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1. INTRODUCTION

Alliance Investment Bank Berhad (Alliance) on behalf of the Board of Directors of STB (Board), announces that the Company is proposing to undertake the following:


(i) A proposed private placement of up to 11,350,000 new ordinary shares of RM0.10 each in STB (STB Shares), representing up to 10% of the existing issued and paid-up share capital of STB at an issue price to be determined later (Proposed Private Placement); and

(ii) A proposed special issue of up to 53,507,200 STB Shares, representing up to 30% of the enlarged issued and paid-up share capital of STB, i.e., after the Proposed Private Placement and Proposed Special Issue, at an issue price to be determined later (Proposed Special Issue).

2. DETAILS OF THE PROPOSALS

2.1 PROPOSED PRIVATE PLACEMENT

2.1.1 Size of the Proposed Private Placement

The size of the Proposed Private Placement will be up to 11,350,000 STB Shares (Placement Shares) representing up to 10% of the existing issued and paid-up share capital of STB.

However, in the event the Proposed Private Placement is implemented after the Proposed Special Issue (as described in Section 2.2 hereafter), the size of the Proposed Private Placement will be up to 16,214,300 Placement Shares, representing up to 10% of the enlarged issued and paid-up share capital of the Company after the Proposed Special Issue at an issue price to be determined later.

2.1.2 Proposed Private Placement Arrangement

STB has appointed Alliance as the placement agent to procure prospective placees for the Placement Shares on a best effort basis. At this juncture, the placees have yet to be identified.

The Placement Shares will be placed out by Alliance to selected qualified third party investors who qualify under Schedule 6 and/or 7 of the Capital Markets and Services Act 2007 (CMSA).

In accordance to the Guidance Note 8C of the Policies and Guidelines on Issue/Offer of Securities issued by the Securities Commission (SCs Guidelines), the Placement Shares will not be placed to the following parties:

(i) directors, substantial shareholders or chief executive officer of STB or the holding company of the issuer (Interested Persons), whether in their own names or through nominees;
(ii) persons connected to the Interested Persons;
(iii) nominee companies, unless the names of the ultimate beneficiaries are disclosed; and
(iv) parties connected to the placement agent, except where such parties are:

· statutory institutions managing funds belonging to contributors or investors who are members of the public; or
· entities established as collective investment schemes that are considered to represent public investors,

who are not substantial shareholders of STB,

unless shareholders approval have been sought at the Extraordinary General Meeting (EGM) to be convened for the precise terms and conditions of the issue.

The Proposed Private Placement may be implemented in tranches depending on the market sentiment and pricing of the Placement Shares at the point of implementation. In this regard, there could potentially be several price-fixing dates pursuant to the Proposed Private Placement depending on the number of tranches and timing of implementation. In any case, the Proposed Private Placement is expected to be completed by second (2nd) quarter of 2008.

In the event the Proposed Private Placement and the Proposed Special Issue are expected to be implemented simultaneously, the SC and Ministry of International Trade and Industrys (MITI) requirements to set-aside 30% of Placement Shares for subscription by Bumiputera investors are envisaged to be satisfied via the Proposed Special Issue.

In the event the Proposed Special Issue is not implemented, 30% of Placement Shares is proposed to be set-aside for subscription by Bumiputera investors.

2.1.3 Basis of Pricing

The issue price of the Placement Shares shall be determined at a later date following the receipt of the last approval from the relevant authorities for the Proposed Private Placement.

The placement of the Placement Shares to the third party investors will be based on the weighted average market price (WAMP) of the STB Shares for the five (5) market days immediately prior to the price-fixing date, with a discount, if any, of not more than 10% to the WAMP of the underlying shares. In any event, the issue price of the Placement Shares shall not be lower than RM0.10, being the par value of STB Shares.

For the purpose of this announcement, the WAMP of the STB Shares for the five (5) market days up to 4 December 2007, being the latest practicable date prior to this announcement, was RM0.26.

As prescribed in Guidance Note 8C of the SCs Guidelines, the payment for the Placement Shares shall be made by the placees to STB within five (5) market days from the price-fixing date, which will be determined at a later date.

2.1.4 Ranking of Placement Shares

The Placement Shares shall, upon allotment and issue, rank pari passu in all respects with the existing STB Shares of the Company except that they will not be entitled to participate in any rights, allotments, dividends and/or any other distributions that may be declared, made or paid before the date of allotment of the said Placement Shares.

2.2 PROPOSED SPECIAL ISSUE

2.2.1 Size of the Proposed Special Issue

The size of the Proposed Special Issue will be up to 53,507,200 STB Shares (Special Issue Shares), representing up to 30% of the enlarged issued and paid-up share capital of the Company, i.e. after the Proposed Private Placement and Proposed Special Issue, at an issue price to be determined later.

However, in the event the Proposed Special Issue is implemented prior to the Proposed Private Placement, the size of the Proposed Special Issue will be up to 48,642,900 Special Issue Shares, representing up to 30% of the enlarged issue and paid-up share capital of the Company after the Proposed Special Issue at an issue price to be determined later.

2.2.2 Proposed Special Issue Arrangement

The shares for the Proposed Special Issue will be issued to Bumiputera investors approved by MITI to comply with the Bumiputera equity condition imposed by the SC vide its letter dated 31 March 2006 and MITIs letter dated 18 October 2004 respectively. The Bumiputera investors shall also be persons who qualify under Schedule 6 and/or 7 of the CMSA.

Alliance has been appointed as the placement agent in relation to the Proposed Special Issue to procure prospective placees for the Special Issue Shares on a best effort basis. The Special Issue Shares will be placed out by Alliance to identified Bumiputera investors. At this juncture, the bumiputera investors have yet to be identified.

In accordance to the Guidance Note 8C of the SCs Guidelines, the Special Issue Shares will not be placed to the following parties:

(i) Interested Persons, whether in their own names or through nominees;
(ii) persons connected to the Interested Persons;
(iii) nominee companies, unless the names of the ultimate beneficiaries are disclosed; and
(iv) parties connected to the placement agent, except where such parties are:

· statutory institutions managing funds belonging to contributors or investors who are members of the public; or
· entities established as collective investment schemes that are considered to represent public investors,

who are not substantial shareholders of STB,

unless shareholders approval have been sought at the EGM to be convened for the precise terms and conditions of the issue.

The Proposed Special Issue may be implemented in tranches depending on the market sentiment and pricing of the Special Issue Shares at the point of implementation. In this regard, there could potentially be several price-fixing dates pursuant to the Proposed Special Issue depending on the number of tranches and timing of implementation. In any case, the Proposed Special Issue is expected to be completed by second (2nd) quarter of 2008.

2.2.3 Basis of Pricing

The issue price of the Special Issue Shares shall be determined at a later date following the receipt of the last approval from the relevant authorities for the Proposed Special Issue.

The Proposed Special Issue to Bumiputera investors will be based on the WAMP of the STB Shares for the five (5) market days immediately prior to the price-fixing date, with a discount, if any, to be determined later. In any event, the issue price shall not be lower than RM0.10, being the par value of the STB Shares.

For the purpose of this announcement, the WAMP of STB Shares for the five (5) market days up to 4 December 2007, being the latest practicable date prior to this announcement, was RM0.26.

As prescribed in Guidance Note 8C of the SCs Guidelines, the payment for the Special Issue Shares shall be made by the placees to STB within five (5) market days from the price fixing date, which will be determined at a later date.

2.2.4 Ranking of the Special Issue Shares

The Special Issue Shares shall, upon allotment and issue, rank pari passu in all respects with the existing STB Shares except that they will not be entitled to participate in any rights, allotments, dividends and/or any other distributions that may be declared, made or paid before the date of allotment of the said Special Issue Shares.

3. UTILISATION OF PROCEEDS

For illustrative purposes only, assuming both the Placement Shares and the Special Issue Shares are issued at RM0.26 per STB Share, which represents the WAMP of STB Shares for the five (5) market days to 4 December 2007 (being the latest practicable date prior to the date of this announcement), the Company is expected to raise up to RM16,862,872. However, the exact amount of gross proceeds to be raised from the Proposals is dependent on the actual issue price and the actual number of Placement Shares and Special Issue Shares to be issued, which will be determined at a later date.

The estimated proceeds raised will be used for the following purposes:

Purpose	RM000
Working capital	6,102
Repayment of bank borrowings	10,031	*
Estimated expenses for the Proposals	730	^
Total	16,863

Notes:

* The repayment of the bank borrowings will result in gross interest savings of approximately RM525,000 per annum, based on the average interest rate of 5.23% per annum. The average interest rate comprises the interest rates charged for term loan and hire purchase of the Company.

^ Any variations to the actual amount raised or the actual expenses incurred for the Proposed Private Placement and/or Proposed Special Issue from the above estimated amounts will result in an adjustment of the same amount to the amount of proceeds allocated for working capital.

For clarity, the proceeds from the Proposed Private Placement and/or Proposed Special Issue shall, firstly be used for the settlement of estimated expenses, secondly for the repayment of bank borrowings and finally, any balance from the said proceeds shall be used for working capital.

4. RATIONALE FOR THE PROPOSALS

The Proposed Private Placement will enable STB to raise additional working capital expeditiously and to reduce the reliance on borrowings, thereby resulting in interest savings.

The Proposed Special Issue is undertaken to comply with the SC and MITIs conditions to raise its Bumiputera equity to 30% of the enlarged issued and paid-up share capital within one (1) year after STB has achieved the profit track record requirement for listing on the Second Board of the Bursa Malaysia Securities Berhad (Securities Exchange) or five (5) years after being listed on the MESDAQ Market of Securities Exchange, whichever is earlier.

STB has achieved the profit track record required for listing on the Second Board of Securities Exchange based on its audited financial statements for the three (3) financial years to 30 June 2007. Accordingly, STB is required to comply with the Bumiputera equity condition by 30 June 2008.

5. EFFECTS OF THE PROPOSALS

For illustrative purposes only, the effects of the Proposals below assume the Proposed Special Issue is effected immediately after the Proposed Private Placement.

5.1 Issued and paid-up share capital

The effects of the Proposals on the issued and paid-up share capital of STB are set out in Table 1 below.

5.2 Net Assets (NA)

Based on the audited consolidated financial statements of STB for the financial year ended 30 June 2007, the effects of the Proposals on the NA per share of STB and its subsidiary companies (Group) is set out in Table 2 below.

5.3 Earnings

The Proposals are not expected to have any material effect on the consolidated earnings of STB for the financial year ending 30 June 2008. Nevertheless, the Proposals are expected to result in gross interest savings of approximately RM525,000 per annum, based on the average interest rate of 5.23% per annum applicable to the Groups borrowings, arising from the repayment of bank borrowings and will also enable the Group to finance a portion of its working capital requirement and not incur interest of approximately RM496,000 per annum on that portion of working capital, based on the weighted average interest rate as at 30 June 2007 of 8.13% per annum.

Nevertheless, the consolidated earnings per share of STB in the future would depend on the returns generated from the utilisation of the proceeds arising from the Proposals.

5.4 Gearing

Based on the audited consolidated financial statements of STB for the financial year ended 30 June 2007, the Groups gearing level is approximately 0.52 times. The Proposals are expected to reduce the gearing level of the Group to approximately 0.12 times as part of the proceeds are expected to be utilised for repayment of bank borrowings as shown in Table 2 below.

5.5 Dividends

The Proposals are not expected to have any material effect on the dividend policy of the Company, for the financial year ending 30 June 2008 and any declaration of future dividends will be dependent upon, inter-alia, the retained profits, cashflow position and the funding requirements of the Group.

5.6 Substantial Shareholders Shareholdings

The effects of the Proposals on the shareholdings of the substantial shareholders of STB are set out in Table 3 below.

6. APPROVALS REQUIRED

The Proposals are conditional upon approvals being obtained from the following parties:

(a) SC for:

(i) the Proposed Private Placement and Proposed Special Issue; and
(ii) the listing of and quotation for the Placement Shares and Special Issue Shares to be issued pursuant to the Proposed Private Placement and Proposed Special Issue.

(b) Equity Compliance Unit (ECU) of the SC pursuant to the Guidelines on the Acquisition of Interests, Mergers and Take-overs by Local and Foreign Interests issued by the Foreign Investment Committee;

(c) MITI for the Proposals and the recognition of the Bumiputera placees to be identified as approved Bumiputera investors and their eventual direct/indirect shareholdings in STB to be approved as Bumiputera shareholdings in STB, to comply with the Bumiputera equity condition;

(d) Securities Exchange for the listing of and quotation for the Placement Shares and the Special Issue Shares to be issued pursuant to the Proposals;

(e) The shareholders of STB at an EGM to be convened; and

(f) Any other relevant authorities, if required.

The Proposals are not inter-conditional.


7. DIRECTORS AND MAJOR SHAREHOLDERS INTERESTS

None of the directors and/or major shareholders of the Company or persons connected with them have any direct or indirect interest in the Proposals.

8. DIRECTORS STATEMENT

The Board, having considered all aspects of the Proposals, is of the opinion that the Proposals are in the best interest of the Company.

9. ADVISER

Alliance has been appointed as the adviser for the Proposals.


10. APPLICATION TO THE AUTHORITIES

Applications to the regulatory authorities namely SC, ECU of the SC and MITI for the Proposals are expected to be made within two (2) months from the date of this announcement.

11. DEPARTURE FROM SCS GUIDELINES

The Proposals do not depart from the SCs Guidelines for the MESDAQ Market.

12. ESTIMATED TIME FRAME FOR THE COMPLETION OF THE PROPOSALS

Barring unforeseen circumstances, the Proposals are expected to be completed by the second (2nd) quarter of 2008.

This announcement is dated 5 December 2007.

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