PROPOSED PRIVATE PLACEMENT OF UP TO 10% OF THE ISSUED AND PAID-UP SHARE CAPITAL OF PLABS ( PROPOSED PRIVATE PLACEMENT )

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1 PETERLABS HOLDINGS BERHAD ( PLABS OR THE COMPANY ) PROPOSED PRIVATE PLACEMENT OF UP TO 10% OF THE ISSUED AND PAID-UP SHARE CAPITAL OF PLABS ( PROPOSED PRIVATE PLACEMENT ) 1. INTRODUCTION On behalf of the Board of Directors of PLabs ( Board ), RHB Investment Bank Berhad ( RHB Investment Bank ) wishes to announce that the Company proposes to undertake a private placement of up to 18,800,000 new ordinary shares of RM0.10 each in the Company ( PLabs or ) ( Placement ), representing up to 10% of the issued and paid-up share capital of the Company to third party investor(s) to be identified at an issue price to be determined later. 2. DETAILS OF THE PROPOSED PRIVATE PLACEMENT 2.1 Placement Size As at 27 March 2015, being the latest practicable date preceding the date of this announcement ( LPD ), the issued and paid-up share capital of the Company is RM18,800,000 comprising 188,000,000. The Proposed Private Placement will involve the issuance of up to 18,800,000 new PLabs, representing up to 10% of the issued and paid-up share capital of the Company. The Proposed Private Placement will be undertaken in accordance with the general mandate pursuant to Section 132D of the Companies Act, 1965 ( Act ) obtained from the shareholders of the Company in its last annual general meeting ( AGM ) convened on 25 June 2014 ( General Mandate ). The actual number of Placement to be issued pursuant to the Proposed Private Placement will be determined at a later stage. In any event, the total number of Placement to be issued shall not exceed 10% of the total issued and paid-up share capital of the Company at the point of issuance. 2.2 Placement arrangement The Placement shall be placed to third party investor(s) to be identified later. In accordance with Paragraph 6.05(c) of the ACE Market Listing Requirements of Bursa Malaysia Securities Berhad ( Bursa Securities ), the Placement are not intended to be placed to the following parties: (i) (ii) (iii) a director, major shareholder or chief executive of PLabs or a holding company of PLabs ( Interested Persons ); a person connected with the Interested Person; and nominee corporations, unless the names of the ultimate beneficiaries are disclosed. If the Board is unable to identify sufficient placees to subscribe for the entire portion of the Placement at one time, the Proposed Private Placement may be implemented in tranches within six (6) months from the date of Bursa Securities approval for the Proposed Private Placement or any extended period as may be approved by Bursa Securities. 1

2 2.3 Basis of arriving at the issue price of the Placement The issue price of the Placement shall be determined and fixed by the Board after receiving all relevant approvals for the Proposed Private Placement ( Price Fixing Date ). The Placement may be issued at a discount of not more than 10% to the five (5)-day volume weighted average market price ( VWAP ) of PLabs immediately preceding the Price Fixing Date. In any case, the issue price of the Placement will not be lower than RM0.10, being the par value of PLabs. For illustrative purposes only, the indicative issue price of the Placement are assumed at RM0.24 per Placement Share, representing a discount of approximately 7.69% to the five (5)-day VWAP of PLabs up to and including the LPD of RM0.26 per Share. The Board wishes to emphasise that the indicative discount of approximately 7.69% to the five (5)-day VWAP of PLabs should not be taken as an indication of or reference to the actual discount rate of the issue price for the Placement, which will be determined and announced at the price fixing date. 2.4 Ranking of the Placement The Placement shall, upon allotment and issue, rank pari passu in all respects with the existing PLabs, save and except that the Placement shall not be entitled to any dividends, rights, allotments and/or other distributions that may be declared, made or paid prior to the date of allotment and issuance of the Placement. 2.5 Listing of and quotation for the Placement An application will be made to Bursa Securities for the listing of and quotation for the Placement on the ACE Market of Bursa Securities. 2.6 Utilisation of proceeds The exact amount of proceeds to be raised from the Proposed Private Placement cannot be determined at this juncture as the amount would depend on the issue price and the actual number of Placement to be issued. For illustrative purposes only, based on an indicative issue price of RM0.24 per Placement Share, representing the five (5)-day VWAP of PLabs up to and including the LPD, the Proposed Private Placement is expected to raise gross proceeds of up to approximately RM4.51 million. The proceeds will be utilised by PLabs and its subsidiary companies ( PLabs Group or Group ) in the following manner: Purpose of utilisation Estimated timeframe for utilisation RM 000 Working capital (1) Within 12 months 4,412 Estimated expenses for the Proposed Private Within 1 month 100 Placement (2) Total 4,512 Notes: (1) The Group intends to utilise the proceeds to be raised from the Proposed Private Placement for payment to creditors for purchase of raw materials and other day-to-day operating expenses. 2

3 (2) The estimated expenses consist of, amongst others, estimated professional fees, fees payable to authorities, shares issuance associated costs and other miscellaneous expenses, including estimated placement fee to be incurred in relation to the Proposed Private Placement. Any variation in the actual amount of expenses will be adjusted to / from PLabs Group s working capital. 3. RATIONALE FOR THE PROPOSED PRIVATE PLACEMENT The Proposed Private Placement will enable PLabs to raise funds to meet its working capital requirements and/or to fund and also strengthen the Company s capital base. After due consideration of the various methods of fund raising, the Board is of the opinion that the Proposed Private Placement is an appropriate avenue for raising funds for the following reasons: (i) (ii) (iii) the Proposed Private Placement will enable the Company to raise the requisite funds without incurring additional interest expense, thereby minimising any potential cash outflow in respect of interest servicing; the Proposed Private Placement will allow the Group to raise funds expeditiously and in a more cost-effective manner as opposed to other fund raising options such as a rights issue; and the Proposed Private Placement will increase the capital base of the Company and further strengthen the balance sheet of the Group. 4. EFFECTS OF THE PROPOSED PRIVATE PLACEMENT For illustrative purposes only, the effects of the Proposed Private Placement are set out in the following manner: 4.1 Issued and paid-up share capital The proforma effects of the Proposed Private Placement on the issued and paid-up share capital of PLabs are as follows: No. of RM Issued and paid-up share capital as at LPD 188,000,000 18,800,000 to be issued pursuant to the Proposed Private 18,800,000 1,880,000 Placement Enlarged issued and paid-up share capital 206,800,000 20,680,000 3

4 4.2 Net assets ( NA ), NA per Share and gearing Based on the audited consolidated statement of financial position of PLabs Group as at 31 December 2013, the proforma effects of the Proposed Private Placement on the NA, NA per Share and gearing of the Group are as follows: Audited as at RM After the Proposed Private Placement RM Share capital 18,800,000 20,680,000 Share premium 2,690,914 5,322,914 (1) Unappropriated profits 8,972,800 8,872,800 (2) Shareholders funds/na 30,463,714 34,875,714 No. of in issue 188,000, ,800,000 NA per Share (RM) Total interest bearing borrowings 5,832,314 5,832,314 Gearing (times) Note: (1) Assuming the issuance of 18,800,000 Placement based on an indicative issue price of RM0.24 per Placement Share, representing the five (5)-day VWAP of PLabs up to and including the LPD. (2) After deducting estimated expenses relating to the Proposed Private Placement of approximately RM100, Substantial shareholders shareholding The proforma effect of the Proposed Private Placement on the shareholdings of the substantial shareholders of PLabs as at the LPD are as follows: As at the LPD After the Proposed Private Placement Direct Indirect Direct Indirect Substantial shareholders No. of % No. of % No. of % No. of % Teo Chin Heng 25,565, ,565, Lim Tong Seng 19,943, ,943, Dr. Teo Kooi Cheng 15,898, ,898, Earnings and earnings per Share ( EPS ) The Proposed Private Placement is not expected to have any material effect on the earnings and EPS of the Group for the financial year ending 31 December The EPS of the Group is expected to be diluted as a result of the increase in the number of in issue pursuant to the issuance of Placement under the Proposed Private Placement. The effects of the Proposed Private Placement on the future earnings and/or EPS of the Group would depend on, among others, the actual number of new issued pursuant to the Proposed Private Placement. 4

5 Nevertheless, over time, the Board is confident that the Proposed Private Placement is expected to contribute positively to the future consolidated earnings of the Group through the proposed utilisation of proceeds from the issuance of the Placement. 4.5 Convertible securities As at the date of this announcement, PLabs does not have any existing convertible securities. 5. APPROVALS REQUIRED The Proposed Private Placement is subject to the following approvals being obtained: (i) (ii) Bursa Securities, for the listing of and quotation for the Placement to be issued pursuant to the Proposed Private Placement on the ACE Market of Bursa Securities; and any other relevant authorities, if required. The Company had obtained approval from its shareholders at its last AGM held on 25 June 2014 pursuant to Section 132D of the Act and subject to the approvals of the relevant governmental and/or regulatory authorities, the Board is empowered to issue and allot shares of the Company from time to time and upon such terms and conditions and for such purposes as the directors may deem fit, provided that the aggregate number of issued shall not exceed ten per centum (10%) of the total issued and paid-up share capital of the Company. Such authority shall continue in force until the conclusion of the next AGM of the Company. In the event the Proposed Private Placement is not completed prior to the next AGM of the Company, the Proposed Private Placement will be conditional upon the approval being obtained from its shareholders at the next AGM of the Company for the resolution authorising PLabs to issue new pursuant to Section 132D of the Act. 6. DIRECTORS AND MAJOR SHAREHOLDERS INTERESTS OR PERSONS CONNECTED None of the directors and/or major shareholders of PLabs and/or persons connected to them have any interest, direct or indirect, in the Proposed Private Placement. 7. DIRECTORS RECOMMENDATION The Board, after having considered all aspects of the Proposed Private Placement, is of the opinion that the Proposed Private Placement is in the best interests of the PLabs Group and its shareholders. 8. ADVISER AND PLACEMENT AGENT RHB Investment Bank has been appointed by the Company to act as the Adviser and Placement Agent for the Proposed Private Placement. 5

6 9. APPLICATION TO THE AUTHORITIES Barring unforeseen circumstances, the application to Bursa Securities in relation to the Proposed Private Placement is expected to be made within one (1) month from the date of this announcement. 10. ESTIMATED TIMEFRAME FOR COMPLETION Barring unforeseen circumstances and subject to all the required approvals being obtained, the Board expects the Proposed Private Placement to be completed by the second half of This announcement is dated 30 March