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We refer to the Company's announcement dated 14 November 2003 wherein it was announced that the Company is proposing to acquire the entire issued and paid-up share capital of Eurologic Sdn Bhd ("Eurologic") which in turn is proposing to acquire 65% equity interest in Konsortium (Proposed Acquisition of Eurologic). As announced, Konsortium has been granted an exclusive right to undertake the privatisation of Jabatan Bekalan Air Negeri Sembilan (Privatisation Project). Konsortium is presently negotiating the terms and conditions of the 30-year concession agreement to be executed (Concession Agreement) with the State Government of Negeri Sembilan (State Government).

Further to that announcement, on behalf of the Board of Directors of the Company ("Board"), AmMerchant Bank Berhad ("AmMerchant Bank") would like to announce that Lembaga Pemegang-Pemegang Amanah Yayasan Negeri Sembilan (Yayasan) has on 7 November 2003 transferred 65% of its equity interest in Konsortium to Eurologic. Yayasan currently holds the remaining 35% equity interest.

In addition, on behalf of the Board, AmMerchant would like to announce that Konsortium has via a memorandum of agreement entered into between Konsortium and Zecon on 17 November 2003 granted Zecon an exclusive award to undertake the design, construction, engineering, supply and commissioning of various aspects of the infrastructure works relating to the Privatisation Project including source development and water treatment plant works, development and the upgrading of the distribution systems, non revenue water reduction program works and rehabilitation works (Works), as such works are granted to Konsortium under the Concession Agreement.

Zecon is listed on the Second Board of the Kuala Lumpur Stock Exchange (KLSE). Zecon provides foundation and civil engineering and building contract works whilst its subsidiaries operate quarry, sells aggregates and develops property.

The salient terms of the MOA are as follows :-

(a) The value of the award is estimated to be approximately RM3.9 billion;

(b) The parties to the MOA has agreed on a good faith basis to discuss and finalise the relevant terms, conditions and details of the Works and enter into an engineering, procurement and construction contract (EPC Contract) (Proposed Provision of EPC Works) within three (3) months of the execution of the Concession Agreement or such further time as mutually agreed between the parties, whereupon the MOA shall be superseded by the EPC Contract and cease to have any effect;

(c) The scope of the Works and the terms and conditions of the EPC Contract are contingent on and subject to the final terms and conditions of the Concession Agreement;

(d) The execution of the EPC Contract is conditional upon Konsortium executing a valid and binding Concession Agreement with the State Government which is expected within six (6) months of the date of the MOA; and

(e) If the Concession Agreement is not executed within the period stated under item (d), the parties to the MOA agree that the validity of the MOA may be extended by mutual agreement between the parties, failing which the MOA shall automatically lapse upon expiry of the said period and neither party shall have any claim against each other.

Pursuant to the Proposed Acquisition of Eurologic, Konsortium will become an indirect 65% owned subsidiary of SCIB. Therefore, by virtue of Section 6(A) of the Companies Act, 1965 and pursuant to Chapter 10 of the Listing Requirements of the KLSE, the Proposed Provision of EPC Works by Zecon to Konsortium is deemed to be a recurrent related party transaction and shall be subject to the shareholders approval.

Tuan Haji Zainal Abidin bin Haji Ahmad (Tuan Haji Zainal) is the Managing Director of the Company and deemed substantial shareholder of SCIB by virtue of his substantial shareholding in Hydrostar Sdn Bhd. He is also the Group Managing Director/ Chief Executive Director and deemed substantial shareholder of Zecon.

Tuan Haji Zaidi bin Haji Ahmad (Tuan Haji Zaidi) who is the Executive Director of the Company is a person connected with Tuan Haji Zainal by virtue of him being the brother of Tuan Haji Zainal.

Both Tuan Haji Zainal and Tuan Haji Zaidi are also brothers of Tuan Haji Zainurin bin Hj Ahmad, an Executive Director of Zecon.

Datu Ahmad Tarmizi bin Sulaiman (Datu Ahmad Tarmizi) who is a non-independent non-executive director of the Company was a director of Zecon within the preceding 12 months of the date of the MOA. Datu Ahmad Tarmizi had on 13 November 2003 resigned as a non-independent non-executive director of Zecon.

Pursuant to Chapter 10 of the Listing Requirements of the KLSE, Tuan Haji Zainal, Tuan Haji Zaidi and Datu Ahmad Tarmizi are all deemed interested in the Proposed Provision of EPC Works.

The MOA will be available for inspection at the registered office of SCIB at Lot 1258, Jalan Utama, Pending Industrial Estate 93450 Kuching, Sarawak during normal office hours from Monday to Friday (except public holidays) for a period of three (3) months from the date of this announcement.

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