Reference is made to the earlier announcements in relation to the following:

(i) the joint venture agreement entered into between APSB and CCPSB (collectively, the “Parties”) on 26 December 2013 (“Joint Venture Agreement”) for the development and construction of an integrated development project comprising a retail podium, three (3) tower blocks of office suites and two (2) tower blocks of hotel suites (“Project”), on an en-bloc development land which was made up of 84 parcels of land located along Jalan Tampoi (adjacent to Damansara Aliff), Tampoi, Johor Bahru, Johor Darul Takzim which were subsequently amalgamated and registered under a single title held under Geran 544822, Lot 48975, Bandar Johor Bahru, District of Johor Bahru, Johor Darul Takzim (“Development Land”) (“Joint Venture”), as well as the various supplemental agreements to vary, among others, certain components of the Project,

(the Joint Venture Agreement and the various supplemental agreements are hereinafter collectively referred to as the “JVAs”); and

(ii) the conditional settlement agreement, put option agreement and call option agreement entered into between the Parties on 29 March 2019 to vary the terms of the JVAs (collectively, the “First Settlement Agreement”).

On 25 February 2020, the Company was made to understand that Capital World Limited, the ultimate holding company of CCPSB, had proposed to undertake a scheme of arrangement for the purposes of implementing and facilitating the restructuring of its debt obligations and liabilities. CCPSB had also on 14 February 2020 filed an application in the High Court of Malaya, Kuala Lumpur (“High Court”) for an order to place itself under judicial management (“JM Proceedings”). Pursuant to an order of the Judicial Commissioner of the High Court dated 13 March 2020 (“JM Order”), CCPSB was placed under judicial management and a judicial manager (“Judicial Manager”) was appointed to manage the affairs, business and property of CCPSB during the period of the JM Order.

Subsequently, APSB had vide its letter dated 3 April 2020 notified CCPSB of its failure to fulfil the remaining conditions precedent as set out in the First Settlement Agreement by 28 March 2020 i.e. the last day of the extended conditional period of the First Settlement Agreement and accordingly, the First Settlement Agreement had since lapsed. APSB had then on 22 May 2020 filed an application to the High Court to, inter alia, intervene in the JM Proceedings and set aside the JM Order. While the High Court allowed the said intervener application, the application to set aside the JM Order was dismissed by the High Court. Later on, the Judicial Manager had on 7 August 2020 filed an application for, among others, an extension of the JM Order which was then allowed by the High Court. On 10 September 2020, APSB had then filed appeals against the High Court’s dismissal of the application to set aside the JM Order and the High Court’s decision to allow the extension of the JM Order (collectively, the “APSB’s Appeals”).

While the APSB’s Appeals remain pending, APSB continued to explore other alternatives with CCPSB to arrive at an amicable settlement. After seeking advice from its lawyers with regard to its rights under the JVAs, APSB had subsequently on 22 May 2021 entered into a binding term sheet with CCPSB (through the Judicial Manager) whereby the Parties had agreed for, among others, CCPSB to settle and pay RM40.00 million (“Final Settlement Sum”) to APSB as the full and final settlement of APSB’s entitlement from the Project (“APSB Entitlement Sum”) and all other rights, interests and/or benefits that APSB may have under the Project, the Development Land and the JVAs and/or against CCPSB (“Settlement”). In this regard, APSB had also agreed that upon signing of a definitive settlement agreement with CCPSB (through the Judicial Manager) to give effect to the Settlement, it will withdraw the APSB’s Appeals at the Court of Appeal.

On behalf of the Board of Directors of Gadang, RHB Investment Bank Berhad wishes to announce that APSB has on 28 July 2021 entered into a conditional settlement agreement with CCPSB (through the Judicial Manager) which sets out the terms and conditions governing the payment of the Final Settlement Sum and other matters relating to the Settlement (“FSA”). Pursuant to the terms of the FSA, the APSB Entitlement Sum is now revised from a total value equivalent to 16.7% of the final gross development value of the Project and up to a maximum sum of RM323,999,999 only, to RM190.00 million only of which a total of RM150.00 million has been paid by CCPSB to APSB to-date. All the Parties’ rights, obligations and liabilities arising out of the JVAs shall then be extinguished and superseded by the terms set out in the FSA upon fulfilment of all the conditions precedent of the FSA (“Unconditional Date”) and the Development Land shall then be transferred to CCPSB upon its full settlement of the Final Settlement Sum to APSB.

Paragraph 8.22(1)(b) of the Main Market Listing Requirements of Bursa Malaysia Securities Berhad (“Listing Requirements”) stipulates that “a listed issuer must issue a circular to its shareholders and seek its shareholder approval if it proposes to make a material amendment, modification or variation to a proposal which has been approved by shareholders in general meeting”. Paragraph 8.22(2)(b) of the Listing Requirements further stipulates that “an amendment, modification or variation is considered material if it can be reasonably expected to have a material effect on the decision of a holder of securities of the listed issuer in relation to such proposal”.

In view of the material change in the APSB Entitlement Sum pursuant to the terms of the FSA and since the JVAs will be terminated on the Unconditional Date and the Development Land will be transferred to CCPSB upon its full settlement of the Final Settlement Sum to APSB, the Proposed Variation is considered a material variation under Paragraph 8.22(2)(b) of the Listing Requirements. As such, the Company is required to seek its shareholders’ approval for the Proposed Variation at an extraordinary general meeting to be convened.

The background information on the Joint Venture, the First Settlement Agreement as well as further details on the Proposed Variation (including the FSA) are set out in the attachment.

This Announcement is dated 28 July 2021.