SHAREHOLDERS AGREEMENT BETWEEN CENTRALISED TERMINALS SDN BHD AND CHINA AVIATION OIL (SINGAPORE) CORPORATION LTD

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1 1. INTRODUCTION The Board of Directors of Dialog Group Berhad ( DIALOG or the Company ) is pleased to announce that DIALOG s 55% owned company, Centralised Terminals Sdn Bhd ( CTSB ), has on 6 October 2011 entered into a Shareholders Agreement ( SHA ) with China Aviation Oil (Singapore) Corporation Ltd ( CAO ) to establish a joint venture company known as Langsat Terminal (Three) Sdn Bhd ( LgT-3 ) to undertake the proposed design, development, operation, management and maintenance of an oil storage tank terminal facility ( Terminal Facility ) with a storage capacity of 380,000 m 3 within the vicinity of Tanjung Langsat Port, Johor ( Project ). The Project is expected to commence by early 2012 and is expected to complete by end The total development cost of the Project is estimated at RM371 million. CTSB will hold 74% equity stake in LgT-3 and the balance 26% equity stake will be held by CAO. CTSB is 55% owned by DIALOG and 45% owned by MISC Berhad ( MISC ), which is a public company listed on the Main Market of Bursa Malaysia Securities Berhad. CTSB is in the business of investing in companies engaged in developing, managing, operating and maintaining tank terminals. CAO, a public company listed on the Main Board of the Singapore Exchange Securities Trading Limited, is primarily involved in jet fuel supply and trading, international trading of jet fuel and other oil products and investment in oil-related assets. CAO will later enter into a Terminal Usage Agreement with LgT-3 for the lease of tankage and related facilities of the Terminal Facility. 2. DETAILS OF THE SHA 2.1 SALIENT TERMS OF THE SHA a) LgT-3 shall have an initial issued share capital of 20,000,000 ordinary shares of RM1.00 each b) CTSB and CAO shall, within 14 days after the day upon the satisfaction of the conditions precedent as set out in the SHA, respectively subscribe for shares in LgT-3 and make such payment as shall be called by LgT-3 which will result in the issued share capital of LgT-3 being held by CTSB and CAO as follows:- Shareholders No. of shares % of shareholding CTSB 14,800,000 74% CAO 5,200,000 26% TOTAL 20,000, % Page 1 of 5

2 c) The obligations of CTSB and CAO under the SHA is conditional upon the satisfaction of the following conditions precedent within 4 months from the date of the SHA or such other date as the parties may agree in writing: (i) (ii) (iii) (iv) CTSB having established LgT-3 and LgT-3 having entered into (i) a Concession Agreement with Tanjung Langsat Port Sdn Bhd ( TLP ) relating to the grant by TLP to LgT-3, the right and authority, for the entire duration of the concession period of 30 years, to undertake design, development, operation, management and maintenance of the proposed Terminal Facility within the area of land within Tanjung Langsat Port measuring approximately acres in area ( Concession Area ); and (ii) an Agreement to Lease with TLP for a 30-year term lease over the Concession Area for the Terminal Facility; The respective approvals of the Board of Directors of CTSB and CAO and/or where applicable, shareholders of the parties being obtained (i) to proceed with the Project; and (ii) to authorise the subscription of new shares in LgT-3 in accordance with agreed shareholding proportion as set out in the SHA; CTSB having obtained the written agreement of TLP for TLP to build, own and operate the two (2) additional berths required (or such other relevant number of berths as may be mutually agreed by the Parties to be required) in order to support the Project; and CTSB having obtained the written agreement of TLP for TLP to dredge the berth pocket and turning basin of Tanjung Langsat Port at a minimum depth of 14.5 metres in accordance with such specifications to be provided by CTSB. 2.2 EXPECTED COMPLETION The completion of the initial subscription of shares in LgT-3 to reflect the equity stake of CTSB and CAO in LgT-3 is expected to be completed within five (5) months from the date of signing of the SHA or such other date as the parties may agree in writing. 2.3 SOURCES OF FUNDING CTSB will fund its portion (including the initial share subscription) of the eventual equity in LgT-3 by internally generated funds, bank borrowings, proceeds from increase in its share capital and/or advances from its shareholders, of which the breakdown is pending finalization. In this regard, DIALOG s actual cash outlay, which is to be funded from internally generated funds and/or bank borrowings, for its portion (via CTSB) is to be determined later. Page 2 of 5

3 2.4 LIABILITIES TO BE ASSUMED There are no liabilities, including contingent liabilities and guarantees, to be assumed by DIALOG arising from the SHA. 3. RATIONALE AND PROSPECTS The SHA will pave the way for CTSB and CAO to be strategic business partners in the equity ownership and development of the Project. The Project will increase the present total capacity of 647,000 cubic meters to more than 1 million cubic meters for CTSB s investment in tank terminal business in Tanjung Langsat, Johor. The Project will also synergise with DIALOG s investment in terminal terminal business in Kertih, Terengganu and Pengerang, Johor, and will result in an increase in DIALOG s sources of sustainable and recurring income in the future. 4. INFORMATION ON CTSB AND CAO 4.1 CTSB 4.2 CAO CTSB, an entity owned by DIALOG and MISC, was incorporated in Malaysia on 10 January CTSB has an authorised share capital of RM25,000,000 and an issued and paid-up share capital of RM10,019,000. CAO, a company incorporated in the Republic of Singapore, a public company listed on the Main Board of the Singapore Exchange Securities Trading Limited, is primarily involved in jet fuel supply and trading, international trading of jet fuel and other oil products and investment in oil-related assets. 5. FINANCIAL EFFECTS 5.1 SHARE CAPITAL The SHA is not expected to have any effects on the share capital of DIALOG for the current financial year ending 30 June Page 3 of 5

4 5.2 EARNINGS The SHA is not expected to have any material effects on the earnings of DIALOG for the current financial year ending 30 June However, it is expected to contribute positively to the long term future earnings of DIALOG. 5.3 SUBSTANTIAL SHAREHOLDERS SHAREHOLDING The SHA is not expected to have any effect on the substantial shareholders shareholding of DIALOG for the current financial year ending 30 June NET ASSETS The SHA is not expected to have any material effects on the net assets of DIALOG for the current financial year ending 30 June GEARING The SHA is not expected to have any material effects on the gearing of DIALOG for the current financial year ending 30 June RISKS Risk factors affecting the SHA include but are not limited to changes in conditions of competition, economic, business, political and legal framework environment. DIALOG will undertake the necessary efforts to mitigate the various business risks identified. 7. APPROVALS REQUIRED The SHA does not require approvals from the relevant authorities and the shareholders of DIALOG. 8. DIRECTORS AND MAJOR SHAREHOLDERS INTERESTS In so far as the directors of DIALOG are able to ascertain, none of the directors of DIALOG, major shareholders of DIALOG and/or persons connected with them have any interest, whether direct or indirect, in the SHA. Page 4 of 5

5 9. DIRECTORS STATEMENT The Board of Directors of DIALOG after considering the various aspects of the SHA, is of the opinion that the SHA is fair and reasonable to DIALOG and also in the best interest of DIALOG. 10. PERCENTAGE RATIOS PURSUANT TO PARAGRAPH 10.02(G) OF THE MAIN MARKET LISTING REQUIREMENTS OF BURSA MALAYSIA SECURITIES BERHAD The highest percentage ratio applicable to the SHA is 1.7%. This announcement is dated 6 October Attached is the joint press release issued by Dialog Group Berhad and MISC Berhad dated on 6 October Page 5 of 5