10 April 2008
General Announcement
Reference No MM-080410-54265

	Item		Details
	Submitting Merchant Bank	:	CIMB INVESTMENT BANK BERHAD
	Company Name	:	MTD INFRAPERDANA BERHAD
	Stock Name	:	MTDINFR
	Date Announced	:	10/04/2008
	Type	:	Announcement
	Subject	:	MTD INFRAPERDANA BHD ("MTDINFRA") OR ("COMPANY") PROPOSED SELECTIVE CAPITAL REPAYMENT EXERCISE PURSUANT TO SECTION 64 OF THE COMPANIES ACT, 1965 ("ACT") ("PROPOSED SCR")

1. INTRODUCTION

We refer to the earlier announcement made on 26 February 2008 (“First Announcement”).

On behalf of the Board of Directors of MTDInfra (“Board”), we wish to announce that the independent Directors of MTDInfra have deliberated on the letter dated 26 February 2008 from MTD Capital Bhd (“MTD”), the major shareholder of MTDInfra, and have decided to accept MTD’s request for MTDInfra to undertake the Proposed SCR which will result in the Company being taken private. Concurrently, the Company and MTD have entered into a selective capital repayment agreement in respect of the Proposed SCR (“SCR Agreement”) whereby MTD will grant an interest-free loan to MTDInfra amounting to RM188.0 million for the purpose of funding in full, the repayment of the cash amount under the Proposed SCR. Upon completion of the Proposed SCR, MTDInfra will be a wholly-owned subsidiary of MTD.

2. DETAILS OF THE PROPOSED SCR

2.1 The Proposed SCR entails a selective capital repayment under Section 64 of the Act, which will result in the reduction of the existing issued and paid-up share capital of MTDInfra as at 31 March 2008 of RM278.90 million comprising 1,115.59 million ordinary shares of RM0.25 each in MTDInfra (“MTDInfra Shares”) to RM90.90 million comprising 363.61 million MTDInfra Shares by way of cancellation of 751.98 million MTDInfra Shares held by the shareholders of MTDInfra and partially held by MTD. The existing 16.13 million treasury shares shall be retained in the Company. The remaining 347.48 million MTDInfra Shares will be held by MTD. The shareholders of MTDInfra other than MTD (“Other Shareholders”), whose names appear in the Record of Depositors of MTDInfra at the close of business on a date to be determined and announced later, shall receive a proposed cash amount of RM0.80 for each existing MTDInfra Share held on an entitlement date to be determined and announced later.

2.2 The total proposed consideration of RM188.0 million or RM0.80 per MTDInfra Share represents the following:

(i) a premium of approximately 12.68% to the closing price of MTDInfra Shares on 22 February 2008 (being the last trading day prior to the First Announcement”) and the 5-day weighted average market price of MTDInfra Shares up to 22 February 2008 of RM0.71, and approximately 11.11% to the 3-month weighted average market price of MTDInfra Shares up to 22 February 2008 of RM0.72; and

(ii) a premium of RM0.43 or approximately 116% over the Company’s consolidated net assets of RM0.37 per share for the financial year ended 31 March 2007 and after adjustment due to the capital repayment of RM0.35 per MTDInfra Share, which was completed on 1 August 2007.

2.3 Under the SCR Agreement, MTD will waive its entitlement to the repayment of capital pursuant to the Proposed SCR. Upon completion of the Proposed SCR, MTDInfra will be a wholly-owned subsidiary of MTD. MTD does not intend to maintain the listing status of MTDInfra on the Main Board of Bursa Malaysia Securities Berhad (“Bursa Securities”). Pursuant to Paragraph 8.15 of the Listing Requirements of Bursa Securities, MTDInfra will be delisted and removed from the Official List of Bursa Securities as it would not meet the required public shareholding spread requirement for listing.

2.4 Pursuant to the SCR Agreement, MTD will grant an interest-free loan to MTDInfra amounting to RM188.0 million for the purpose of funding in full, the repayment of the cash amount under the Proposed SCR (“Advance”). The Advance is subject to, among others, the following terms and conditions:

Tenure	:	The Advance shall have no fixed tenure.
Interest	:	The Advance shall be granted free of interest.
Repayment	:	The Advance shall be repayable on demand in such manner as MTD may, instruct MTDInfra in writing, provided that any demand may only be made after the expiry of twelve (12) months from the date of drawdown of the Advance.
Security	:	The Advance shall be unsecured and without any covenant to provide any security in the future.
Subordination	:	The Advance shall be subordinated to all existing credit facilities extended to MTDInfra by any financial institution, bondholder, lender or creditor.

2.5 The performance of the SCR Agreement is conditional upon the fulfillment of the conditions in Section 5 herein and may be terminated by a mutual agreement of both parties without any party being liable for any loss, damage or indemnity whether direct or indirect, or consequential (including, without limitation, loss of profits) arising out of or in connection with such termination.

2.6 Other salient terms of the Proposed SCR are as follows:

2.6.1 The parties shall in good faith cooperate to implement the Proposed SCR, in particular:

(a) MTD shall, if required, assist MTDInfra in making the necessary application to the High Court of Malaya for the purposes of the Proposed SCR to obtain the Order of the High Court of Malaya (“Order”) under Section 64 of the Act;

(b) MTD and MTDInfra shall make the necessary applications for the requisite approvals of the relevant party or body whose consent or approval is required in connection with any of the conditions precedent, as described in Clause 3 of the SCR Agreement;

(c) MTD and MTDInfra shall respectively seek the necessary approvals from such other third parties as may be required for the purposes of the Proposed SCR as described in Clause 3 of the SCR Agreement.
2.6.2 Each party shall, from time to time upon the request of the other party, executes any additional document(s) or do any other act(s) or thing(s) which may reasonably be required to effectuate the purposes of the SCR Agreement.

2.6.3 Save as otherwise approved by MTD in writing or save as may be necessary to give effect to the Proposed SCR and the SCR Agreement, MTDInfra agrees and undertakes that MTDInfra and its subsidiaries (“MTDInfra Group”) shall on and from the date of the SCR Agreement until the completion of the Proposed SCR:

(a) continue to carry on business substantially in the same manner as the business has been carried on prior to the date of the SCR Agreement and in the ordinary course of business in compliance with all laws and regulations and requirements applicable to MTDInfra Group in all material respects (i.e. where non compliance would have a material adverse effect on the business of MTDInfra Group);
(b) not in any way vary its share capital or alter or modify the rights attaching to any of the same;
(c) not in any way alter its Memorandum and Articles of Association; save to comply with all laws and regulations;
(d) not create, issue or grant any option in respect of its share capital;
(e) not dispose or transfer any of the business(es) or asset(s) of MTDInfra Group where such disposal or transfer would have a material impact on the net asset value of MTDInfra other than in the ordinary course of business. For the purposes of Clause 8.3(e) of the SCR Agreement, any disposal or transfer where the consideration either singly or in the aggregate exceeds 10% of the shareholders' funds of MTDInfra based on the latest audited financial statements of MTDInfra shall be deemed to be material;
(f) not acquire any business(es) or asset(s) where such acquisition would have a material impact on the net asset value of MTDInfra other than in the ordinary course of business. For the purposes of Clause 8.3(f) of the SCR Agreement, any acquisition where the consideration either singly or in the aggregate exceeds 10% of the shareholders' funds of MTDInfra based on the latest audited financial statements of MTDInfra shall be deemed to be material;
(g) not amend the terms and conditions of the existing employment or service contracts of the employees nor terminate the employment of any of the employees, and senior management staff unless in accordance with the normal terms of employment consistent with the prevailing industry standards;
(h) not declare or pay any bonus or ex-gratia payments unless it is under an express obligation to do so under the existing employment or service contracts of the employees and senior management staff or unless otherwise compelled under prevailing laws to do so and supported by a written legal opinion to that effect;
(i) not declare or pay any dividends or distributions, nor support the declaration or payment, of any dividends or distributions by MTDInfra or any of its subsidiary companies (other than the permitted dividends as defined in the SCR Agreement);
(j) not incur any new borrowing or indebtedness or extend any guarantee or indemnity other than in the ordinary course of business;
(k) not enter into any contract or capital commitment which would have a material impact on the net asset value of MTDInfra other than in the ordinary course of business. For the purposes of Clause 8.3(k) of the SCR Agreement, any contract or capital commitment where the consideration either singly or in the aggregate exceeds 10% of the shareholders' funds of MTDInfra based on the latest audited financial statements of MTDInfra shall be deemed to be material;
(l) not to enter into any related party transactions other than recurrent related party transactions, if any, that exist as at the date of the SCR Agreement; and
(m) not utilise the existing cash reserves in the MTDInfra Group other than in the ordinary course of business.

3. RATIONALE FOR THE PROPOSED SCR

The Proposed SCR gives an opportunity to the shareholders to realise their investments in MTDInfra Shares at an attractive price. The cash consideration of RM0.80 per MTDInfra Share represents a premium above the current market price of approximately 12.68% to the closing price of MTDInfra Shares on 22 February 2008 (being the last trading day prior to the First Announcement) and the 5-day weighted average market price up to 22 February 2008 of RM0.71, and approximately 11.11% to the 3-month weighted average market price up to 22 February 2008 of RM0.72.

The cash consideration of RM0.80 also represents a premium of RM0.43 or approximately 116% over the Company’s consolidated net assets of RM0.37 per share for the financial year ended 31 March 2007 and after adjustment due to the capital repayment of RM0.35 per MTDInfra Share, which was completed on 1 August 2007.

In addition, the average daily trading volume of MTDInfra Shares for the past 1 year up to 22 February 2008 was about 0.63 million MTDInfra Shares, representing only 0.27% of MTDInfra’s current public shareholding spread of approximately 234.99 million MTDInfra Shares, indicating a very thin trading volume of MTDInfra Shares. Given such low trading volumes, the Proposed SCR represents a better alternative to the Other Shareholders by allowing them to realise their investments in MTDInfra Shares at an attractive price as opposed to maintaining the listing of the MTDInfra Shares.

4. EFFECTS OF THE PROPOSED SCR

4.1 Share capital and substantial shareholders’ shareholdings

The proforma effects of the Proposed SCR on the issued and paid-up ordinary share capital of MTDInfra and the respective shareholdings of the substantial shareholders of MTDInfra, based on the Register of Substantial Shareholders as at 31 March 2008, are set out in Tables 1 and 2 herein.

4.2 Net assets

The proforma effects of the Proposed SCR on the consolidated net assets of MTDInfra for the financial year ended 31 March 2007 are set out in Table 3 herein.

4.3 Earnings

The Proposed SCR is not expected to have any material effect on the earnings of MTDInfra for the financial year ending 31 March 2009 as the Proposed SCR is expected to be completed by the fourth quarter of 2008. However, the Proposed SCR is expected to enhance the future earnings per share of the Company as the number of MTDInfra Shares in issue will be reduced subsequent to the completion of the Proposed SCR.

4.4 Gearing

The proforma effects of the Proposed SCR on the gearing based on the audited consolidated financial statements of MTDInfra as at 31 March 2007 are set out in Table 3 herein.

5. APPROVALS REQUIRED

The Proposed SCR is conditional upon approvals being obtained from the following:

(i) the Securities Commission (“SC”) (on behalf of the Foreign Investment Committee);

(ii) the shareholders of MTD at an Extraordinary General Meeting (“EGM”) to be convened, if required;

(iii) the shareholders of MTDInfra at an EGM to be convened;

(iv) the Order sanctioning the Proposed SCR;

(v) the creditors and bondholders of MTDInfra, if required;

(vi) such other person as may be required pursuant to any obligation of MTDInfra under any instrument, agreement or contract by which MTDInfra is bound; and

(vii) the consent, permission or waiver of any other applicable regulatory authority, if required.

The Proposed SCR will become effective once an office copy of the Order is filed with the Companies Commission of Malaysia.

6. DIRECTORS’ AND MAJOR SHAREHOLDERS’ INTERESTS

MTD is a party to the SCR Agreement in respect of the Proposed SCR which, upon completion, will result in the Company becoming its wholly-owned subsidiary. MTD will also be funding in full the repayment of capital under the Proposed SCR. As at 31 March 2008, MTD is a major shareholder of MTDInfra holding a direct interest of 78.63% in MTDInfra (excluding treasury shares). Alloy Consolidated Sdn Bhd (“ACSB”), a major shareholder of MTD, also holds a direct interest of 1.04% in MTDInfra (excluding treasury shares). Accordingly, MTD and ACSB are deemed to be interested in the Proposed SCR (collectively the “Interested Shareholders”). The Interested Shareholders will abstain from voting in respect of their direct and/or indirect interests in MTDInfra, and have also undertaken necessary steps to ensure that persons connected to them, if any, will abstain from voting on the special resolution for the Proposed SCR to be tabled at an EGM to be convened.

Dato’ Dr. Nik Hussain bin Abdul Rahman, the major shareholder and Group Executive Chairman of MTD as well as the shareholder, Chairman and Non-Independent Non-Executive Director of MTDInfra, is deemed interested in the Proposed SCR. Md Rijaluddin bin Mohd Salleh, the shareholder and Non-Independent Executive Director of MTDInfra, is a nominated Director of MTD in MTDInfra. Dato’ Azmil Khalili bin Dato’ Khalid, the shareholder, Managing Director and Non-Independent Executive Director of MTD and MTDInfra, and Haji Nik Fauzi bin Dato’ Nik Hussein, the Executive Vice-Chairman and Non-Independent Executive Director of MTDInfra, are persons connected to Dato’ Dr. Nik Hussain bin Abdul Rahman (collectively, the “Interested Directors”). Accordingly, the Interested Directors have abstained and will continue to abstain from all deliberations and voting at meetings of the Board on the special resolution for the Proposed SCR. The Interested Directors will also abstain from voting in respect of their direct and/or indirect interests in MTDInfra, if any, and have also undertaken necessary steps to ensure that persons connected to them, if any, will abstain from voting on the special resolution for the Proposed SCR to be tabled at an EGM to be convened.

The shareholdings of the Interested Shareholders and Interested Directors in the Company, based on the Register of Substantial Shareholders as at 31 March 2008 are as follows:



Notes:

# Negligible.

(a) Net of 16,130,500 treasury shares held as at 31 March 2008.

(1) Deemed interested by virtue of their respective major shareholdings in MTD.

(2) Deemed interested by virtue of his spouse’s shareholdings in MTD, his and his children’s major shareholdings in Nikvest Sdn Bhd, a major shareholder of MTD and his daughter’s major shareholdings in ACSB, a major shareholder of MTD.

(3) Deemed interested by virtue of his major shareholdings in Nikvest Sdn Bhd, a major shareholder of MTD.

(4) Deemed interested by virtue of his major shareholdings in Nikvest Sdn Bhd, a major shareholder of MTD, and his spouse interest in MTDInfra.

(5) Deemed interested by virtue of her major shareholdings in ACSB and Alloy Concrete Engineering Sdn Bhd, a wholly-owned subsidiary of ACSB. ACSB is a major shareholder of MTD.

(6) Deemed interested by virtue of their major shareholdings in ACSB, Alloy Concrete Engineering Sdn Bhd and other private companies, namely Kembara Bakat Sdn Bhd and Perpetual Rich Sdn Bhd, which in turn are shareholders of MTD.

(7) Deemed interested by virtue of his spouse major shareholdings in ACSB.

(8) Deemed interested by virtue of his spouse interest in MTDInfra.

Save as disclosed above, to the best knowledge of the Company, none of the Directors and major shareholders of MTDInfra and/or persons connected to them have any interest, direct and/or indirect, in the Proposed SCR.

7. DIRECTORS’ RECOMMENDATION

The Board, save for the Interested Directors, having considered all aspects of the Proposed SCR and with the advice of the Independent Adviser, is of the opinion that the Proposed SCR is in the best interest of the Other Shareholders.

8. ADVISER AND INDEPENDENT ADVISER

The Board has appointed:

(i) us, CIMB Investment Bank Berhad, as the submitting agent for the Proposed SCR; and

(ii) OSK Investment Bank Berhad as the Independent Adviser to advise the Independent Directors and Other Shareholders on the merits of the Proposed SCR.

9. ESTIMATED TIME FRAME FOR COMPLETION

Barring unforeseen circumstances and subject to obtaining all the required approvals, the Proposed SCR is expected to be completed by the fourth quarter of 2008.

10. DEPARTURE FROM THE POLICIES AND GUIDELINES ON ISSUE/OFFER OF SECURITIES ISSUED BY THE SC (“SC GUIDELINES”)

The Proposed SCR does not require the SC’s approval and there is no departure from the SC Guidelines.

11. DOCUMENTS FOR INSPECTION

The SCR Agreement will be available for inspection by the shareholders of MTDInfra at its registered office at No. 26, Jalan 2/6, Dataran Templer, Bandar Baru Selayang, 68100 Batu Caves, Selangor Darul Ehsan during normal business hours from Mondays to Fridays (except public holidays) for a period of 3 months from the date of this announcement.

This announcement is dated 10 April 2008.