the

Con

stitu

tion.

(b)

In a

ny o

f th

e af

ores

aid

circ

umst

ance

s in

par

agra

ph18

(a),

each

RC

PS

-iho

lder

sha

ll be

ent

itled

to v

ote

at a

ll ge

nera

l mee

tings

of t

he m

embe

rs o

f its

cl

ass,

and

on

a po

ll at

any

suc

h ge

nera

l mee

tings

to

one

vote

for

eac

h R

CP

S-i

held

.

(c)

Failu

re b

y th

e C

ompa

ny to

pro

vide

any

not

ice

of a

ny d

ocum

ent r

efer

red

to

in p

arag

raph

18(a

)abo

ve (s

ave

in re

spec

t of t

he a

fore

said

exc

eptio

ns) w

ill

not a

ffect

the

valid

ity o

f any

mee

ting

(or a

ny p

roce

edin

gs a

t any

mee

ting)

, tra

nsac

tion

or d

ocum

ent

conn

ecte

d w

ith t

he d

ocum

ent

whi

ch w

as n

ot

rece

ived

by

a ho

lder

of R

CPS

-i.

19.L

istin

g st

atus

of

RC

PS-i

(a)

The

RC

PS-

iw

ill be

lis

ted

and

quot

ed o

n th

e M

ain

Mar

ket

of B

ursa

Se

curit

ies.

199

APP

END

IX V

AM

END

MEN

TS T

O O

UR

CO

NST

ITU

TIO

N (C

ont’d

)

185(b

)Th

e N

ew O

rdin

ary

Sha

res

will

be li

sted

and

quo

ted

on th

e M

ain

Mar

ket o

f Bu

rsa

Sec

uriti

es.

20.T

rans

fera

bilit

yTh

e R

CP

S-i

shal

l be

tra

nsfe

rabl

e, s

ubje

ct h

owev

er t

o th

e ap

plic

able

law

s,

regu

latio

ns a

nd ru

les

that

wou

ld a

pply

to th

e se

curit

ies

of th

e C

ompa

ny.

21.G

over

ning

law

Law

s an

d re

gula

tions

of M

alay

sia.

22.R

atin

gTh

e R

CPS

-i w

ill b

e un

rate

d.”

To a

men

d Ar

ticle

10

of t

he A

rticl

es

of A

ssoc

iatio

n

“Not

with

stan

ding

Ar

ticle

11

he

reof

, th

e re

paym

ent

of

pref

eren

ce

capi

tal

othe

r th

an

rede

emab

le p

refe

renc

e ca

pita

l, or

an

y ot

her

alte

ratio

n of

pr

efer

ence

sha

reho

lder

s’ r

ight

s sh

all o

nly

be m

ade

purs

uant

to a

sp

ecia

l re

solu

tion

of

the

pref

eren

ce

shar

ehol

ders

co

ncer

ned,

pro

vide

d al

way

s th

at

whe

re th

e ne

cess

ary

maj

ority

for

such

a s

peci

al r

esol

utio

n is

not

ob

tain

ed a

t the

mee

ting,

con

sent

in

writ

ing,

if

obta

ined

fro

m t

he

hold

ers

of t

hree

-four

ths

(3/4

) of

th

e pr

efer

ence

cap

ital c

once

rned

w

ithin

tw

o (2

) m

onth

s of

th

e m

eetin

g, s

hall

be a

s va

lid a

nd

effe

ctua

l as

a sp

ecia

l res

olut

ion

carr

ied

at th

e m

eetin

g.”

“Not

with

stan

ding

Arti

cle

11 t

here

of,

the

repa

ymen

t of

the

RC

PS-i

shal

l be

in

acco

rdan

ce w

ith t

he

prov

isio

ns o

f Arti

cle

9.”

To a

men

d Ar

ticle

16

3 of

th

e Ar

ticle

s of

As

soci

atio

n

“Ano

tice

may

be

give

n by

the

C

ompa

ny t

o an

y M

embe

r ei

ther

pe

rson

ally

or

by s

endi

ng i

t by

po

st o

r by

cou

rier

to h

im a

t hi

s re

gist

ered

add

ress

as

appe

arin

g in

th

e R

ecor

dof

D

epos

itors

.

“ (a)

A

notic

e m

ay b

e gi

ven

by th

e C

ompa

ny to

any

Mem

ber e

ither

–

(i)pe

rson

ally

or b

y se

ndin

g it

by p

ost o

r by

cour

ier t

o hi

m a

t his

regi

ster

ed a

ddre

ss a

s ap

pear

ing

in

the

Rec

ord

of D

epos

itors

;

200

APP

END

IX V

AM

END

MEN

TS T

O O

UR

CO

NST

ITU

TIO

N (C

ont’d

)

186

Whe

re a

not

ice

is s

ent b

y po

st o

r by

cou

rier,

serv

ice

of t

he n

otic

e sh

all

be d

eem

ed t

o be

effe

cted

by

pr

oper

ly

addr

essi

ng,

prep

arin

g an

d po

stin

g a

lette

r co

ntai

ning

th

e no

tice,

an

d to

ha

ve b

een

effe

cted

in th

e ca

se o

f a

notic

e of

am

eetin

g on

the

day

afte

rth

e da

te o

f its

pos

ting,

and

in

any

oth

er c

ase

at t

he t

ime

at

whi

ch

the

lette

r w

ould

be

de

liver

ed in

the

ord

inar

y co

urse

of

pos

t. Th

e ac

cide

ntal

om

issi

on

to g

ive

any

notic

e of

any

mee

ting

to o

r the

non

-rec

eipt

of a

ny s

uch

notic

e by

any

of

the

Mem

bers

sh

all

not

inva

lidat

e th

e pr

ocee

ding

s at

an

y ge

nera

l m

eetin

g or

any

reso

lutio

n pa

ssed

th

erea

t.”

(ii)

by e

lect

roni

c fo

rm –

(1)

to a

n el

ectro

nic

mai

l add

ress

of a

Mem

ber w

ho h

as p

rovi

ded

such

add

ress

for t

he p

urpo

ses

of c

omm

unic

atio

n;

(2)

thro

ugh

Burs

a M

alay

sia

Dep

osito

ry S

dn B

hd o

r ot

her

third

par

ty p

ursu

ant t

o an

y el

ectro

nic

subs

crip

tion

serv

ices

pro

vide

d by

Bur

sa M

alay

sia

Dep

osito

ry S

dn B

hd o

r an

y el

ectro

nic

plat

form

pro

vide

d by

third

par

ties;

(3)

by w

ay o

f pub

licat

ion

on th

e C

ompa

ny’s

web

site

.

(b)

Whe

re a

not

ice

is s

ent b

y po

st o

r by

cour

ier,

serv

ice

of th

e no

tice

shal

l be

deem

ed to

be

effe

cted

by

prop

erly

add

ress

ing,

pre

parin

g an

d po

stin

g a

lette

r con

tain

ing

the

notic

e, a

nd to

hav

e be

en e

ffect

ed

in th

e ca

se o

f a n

otic

e of

am

eetin

g on

the

day

afte

r the

dat

e of

its

post

ing,

and

in a

ny o

ther

cas

e at

th

e tim

e at

whi

ch th

e le

tter w

ould

be

deliv

ered

in th

e or

dina

ry c

ours

e of

pos

t.

(c)

Whe

re a

not

ice

is s

ent i

n el

ectro

nic

form

, ser

vice

of t

he n

otic

e sh

all b

e de

emed

to b

e ef

fect

ed u

pon

trans

mis

sion

to th

e la

st k

now

n el

ectro

nic

mai

l add

ress

of t

he M

embe

r pr

ovid

ed th

e C

ompa

ny h

asre

cord

of

the

elec

troni

c co

mm

unic

atio

n be

ing

sent

and

doe

s no

t rec

eive

any

aut

omat

ed d

eliv

ery

failu

re n

otic

e af

ter

trans

mis

sion

of c

omm

unic

atio

n. A

ny n

otic

e by

way

of p

ublic

atio

n in

a w

ebsi

te

shal

l be

deem

ed s

erve

d if

it is

ser

ved

in a

ccor

danc

e w

ith s

ectio

n 32

0 of

the

Com

pani

es A

ct 2

016

and

List

ing

Req

uire

men

ts.

(d)

The

acc

iden

tal o

mis

sion

to g

ive

any

notic

e of

any

mee

ting

to o

r the

non

-rec

eipt

of a

ny s

uch

notic

e by

any

of t

he M

embe

rs s

hall

not i

nval

idat

e th

e pr

ocee

ding

s at

any

gen

eral

mee

ting

or a

ny re

solu

tion

pass

ed th

erea

t.” 201

APPENDIX VI

SHARIAH PRONOUNCEMENT LETTER (Cont’d)

188202

APPENDIX VI


188203

APPENDIX VI


188204

APPENDIX VI


188205

APPENDIX VI


188206

APPENDIX VI


188207

APPENDIX VI


188208

APPENDIX VI


188209

APPENDIX VI


188210

APPENDIX VI


188211

APPENDIX VI


188212

APPENDIX VI


188213

APPENDIX VI


188214

APPENDIX VI


188215

APPENDIX VI


188216

APPENDIX VI


188217

APPENDIX VI


188218

APPENDIX VII

FURTHER INFORMATION

200

1. RESPONSIBILITY STATEMENT

Our Board has seen and approved this Circular and they collectively and individually accept full responsibility for the accuracy of the information contained in this Circular and confirm that, after having made all reasonable enquiries and to the best of their knowledge and belief, there are no facts, the omission of which would make any statement in this Circular misleading.

2. CONSENT AND CONFLICT OF INTERESTS

2.1 Maybank IB

Maybank IB, being the Principal Adviser for the Proposals, has given and has not subsequently withdrawn its written consent to the inclusion of its name and all references thereto in the form and context in which it appears in this Circular.

Maybank IB and its related and associated businesses (“Maybank Group") form a diversified financial group and are engaged in a wide range of investment and commercial banking, brokerage, securities trading, asset and fund management and credit transaction services businesses. The Maybank Group has engaged and may in the future, engage in transactions with and perform services for our Group and/or any of our affiliates, in addition to the role set out in this Circular. In addition, in the ordinary course of business, any member of the Maybank Group may at any time offer or provide its services to or engage in any transaction (on its own account or otherwise) with any member of our Group, our shareholders, and/or our affiliates and/or any other entity or person, hold long or short positions in securities issued by our Company and/or our affiliates, and may trade or otherwise effect transactions for its own account or the account of its other customers in debt or equity securities or senior loans of any member of our Group and/or our affiliates. This is a result of the businesses of the Maybank Group generally acting independently of each other, and accordingly, there may be situations where parts of the Maybank Group and/or its customers now have or in the future, may have interest or take actions that may conflict with the interest of our Group. Nonetheless, the Maybank Group is required to comply with the applicable laws and regulations issued by the relevant authorities governing its advisory business, which require, among others, segregation between dealing and advisory activities and Chinese wall between different business divisions.

As at the LPD, our Group has existing credit facilities with the Maybank Group, of which RM4,491.1 million is outstanding. The said credit facilities have been extended by the Maybank Group in the ordinary course of business. The credit facilities include multi-currency term facilities granted by a group of domestic and foreign banks. The proceeds from the Proposed Rights Issue will be used to partly repay the amount due to lenders of the said multi-currency term facilities, of which not more than USD268.6 million (equivalent to RM1,123.8 million) will be repaid to the Maybank Group.

Maybank IB confirms that the aforesaid lending relationship would not give rise to a conflict of interest situation in its capacity as Principal Adviser for the Proposals as:

(i) the extension of credit facilities arose in the ordinary course of business of the Maybank Group;

(ii) the proceeds from the Proposed Rights Issue allocated for the repayment of the said multi-currency term facilities will be based on the loan outstanding amount to the respective domestic and foreign banks for the said tranches of the multi-currency term facilities in accordance with the terms and conditions of the respective facility agreements;

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FURTHER INFORMATION (Cont’d)

201

(iii) the conduct of the Maybank Group in its banking business is strictly regulated by the Financial Services Act, 2013, Islamic Financial Services Act, 2013 and the Maybank Group’s own internal controls and checks; and

(iv) the total outstanding amount owed by our Group to the Maybank Grouprepresents approximately 6.2% of the audited NA of the Maybank Group as at 31 December 2017 of RM73.0 billion.

Maybank IB confirms that it is not aware of any circumstance that exists or is likely to exist which would give rise to a possible conflict of interest situation in its capacity as Principal Adviser for the Proposals.

2.2 Independent Adviser

Mercury Securities, being the Independent Adviser for the Proposed Exemption, has given and has not subsequently withdrawn its written consent to the inclusion of its name, IAL and all references thereto in the form and context in which they appear in this Circular.

Mercury Securities confirms that it is not aware of any circumstance that exists or is likely to exist which would give rise to a possible conflict of interest situation in its capacity as Independent Adviser for the Proposed Exemption.

2.3 Shariah Adviser

Maybank Islamic, being the Shariah Adviser for the Proposed Rights Issue of RCPS-i,has given and has not subsequently withdrawn its written consent to the inclusion of its name and Shariah Pronouncement Letter and all references thereto in the form and context in which they appear in this Circular.

Maybank Islamic is a licensed Islamic bank and its appointment as the Shariah Adviser for the Proposed Rights Issue of RCPS-i is in its ordinary course of business. Maybank Islamic confirms that it is not aware of any circumstance that exists or is likely to exist which would give rise to a possible conflict of interest situation in its capacity as Shariah Adviser for the Proposed Rights Issue of RCPS-i.

3. MATERIAL COMMITMENTS AND CONTINGENT LIABILITIES

3.1 Material commitments

Save for capital expenditure for property, plant and equipment and expenditure on oil and gas properties approved and not provided for of RM528,768,000 as at 31 July 2018, our Board is not aware of any material commitments incurred or known to be incurred by our Group which may have a material impact on the profits and/or NA of our Group.

3.2 Contingent liabilities

Save for corporate guarantees given by our Group to financial institutions for credit facilities granted to joint ventures amounting to RM762.6 million as at the LPD, our Board is not aware of any contingent liabilities which, upon becoming enforceable, may have a material impact on the profits and/or NA of our Group.

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4. MATERIAL LITIGATION

Save as disclosed below, as at the LPD, our Group is not engaged in any material litigation, claims or arbitration, either as plaintiff or defendant and our Board is not aware of any proceedings, pending or threatened, against our Group or of any facts likely to give rise to any proceedings which may materially affect the business or financial position of our Group:

(i) Sarku Engineering Services Sdn Bhd (“SESSB”)

On 20 February 2006, SESSB, a wholly-owned subsidiary of our Company, entered into a contract with Oil and Natural Gas Corporation Limited (“ONGC”) for the performance of works by SESSB to revamp 26 well platforms located at Mumbai High South field offshore site (“Contract”). On 21 September 2012, SESSB commenced arbitration proceedings against ONGC in relation to disputes arising from the Contract for a sum of INR1,063,759,201 and USD123,819,632 (including interest, costs, losses and damages). The claims by ONGC were made separately in two currencies as the claim is based on the rates and currencies prescribed in the Contract.

On 17 December 2012, ONGC has filed their reply to SESSB’s statement of claim. No counter claims have been filed by ONGC. Documents and witness statements have been filed.

Further examination in chief took place in January 2014 whereby revised list of documents were exchanged and has been taken on record. Cross examination of ONGC’s witness commenced in January 2015. The tribunal heard SESSB’s submission in January, February and May 2018 and new hearing dates have been fixed on 21 November 2018 to 23 November 2018.

SESSB has been advised by its solicitors that SESSB has a reasonable basis for its claim against ONGC.

(ii) Sapura Fabrication Sdn Bhd (“SFSB”)

On 18 March 2011, SFSB, a wholly-owned subsidiary of our Company, entered into a contract with Petrofac (Malaysia) Limited (“PML”) to provide works for the engineering, procurement and construction of well head platforms for the Cendor Phase 2 Development Project and the Cendor field located in Block PM 304 in the Malaysian sector of the South China Sea (“Contract 2”).

On 26 March 2018, SFSB received a commencement request from PML to formally initiate a claim by way of arbitration proceedings at the Asian International Arbitration Centre for damages amounting to a sum of USD14,743,541 and RM831,188 in relation to disputes arising from the Contract 2. PML has alleged breach of riser height requirements and preservation obligations by SFSB. The claim by PML was made separately in two currencies as the claim is based on the rates and currencies prescribed in the Contract 2.

On 26 April 2018, SFSB responded to PML’s claim and made a counterclaim for a total sum of RM11,023,719.56.

The arbitrators have been appointed and parties have attended the first arbitration meeting on 21 July 2018. PML has filed their Points of Claim on 21 September 2018 and SFSB is required to file its Defence and Counterclaim by 21 November 2018. The tentative hearing dates have been fixed on 23 September 2019.

SFSB has been advised by its solicitors that PML’s claim can be legally defended and SFSB has a reasonable basis for its counterclaim against PML.

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(iii) Sapura Exploration & Production Inc (“SEP Inc”)

(a) On 11 February 2014, our Company and SEP Inc (collectively, “Sapura”) completed the acquisition of Newfield Malaysia Holdings Inc (currently known as SEP Malaysia) from Newfield International Holding Inc. and Newfield Exploration Company (collectively, “Newfield”). Arbitration proceedings between Sapura as claimants and Newfield as respondents arose out of the post-closing purchase price adjustments (“Adjustments”) and tax indemnity related to the acquisition.

On closing of the transaction, Sapura paid to Newfield a total of USD895.9 million for the acquisition, subject to adjustments. This amount was arrived at after taking into account certain items such as the estimated value of SEP Malaysia’s net working capital as at an agreed effective time (“ETNWC”).

After the closing of the transaction, Newfield delivered the final calculation of the adjusted purchase price to Sapura, claiming that Sapura owed Newfield an additional USD15,868,810 as a result of the adjustments.

Sapura in turn delivered its report on the changes that were necessary to properly calculate the final purchase price, claiming that during this process, it discovered that the preliminary estimate of the ETNWC did not match the agreed formulas. Sapura claimed that as a result of this discrepancy, the ETNWC adjustment was overvalued by approximately USD81.4 million. Sapura notified Newfield of this discrepancy, but Newfield refused to adjust the purchase price, claiming that the agreed numbers were fixed and final.

As the parties were unable to resolve the dispute, Sapura submitted a Request for Arbitration (“Request”) against Newfield on 19 October 2017 at the London Court of International Arbitration (“LCIA”), requesting the tribunal to set the final value of the adjustments and the final adjusted purchase price. Sapura also requested the tribunal to order Newfield to refund Sapura the amount by which the closing amount paid by Sapura exceeds the adjusted purchase price and indemnify Sapura for taxes which Sapura has paid on behalf of SEP Malaysia and award Sapura all damages, cost and equitable relief.

In its response to the Request (“Response”), Newfield has contested all of Sapura’s claims, arguing that the ETNWC was locked at the time of closing and thus is not subject to adjustment. In the Response, Newfield has also asserted its intention to cross-claim against Sapura, that: (1) Sapura owes Newfield RM34,048,008, which Newfield claims was its share of a tax refund received by SEP Malaysia for taxes paid in excess during the straddle period prior to completion of the acquisition; and (2) Sapura owes Newfield USD15,868,810 for post-closing adjustments to net intergroup advances and receipts.

The parties are at the initial disclosure stage and it is anticipated that final hearings on this matter will conclude on or around April 2019. Sapura has been advised by its counsels that it is difficult at the present stage to provide any opinion on the likely outcome of this matter.

(b) On 20 October 2017, in parallel and as a back-up to the arbitration proceedings disclosed in paragraph (a) above, SEP Inc filed an Original Petition and Application for Order at the Texas State Court (“Court”) pursuant to the Texas Civil Practice and Remedies Code (“Petition”) against Newfield International Holdings, Inc and Newfield Exploration Company (collectively, the ”Defendants”) and requested the Court to enter an order temporarily staying judicial proceedings on the claims pending the outcome of the arbitration in the LCIA.

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On 18 December 2017, the Defendants responded to the Petition opposing the Petition in similar fashion to the arbitration proceedings.

The Court has officially stayed the case and there are no claims in this matter that are distinct from the claims raised in the LCIA. The litigation will only proceed if necessary after the conclusion of the arbitration proceedings.

5. DOCUMENTS AVAILABLE FOR INSPECTION

Copies of the following documents are available for inspection at our registered office at Sapura@Mines, No. 7, Jalan Tasik, The Mines Resort City, 43300 Seri Kembangan, Selangor Darul Ehsan, Malaysia during normal business hours from Mondays to Fridays (except public holidays) from the date of this Circular up to and including the date of the forthcoming EGM:

(i) our Constitution;

(ii) audited consolidated financial statements of our Company for the past two (2) FYEs 31 January 2017 and 31 January 2018, and the latest unaudited consolidated financial statements of our Company for the six (6)-month period ended 31 July 2018;

(iii) letters of consent referred to in Section 2 of this Appendix;

(iv) the relevant cause papers in relation to the material litigation referred to in Section 4 of this Appendix;

(v) draft Deed Poll;

(vi) draft By-Laws; and

(vii) Shariah Pronouncement Letter as set out in Appendix VI of this Circular.

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NOTICE OF EXTRAORDINARY GENERAL MEETING

NOTICE IS HEREBY GIVEN that the Extraordinary General Meeting (“EGM”) of Sapura Energy Berhad (“SEB” or “Company”) will be held at the Multi-Purpose Hall, Ground Floor, Sapura@Mines, No. 7 Jalan Tasik, The Mines Resort City, 43300 Seri Kembangan, Selangor Darul Ehsan, Malaysia on Thursday, 29 November 2018 at 10.00 a.m. or any adjournment thereof for the purpose of considering and if deemed fit, passing with or without any modification, the following resolutions:

ORDINARY RESOLUTION 1

PROPOSED RENOUNCEABLE RIGHTS ISSUE OF UP TO 9,986,925,145 NEW ORDINARY SHARES IN SEB (“SEB SHARES”) (“RIGHTS SHARES”) AT AN ISSUE PRICE OF RM0.30 PER RIGHTS SHARE TOGETHER WITH UP TO 998,692,515 FREE DETACHABLE WARRANTS (“WARRANTS”) ON THE BASIS OF FIVE (5) RIGHTS SHARES FOR EVERY THREE (3) SEB SHARES HELD AT AN ENTITLEMENT DATE TO BE DETERMINED LATER AND ONE (1) FREE WARRANT FOR EVERY TEN (10) RIGHTS SHARES SUBSCRIBED (“PROPOSED RIGHTS ISSUE OF SHARES WITH WARRANTS”)

“THAT subject to the passing of Ordinary Resolutions 2 and 3 as well as the Special Resolution and the relevant approvals being obtained from the relevant authorities and/or parties (where applicable) for the Proposed Rights Issue of Shares with Warrants, approval be and is hereby given to the Board ofDirectors of the Company (“Board”) for the following:

(a) allot (provisionally or otherwise) and issue by way of a renounceable rights issue of up to 9,986,925,145 Rights Shares on the basis of five (5) Rights Shares for every three (3) SEB Shares held by the shareholders of the Company whose names appear in the Record of Depositors of the Company as at the close of business on an entitlement date to be determined later by the Board (“Entitled Shareholders”) at an issue price of RM0.30 per Rights Share, together with up to 998,692,515 free Warrants on the basis of one (1) free Warrant for every ten (10) Rights Shares subscribed;

(b) enter into and execute the deed poll to govern the Warrants in relation to the Proposed Rights Issue of Shares with Warrants (“Deed Poll”) with full powers to assent to any conditions,variations, modifications and/or amendments from time to time, in accordance with and subject to the terms of the Deed Poll and in any manner as may be required by the relevant authorities or deemed necessary by the Board, and with full powers to implement and give effect to the terms and conditions of the Deed Poll and in the best interest of the Company;

(c) disregard and deal with any fractional entitlements, if any, that may arise from the Proposed Rights Issue of Shares with Warrants in such manner as the Board in its absolute discretion deems fit and expedient, and in the best interest of the Company;

(d) make available for excess applications by the other Entitled Shareholders and/or their renouncee(s), and to allocate the excess Rights Shares with Warrants in a fair and equitable manner on a basis to be determined by the Board;


NOTICE OF EXTRAORDINARY GENERAL MEETING

NOTICE IS HEREBY GIVEN that the Extraordinary General Meeting (“EGM”) of Sapura Energy Berhad (“SEB” or “Company”) will be held at the Multi-Purpose Hall, Ground Floor, Sapura@Mines, No. 7 Jalan Tasik, The Mines Resort City, 43300 Seri Kembangan, Selangor Darul Ehsan, Malaysia on Thursday, 29 November 2018 at 10.00 a.m. or any adjournment thereof for the purpose of considering and if deemed fit, passing with or without any modification, the following resolutions:


PROPOSED RENOUNCEABLE RIGHTS ISSUE OF UP TO 9,986,925,145 NEW ORDINARY SHARES IN SEB (“SEB SHARES”) (“RIGHTS SHARES”) AT AN ISSUE PRICE OF RM0.30 PER RIGHTS SHARE TOGETHER WITH UP TO 998,692,515 FREE DETACHABLE WARRANTS (“WARRANTS”) ON THE BASIS OF FIVE (5) RIGHTS SHARES FOR EVERY THREE (3) SEB SHARES HELD AT AN ENTITLEMENT DATE TO BE DETERMINED LATER AND ONE (1) FREE WARRANT FOR EVERY TEN (10) RIGHTS SHARES SUBSCRIBED (“PROPOSED RIGHTS ISSUE OF SHARES WITH WARRANTS”)

“THAT subject to the passing of Ordinary Resolutions 2 and 3 as well as the Special Resolution and the relevant approvals being obtained from the relevant authorities and/or parties (where applicable) for the Proposed Rights Issue of Shares with Warrants, approval be and is hereby given to the Board ofDirectors of the Company (“Board”) for the following:

(a) allot (provisionally or otherwise) and issue by way of a renounceable rights issue of up to 9,986,925,145 Rights Shares on the basis of five (5) Rights Shares for every three (3) SEB Shares held by the shareholders of the Company whose names appear in the Record of Depositors of the Company as at the close of business on an entitlement date to be determined later by the Board (“Entitled Shareholders”) at an issue price of RM0.30 per Rights Share, together with up to 998,692,515 free Warrants on the basis of one (1) free Warrant for every ten (10) Rights Shares subscribed;

(b) enter into and execute the deed poll to govern the Warrants in relation to the Proposed Rights Issue of Shares with Warrants (“Deed Poll”) with full powers to assent to any conditions,variations, modifications and/or amendments from time to time, in accordance with and subject to the terms of the Deed Poll and in any manner as may be required by the relevant authorities or deemed necessary by the Board, and with full powers to implement and give effect to the terms and conditions of the Deed Poll and in the best interest of the Company;

(c) disregard and deal with any fractional entitlements, if any, that may arise from the Proposed Rights Issue of Shares with Warrants in such manner as the Board in its absolute discretion deems fit and expedient, and in the best interest of the Company;

(d) make available for excess applications by the other Entitled Shareholders and/or their renouncee(s), and to allocate the excess Rights Shares with Warrants in a fair and equitable manner on a basis to be determined by the Board;

(e) allot and issue such number of new SEB Shares to the holders of the Warrants, credited as fully paid-up, arising from the exercise of the Warrants; and

(f) use the proceeds from the Proposed Rights Issue of Shares with Warrants for such purpose and in the manner as set out in Section 7 of Part A of the circular to shareholders of the Company dated 7 November 2018 and the Board be authorised to revise the purpose and manner of the use of proceeds as it may deem fit or expedient, and in the best interest of the Company.

THAT the Warrants shall be allotted and issued in the registered form on the basis that, subject to any adjustments to the subscription rights attached to the Warrants under the provisions of the Deed Poll, each Warrant entitles its holder to subscribe for one (1) new SEB Share at an exercise price of RM0.49 per Warrant, during its prescribed exercise period;

THAT the Rights Shares shall, upon allotment and issue, rank equally in all respects with the then issued SEB Shares including the entitlements to dividends, rights, allotments or other distributions, except that they shall not be entitled to any dividends, rights, allotments and/or other distributions, of which the entitlement date is before the date of allotment of such Rights Shares;

THAT the new SEB Shares to be issued arising from the exercise of the Warrants shall, upon allotment and issue, rank equally in all respects with the then issued SEB Shares including the entitlements to dividends, rights, allotments or other distributions, except that they shall not be entitled to any dividends, rights, allotments and/or other distributions, of which the entitlement date is before the date of allotment of such new SEB Shares to be issued arising from the exercise of the Warrants;

AND THAT the Board be and is hereby empowered and authorised to do all such acts, deeds and things and to execute, enter into, sign and deliver on behalf of the Company, all such documents and/ or arrangements (including without limitation, the affixing of the Company’s common seal) as the Board may deem necessary, expedient and/or appropriate to implement, to finalise, to give full effect to and to complete the Proposed Rights Issue of Shares with Warrants, with full powers to assent to and/or accept any conditions, modifications, variations, arrangements and/or amendments as the Directors of the Company may in their absolute discretion deem fit, necessary and/or expedient in the best interest of the Company and/or as may be imposed by any relevant authorities and/or parties in connection with the Proposed Rights Issue of Shares with Warrants.”


PROPOSED RENOUNCEABLE RIGHTS ISSUE OF UP TO 2,396,862,035 NEW ISLAMIC REDEEMABLE CONVERTIBLE PREFERENCE SHARES IN SEB (“RCPS-i”) AT AN ISSUE PRICE OF RM0.41 PER RCPS-i ON THE BASIS OF TWO (2) RCPS-i FOR EVERY FIVE (5) SEB SHARES HELD AT AN ENTITLEMENT DATE TO BE DETERMINED LATER (“PROPOSED RIGHTS ISSUE OF RCPS-i”)

“THAT subject to the passing of Ordinary Resolutions 1 and 3 as well as the Special Resolution and the relevant approvals being obtained from the relevant authorities and/or parties (where applicable) for the Proposed Rights Issue of RCPS-i, approval be and is hereby given to the Board for the following:

(a) allot (provisionally or otherwise) and issue by way of a renounceable rights issue of up to 2,396,862,035 new RCPS-i on the basis of two (2) RCPS-i for every five (5) SEB Shares held by the Entitled Shareholders at an issue price of RM0.41 per RCPS-i;

(b) allot and issue such number of new SEB Shares credited as fully paid-up pursuant to any conversion of the RCPS-i;

(c) disregard and deal with any fractional entitlements, if any, that may arise from the Proposed Rights Issue of RCPS-i in such manner as the Board in its absolute discretion deems fit and expedient, and in the best interest of the Company;

(d) make available for excess applications by the other Entitled Shareholders and/or their renouncee(s), and to allocate the excess RCPS-i in a fair and equitable manner on a basis to be determined by the Board; and

(e) use the proceeds from the Proposed Rights Issue of RCPS-i for such purpose and in the manner as set out in Section 7 of Part A of the circular to shareholders of the Company dated 7 November 2018 and the Board be authorised to revise the purpose and manner of the use of proceeds as it may deem fit or expedient, and in the best interest of the Company.

THAT the RCPS-i shall rank equally amongst themselves, and will rank ahead in point of priority to the holders of the SEB Shares and all other classes of shares (if any) in the Company, in respect of payment out of the assets of the Company upon any liquidation, dissolution or winding-up of the Company, provided always that the Board approves such payment out of the assets of the Company on this basis and further affirms the priority of payment to the holders of the RCPS-i;

THAT the RCPS-i shall rank subordinated to all the Company’s creditors in respect of payment of debt and payment out of the assets of the Company upon liquidation, dissolution, or winding-up of theCompany;

THAT the new SEB Shares to be issued arising from the conversion of the RCPS-i shall, upon allotment and issue, rank equally in all respects with the then issued SEB Shares including the entitlements to dividends, rights, allotments or other distributions, except that they shall not be entitled to any dividends, rights, allotments and/or other distributions, of which the entitlement date is before the date of allotment of such new SEB Shares to be issued arising from the conversion of the RCPS-i;

AND THAT the Board be and is hereby empowered and authorised to do all such acts, deeds and things and to execute, enter into, sign and deliver on behalf of the Company, all such documents and/ or arrangements (including without limitation, the affixing of the Company’s common seal) as the Board may deem necessary, expedient and/or appropriate to implement, to finalise, to give full effect to and to complete the Proposed Rights Issue of RCPS-i, with full powers to assent to and/or accept any conditions, modifications, variations, arrangements and/or amendments as the Directors of the Company may in their absolute discretion deem fit, necessary and/or expedient in the best interest of the Company and/or as may be imposed by any relevant authorities and/or parties in connection with the Proposed Rights Issue of RCPS-i.”


PROPOSED EXEMPTION FOR PERMODALAN NASIONAL BERHAD (“PNB”), AMANAH SAHAM BUMIPUTERA (“ASB”) AND PERSONS ACTING IN CONCERT WITH THEM FROM THE OBLIGATION TO UNDERTAKE A MANDATORY TAKE-OVER OFFER FOR ALL THE REMAINING SEB SHARES, WARRANTS AND RCPS-i NOT ALREADY OWNED BY THEM PURSUANT TO PARAGRAPHS 4.08(1)(B) AND 4.08(1)(C) OF THE RULES ON TAKE-OVERS, MERGERS AND COMPULSORY ACQUISITIONS (“RULES”) (“PROPOSED EXEMPTION”)

“THAT subject to the passing of Ordinary Resolutions 1 and 2 as well as the Special Resolution and the relevant approvals being obtained from the Securities Commission Malaysia (“SC”) and/or any other relevant authorities and/or parties (where applicable) including such conditions as may be imposed by the SC for the Proposed Exemption, approval be and is hereby given for PNB, ASB and persons acting in concert with them under the Rules to be exempted from the obligation to undertake a mandatory take-over offer to acquire all the remaining SEB Shares, Warrants and RCPS-i not already owned by them which would arise pursuant to the completion of the Proposed Rights Issue of Shares with Warrants and the Proposed Rights Issue of RCPS-i, the exercise of the Warrants during the tenure of the Warrants and/or the conversion of the RCPS-i, pursuant to Paragraphs 4.08(1)(b) and 4.08(1)(c) of the Rules;

AND THAT the Board be and is hereby empowered and authorised to do all such acts, deeds and things and to execute, enter into, sign and deliver on behalf of the Company, all such documents and/ or arrangements (including without limitation, the affixing of the Company’s common seal) as the Board may deem necessary, expedient and/or appropriate to implement, to finalise, to give full effect to and to complete the Proposed Exemption, with full powers to assent to and/or accept any conditions, modifications, variations, arrangements and/or amendments as the Directors of the Company may in their absolute discretion deem fit, necessary and/or expedient in the best interest of the Company and/or as may be imposed by any relevant authorities and/or parties in connection with the Proposed Exemption.”


PROPOSED ESTABLISHMENT OF AN EXECUTIVE SHARE OPTION SCHEME OF UP TO 10% OF THE TOTAL NUMBER OF ISSUED SEB SHARES (EXCLUDING TREASURY SHARES, IF ANY) AT ANY POINT IN TIME (“PROPOSED ESOS”)

“THAT subject to the passing of Ordinary Resolutions 1, 2 and 3 as well as the Special Resolution and the relevant approvals being obtained from the relevant authorities and/or parties (where applicable) for the Proposed ESOS, approval be and is hereby given for the Board to:

(a) establish and administer the Proposed ESOS which involves the granting of options (“ESOS Options”) to all eligible senior management and/or Executive Directors of the Company and its subsidiaries (excluding dormant subsidiaries) (“Participating SEB Group”) who meet the criteria of eligibility for participation in the Proposed ESOS set out in the by-laws of the Proposed ESOS (“By-Laws”) (“Eligible Persons”), which shall be administered by a committee to be appointed and duly authorised by the Board (“ESOS Committee”);

(b) allot and issue such number of new SEB Shares to the Eligible Persons from time to time as may be required for the purpose of or in connection with the implementation of the Proposed ESOS while this approval is in force provided that the aggregate number of SEB Shares to be allotted and issued shall not exceed 10% of the total number of issued SEB Shares (excluding treasury shares, if any) at any point in time throughout the duration of the Proposed ESOS;

(c) amend and/or modify all or part of the provisions of the By-Laws from time to time as may be required/permitted by the authorities or deemed necessary by the authorities or the Board or the ESOS Committee and to do all such acts, deeds and things as may be deemed fit, necessary, expedient and/or appropriate and to enter into all such transactions, arrangements and agreements as may be necessary, expedient and/or appropriate in order to give full effect to such modifications and/or amendments; and

(d) do all such acts, execute all such documents and to enter into all such transactions, arrangements and agreements, deeds and undertakings and to make such rules or regulations or impose such terms and conditions or delegate part of its powers as may be deemed necessary, expedient and/or appropriate in order to give full effect to the Proposed ESOS and terms of the By-Laws.

THAT the new SEB Shares to be allotted and issued upon exercise of the ESOS Options (“ESOS Shares”) shall, upon allotment and issue, rank equally in all respects with the then issued SEB Shares including the entitlements to dividends, rights, allotments or other distributions, except that they shall not be entitled to any dividends, rights, allotments and/or other distributions, of which the entitlement date is before the date of allotment of such ESOS Shares;

AND THAT the By-Laws of the Proposed ESOS, a draft of which is set out in Appendix III of the circular to shareholders of the Company dated 7 November 2018 be and is hereby approved and adopted.”


PROPOSED GRANTING OF ESOS OPTIONS TO TAN SRI DATO’ SERI SHAHRIL SHAMSUDDIN (“PROPOSED GRANT”)

“THAT subject to the passing of Ordinary Resolutions 1, 2, 3 and 4 as well as the Special Resolution and the relevant approvals being obtained from the relevant authorities and/or parties (where applicable) for the Proposed Grant, the Board be and is hereby authorised at any time during the existence of the Proposed ESOS, to offer and grant to Tan Sri Dato’ Seri Shahril Shamsuddin, being an Executive Director of the Company, options to subscribe for up to 5% of the issued SEB Shares from time to time pursuant to the Proposed ESOS, subject to the following provisions:

(a) the allocation to him, where he either singly or collectively through person connected with him, holds 20% or more of the total number of issued SEB Shares (excluding treasury shares, if any), does not exceed 10% (or such percentage as allowable by the relevant authorities) of the SEB Shares to be issued under the Proposed ESOS; and

(b) he must not participate in the deliberation or discussion of his own allocation on the ESOS Options to be offered to him under the Proposed ESOS.”

SPECIAL RESOLUTION

PROPOSED AMENDMENTS TO THE CONSTITUTION OF SEB (“PROPOSED AMENDMENTS”)

“THAT subject to the passing of Ordinary Resolutions 1, 2 and 3 and the relevant approvals being obtained from the relevant authorities and/or parties (where applicable) for the Proposed Amendments,the Proposed Amendments as set out in Appendix V of the circular to shareholders of the Company dated 7 November 2018 be hereby approved and adopted;

AND THAT the Board be and is hereby empowered and authorised to do all such acts, deeds and things and to execute, enter into, sign and deliver on behalf of the Company, all such documents and/or arrangements (including without limitation, the affixing of the Company’s common seal) as the Board may deem necessary, expedient and/or appropriate to implement, to finalise, to give full effect to the Proposed Amendments, with full powers to assent to and/or accept any conditions, modifications, variations, arrangements and/or amendments as the Directors of the Company may in their absolute discretion deem fit, necessary and/or expedient in the best interest of the Company and/or as may be imposed by any relevant authorities and/or parties in connection with the Proposed Amendments.”

BY ORDER OF THE BOARD

LEW SUE LI (MIA 42700) WONG LAY SEE (MAICSA 7018684) Company Secretaries Seri Kembangan, Selangor Darul Ehsan 7 November 2018

Notes:

(a) A member of the Company who is entitled to attend and vote at the EGM is entitled to appoint up to two (2) proxies to attend and vote on a poll in his stead. A proxy may, but need not be a member of the Company and there is no restriction as to the qualification of the proxy.

(b) Where a member of the Company is an exempt authorised nominee as defined under the Securities Industry (Central Depositories) Act 1991 which holds ordinary shares in the Company for multiple beneficial owners in one securities account (“Omnibus Account”), there is no limit to the number of proxies which the exempt authorised nominee may appoint in respect of each Omnibus Account it holds.

(c) Where a member appoints two (2) proxies, the appointment shall be invalid unless he specifies the proportion of his shareholdings to be represented by each proxy.

(d) An instrument appointing a proxy shall be in writing and in the case of an individual shall be signed by the appointor or by his attorney; and in the case of a corporate member, shall be either under its common seal or signed by its attorney or an officer on behalf of the corporation.

(e) The instrument appointing a proxy must be deposited with the Share Registrar of the Company, Symphony Share Registrars Sdn Bhd at Level 6, Symphony House, Pusat Dagangan Dana 1, Jalan PJU 1A/46, 47301 Petaling Jaya, Selangor Darul Ehsan, Malaysia, not less than twenty-four (24) hours before the time appointed for holding the EGM or any adjournment thereof.

(f) Pursuant to Paragraph 8.29A of Bursa Malaysia Securities Berhad’s Main Market Listing Requirements, all resolutions set out in this Notice of EGM will be put to vote on a poll.

(g) For the purpose of determining a member who shall be entitled to attend the EGM, the Company shall be requesting Bursa Malaysia Depository Sdn Bhd to make available to the Company a Record of Depositors as at 22 November 2018. Only a depositor whose name appears on the Record of Depositors as at 22 November 2018 shall be entitled to attend the EGM or appoint proxies to attend and/or vote on his/her behalf.

(h) By submitting the duly executed proxy form, the member and his/her proxy consent to the Company (and/or its agents/service providers) collecting, using and disclosing the personal data therein in accordance with the Personal Data Protection Act 2010 for the purpose of the EGM and any adjournment thereof.

✄

PROXY FORM

Sapura Energy Berhad (Company No. 950894-T)

(Incorporated in Malaysia)

CDS Account No.

Total number of ordinary shares held

Number of ordinary shares to be represented by each proxy

Proxy 1 Proxy 2

I/We _______________________________________________________________________________________________________________ (Full Name as per NRIC/Passport/Certificate of Incorporation in Capital Letters)

NRIC No./Passport No./Certificate of Incorporation No. _______________________________________________________________

of _____________________________________________________________________________________________________ (Full Address)

being a Member of SAPURA ENERGY BERHAD, do hereby appoint_______________________________________________________

_______________________________________________________________________________________________________ (Full Name as per NRIC/Passport in Capital Letters)

NRIC No./Passport No. ______________________________________________________________________________________

of __________________________________________________________________________________________________________________ (Full Address)

or failing him/her,______________________________________________________________________________________________________ (Full Name as per NRIC/Passport in Capital Letters)

NRIC No./Passport No. _________________________________________________________________________________________________

of __________________________________________________________________________________________________________________ (Full Address)

or failing him/her, the CHAIRMAN OF THE MEETING, as my/our proxy to vote for me/us and on my/our behalf at the Extraordinary General Meeting (“EGM”) of the Company to be held at the Multi-Purpose Hall, Ground Floor, Sapura@Mines, No. 7 Jalan Tasik, The Mines Resort City, 43300 Seri Kembangan, Selangor Darul Ehsan, Malaysia on Thursday, 29 November 2018 at 10.00 a.m. or any adjournment thereof.

Please indicate with an “X” in the space provided below how you wish your vote to be cast. If no specific direction as to voting is given, the Proxy will vote or abstain from voting at his/her discretion.

Resolutions For Against

ORDINARY RESOLUTION 1 Proposed Rights Issue of Shares with Warrants

ORDINARY RESOLUTION 2 Proposed Rights Issue of RCPS-i

ORDINARY RESOLUTION 3 Proposed Exemption

ORDINARY RESOLUTION 4 Proposed ESOS

ORDINARY RESOLUTION 5 Proposed Grant

SPECIAL RESOLUTION Proposed Amendments

________________________________ Signature/Common Seal of Shareholder Dated this _______ day of ____________2018

NOTES: 1. A member of the Company who is entitled to attend and vote at the EGM is entitled to appoint up to two (2) proxies to attend and vote on a poll in his stead. A proxy may, but need

not be a member of the Company and there is no restriction as to the qualification of the proxy. 2. Where a member of the Company is an exempt authorised nominee as defined under the Securities Industry (Central Depositories) Act 1991 which holds ordinary shares in the

Company for multiple beneficial owners in one securities account (“Omnibus Account”), there is no limit to the number of proxies which the exempt authorised nominee may appoint in respect of each Omnibus Account it holds.

3. Where a member appoints two (2) proxies, the appointment shall be invalid unless he specifies the proportion of his shareholdings to be represented by each proxy. 4. An instrument appointing a proxy shall be in writing and in the case of an individual shall be signed by the appointor or by his attorney; and in the case of a corporate member, shall

be either under its common seal or signed by its attorney or an officer on behalf of the corporation. 5. The instrument appointing a proxy must be deposited with the Share Registrar of the Company, Symphony Share Registrars Sdn Bhd at Level 6, Symphony House, Pusat Dagangan

Dana 1, Jalan PJU 1A/46, 47301 Petaling Jaya, Selangor Darul Ehsan, Malaysia, not less than twenty-four (24) hours before the time appointed for holding the EGM or any adjournment thereof.

6. Pursuant to Paragraph 8.29A of Bursa Malaysia Securities Berhad’s Main Market Listing Requirements, all resolutions set out in this Notice of EGM will be put to vote on a poll. 7. For the purpose of determining a member who shall be entitled to attend the EGM, the Company shall be requesting Bursa Malaysia Depository Sdn Bhd to make available to the

Company a Record of Depositors as at 22 November 2018. Only a depositor whose name appears on the Record of Depositors as at 22 November 2018 shall be entitled to attend the EGM or appoint proxies to attend and/or vote on his/her behalf.

8. By submitting the duly executed proxy form, the member and his/her proxy consent to the Company (and/or its agents/service providers) collecting, using and disclosing the personal data therein in accordance with the Personal Data Protection Act 2010 for the purpose of the EGM and any adjournment thereof.

PROXY FORM



CDS Account No.



Proxy 1 Proxy 2



of _____________________________________________________________________________________________________ (Full Address)




of __________________________________________________________________________________________________________________ (Full Address)



of __________________________________________________________________________________________________________________ (Full Address)




















PROXY FORM



CDS Account No.



Proxy 1 Proxy 2



of _____________________________________________________________________________________________________ (Full Address)




of __________________________________________________________________________________________________________________ (Full Address)



of __________________________________________________________________________________________________________________ (Full Address)




















AFFIXSTAMP

Fold this flap for sealing

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Then fold here ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------

AFFIXSTAMP

SHARE REGISTRAR OF SAPURA ENERGY BERHAD

Symphony Share Registrars Sdn Bhd Level 6, Symphony House Pusat Dagangan Dana 1 Jalan PJU 1A/46, 47301 Petaling Jaya Selangor Darul Ehsan Malaysia

1st fold here ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------

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