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The Board of Directors of Press Metal Berhad ("PMB") is pleased to announce that Wesama Sdn Bhd ("WSB), a wholly-owned subsidiary company of PMB, had on 18 August 2003 entered into a Share Sale Agreement with Aluminium Company of Malaysia Berhad ("ALCOM") to acquire from ALCOM 30,560,002 ordinary shares of RM1.00 each (the "Shares") representing the entire issued and paid-up share capital of Alcom Extrusion Sdn Bhd ("AESB") for a total cash consideration of RM8.0 million (the "Proposed Acquisition").

AESB was incorporated on 10 May 1999 in Malaysia under the Companies Act 1965, as a private limited company. The nature of business carried out by AESB is manufacturing and trading of aluminium extrusion products.

The Authorised Share Capital of AESB is RM50,000,000 comprising 50,000,000 ordinary shares of RM1.00 each of which 30,560,002 ordinary shares of RM1.00 each have been issued and fully paid-up.

The shares in AESB will be acquired free from all liens, charges, equities, right of first refusal, right of pre-emption and encumbrances or security interest of any kind attached thereto.

There are no liabilities to be assumed by WSB pursuant to the Proposed Acquisition.

The purchase consideration was arrived at on a willing buyer and willing seller basis.

On 1 January 2000, ALCOM invested RM30,560,002 into AESB by way of injecting assets and liabilities of its extrusion business.

The purchase consideration of RM8.0 million shall be satisfied entirely in cash via bank borrowings and internal generated funds.

The financial information on AESB for the past three years are as set out in Appendix I.

Presently, PMB and AESB are both leaders in the aluminium extrusion industry. The Proposed Acquisition is in line with the core business of PMB, which forms part of the expansion plan of PMB. With the acquisition, it will enable PMB to further enhance its manufacturing facilities and share of common operations and technology knowledge for the purposes of improving the operational efficiencies and achieving economies of scale.

In addition, the Proposed Acquisition exercise will enable PMB to further increase its participation in the related industry, and reinforce its dominant position in the extrusion market in this region.

The Proposed Acquisition is conditional upon all the following approvals (Approvals) having been obtained in form and substances satisfactory to WSB:-

(a) the approval of the Ministry of International Trade and Industry; and
(b) all such other relevant consents or approvals (whether legal, governmental, regulatory or third parties) as may be necessary for the sale and purchase of the Shares.


within three (3) months from the date of the Share Sale Agreement or such other period as WSB and ALCOM may agree.

The Proposed Acquisition is not subject to the approval of PMBs shareholders.

The consideration of RM8.0 million shall be satisfied in the following manner:-

(a) upon the execution of the Share Sale Agreement, WSB shall pay the deposit of RM1,000,000 (the Deposit) to ALCOMs Solicitors to be dealt with in accordance with Clause 3.2 of the Share Sale Agreement;

Clause 3.2 states that upon receipt of the Deposit, ALCOMs Solicitors shall place the Deposit in an interest-earning account.

(b) on the Completion Date, WSB shall pay or cause to be paid the Balance Consideration of RM7.0 million to ALCOMs Solicitors.

Completion Date shall be the completion of the sale and purchase of the Shares which shall take place thirty (30) days after all the Approvals have been obtained or such other date as WSB and ALCOM may agree.

Share capital and substantial shareholders shareholding

The Proposed Acquisition will not have any effect on the share capital or the substantial shareholders shareholdings of PMB as there will be no issuance of securities in PMB.

The Proposed Acquisition is not expected to have material effect on the earnings of the PMB Group for the financial year ending 31 December 2003 as the completion of the Proposed Acquisition is expected by end of the financial year 31 December 2003. Nevertheless, the Proposed Acquisition is expected to contribute positively to the PMB Group in the future.

Net Tangible Assets (NTA) Per Share

The Proposed Acquisition will not have any effect on the NTA of PMB Group as there will be no issuance of securities in PMB.

The Board, having considered all aspect of the Proposed Acquisition, is of the opinion that the Proposed Acquisition is in the best interests of PMB Group.

None of the Directors, substantial shareholders and/or persons connected to the Directors and/or substantial shareholders of PMB, has any interest, direct or indirect, in the Proposed Acquisition.

The Share Sale Agreement may be inspected at the Registered Office of PMB at Level 7, Setia 1, 15 Lorong Dungun, Damansara Heights, 50490 Kuala Lumpur, during normal business hours from Monday to Friday (except public holidays) within 14 days from the date of this announcement.

The Proposed Acquisition is expected to be completed by 31 December 2003.

The Malaysian economy in the year 2003 is projected to have a sustained real GDP growth in the region of 4.5% as compared to 4.2% in the year 2002. However, unlike year 2002, when the public sector remained the principal driver of economy growth, private sector demand is expected to assume a more significant role in driving expansion in year 2003. The improved domestic fundamentals would provide support for the sustained consumption and continued recovery in private investment. The public sector, whilst consolidating, would remain supportive of growth. External demand, however, remains a concern for possible, downside risks. Malaysias increased resilience provides the authorities with the policy flexibility to enhance domestic sources of growth. Hence, policies in year 2003 would focus on promoting-led private sector driven growth, with the Government of Malaysia providing a positive enabling environment for private sector activities and initiatives.

(Source: Annual Report 2002, BNM dated 26 March 2003)

Barring any unforeseen circumstances, PMB Group is expected to benefit from the recovery of the Malaysian economy and growth in line with the Government policies implemented.

The Proposed Acquisition is subject to various risk factors, which include, inter-alias, the general business risk in relation to the general economic risk, political risk, exposure to construction industry, competitive condition, reliance on the key management and reliance on raw material supply, quality and price.

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