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The Board of Directors of Malaysia Building Society Berhad (MBSB or the Company) wishes to announce that the Company has entered into a Sale and Purchase Agreement (SPA) dated 6 September 2006 with Relevant City Sdn Bhd (Purchaser) for the disposal of seven (7) pieces of properties for a sale consideration of RM12,500,000.00 (Disposal).

The details of the seven (7) pieces of properties in the Disposal are as follows:



	Description	Land Area In Acres
1	Geran Hakmilik 6649, Lot 293	17.24
2	Geran Hakmilik 163, Lot 294	2.08
3	Geran Hakmilik 30, Lot 316	3.06
4	Geran Hakmilik 995, Lot 1795	0.13
5	Geran Hakmilik 802, Lot 1631	0.00
6	Geran Hakmilik 928, Lot 1544	0.57
7	Geran Hakmilik 806, Lot 1545	0.05
	Total	23.14



The above properties are collectively referred to as the Properties.

The Properties are located in Mukim 9, District of Barat Daya, Pulau Pinang. Messrs Akram & Co had on 20 April 2006 ascribed an open market value of RM12,000,000.00 to the Properties.

The Company had on 14 April 2004 acquired the Properties for RM10,000,000.00 via a settlement agreement with a Companys corporate borrower. The Company has since then classified the Properties as foreclosure properties.

The sale consideration of RM12,500,000.00 for the Disposal was arrived at on a willing buyer willing seller basis after taking into account the open market value ascribed to the Properties of RM12,000,000.00.

The audited net book value of the Properties as at 31 December 2005 was RM10,000,000.00.

The SPAs salient terms, inter-alia, are as follows:

(i) The Properties shall be purchased free from encumbrances together with vacant possession;

(ii) The tenure of the SPA is four (4) months from the date of the SPA;

(iii) 10% of the sale consideration as deposit i.e. RM1,250,000.00 to be paid upon execution of the SPA  the RM1,250,000.00 was paid upon the execution of the SPA;

(iv) The balance of the sale consideration of RM11,250,000.00 shall be paid within three (3) months from the date of the SPA (Completion Date) or as the case may be, at an extended completion date which is one (1) month from the date of expiry of the Completion Date (the Extended Completion Period) subject to interest at the rate of 10% per annum calculated on a daily basis from the first day of the Extended Completion Period to the day the balance of the sale consideration is paid in full;

(v) Default by the Purchaser

In the event the Purchaser failing or refusing to complete the Disposal, the Company shall be entitled to terminate the SPA and the deposit of RM1,250,000.00 shall be forfeited by the Company and the balance of the monies paid by the Purchaser, if any, shall be refunded free of interest to the Purchaser by the Company within 21 days from the date the Company exercise its right of forfeiture.

(vi) Default by the Company

In the event the Company failing or refusing to complete the Disposal or in breach of any provisions of the SPA when the Purchaser shall have performed all its obligations, the Purchaser shall be entitled to take such actions as may be available to the Purchaser at law to enforce specific performance of the SPA or alternatively terminate the SPA and the Company shall refund the deposit paid within 21 days from the date of receipt of notice of termination from the Purchaser.

The Purchaser, Relevant City Sdn Bhd (736323-P), is incorporated in Malaysia under the Companies Act, 1965. Its registered address is at 14-1 Persiaran 65C, Pekeliling Business Centre, Jalan Pahang Barat Off Jalan Tun Razak 53000 Kuala Lumpur, Wilayah Persekutuan.The principal activities of the Purchaser are general trading, investment holding and property investment.

The Disposal is in line with the Companys objective to dispose of foreclosure properties acquired through loan settlements.

There are no conditions precedent in the Disposal.

Based on Chapter 10 of Listing Requirements of Bursa Malaysia Securities Berhad, no shareholders approval is required for the Disposal.

The proceeds of RM12,500,000.00 from the Disposal would be utilised for working capital, commission payable relating to the Disposal and/or repayment of borrowings.

The Disposal will not have any effect on the share capital and substantial shareholders shareholdings as there are no issuance of shares or other securities.

The Disposal is expected to result in a gain of RM2.375 million to the Company and of the Group for the financial year ending 31 December 2006 after taking into account the commission payable in relation to the Disposal.

The basic earnings per share of the Group for the financial year ending 31 December 2006 would improve by 0.70 sen arising from the Disposal.

The Disposal will not have any material effect on the net tangible assets per share of the Company and of the Group.

None of the Directors and/or major shareholders of the Company or persons connected to them have any interest, direct or indirect, in the Disposal.

The Board of Directors of the Company is of the opinion that the Disposal is in the best interests of the Company and of the Group.

The Disposal does not involve the issuance or offer of shares or securities. As such, the Disposal has not departed from the Securities Commissions Policies and Guidelines and Offer of Securities.

The SPA and the valuation report (and letter) can be inspected at the Companys registered office at 11th Floor, Wisma MBSB, 48 Jalan Dungun, 50470 Kuala Lumpur at normal business hours on Mondays to Fridays (except public holidays) within 14 days from the date of this announcement .

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