We refer to our announcement dated 22 September 2008 in relation to the Proposal (“First Announcement”).

On behalf of the Board of Directors (“Board”) of TM, CIMB Investment Bank Berhad (“CIMB”) wishes to announce that on 24 October 2008, TM and VADS (collectively referred to as the “Parties”) have entered into a definitive agreement in relation to the Proposal (“SCR Agreement”). The SCR Agreement sets out the details of the Parties’ respective undertakings in relation to the Proposal, which includes the provision and subsequent waiver by TM through a wholly-owned subsidiary (“SPV”) of an interest-free advance to VADS to fully/partially fund the Proposal (“Advance”).

In addition to the terms and conditions of the Proposal as set out in the First Announcement, the other salient terms of the SCR Agreement are as follows:

(i) the Parties agree that the Advance shall not have a fixed tenure and shall be interest-free, unsecured, subordinated to all of VADS’ existing credit and credit facilities, and used solely for the capital repayment under the Proposal.

VADS shall, upon demand by the SPV (which may only be made 12 months after the date the Advance is released to VADS), repay to the SPV the Advance or such part of the Advance (as the case may be) that is owing and outstanding, unless the same has been waived by the SPV;

(ii) if the reduction in VADS’ share capital under the Proposal is not confirmed by the High Court of Malaya for any reason whatsoever, the Advance shall be returned to the SPV, unless the Parties shall decide to make an appeal to the Court of Appeal. For the avoidance of doubt, the Advance to be repaid by VADS to the SPV shall include any amount waived by the SPV;

(iii) if any of the conditions precedent (being approvals required for the Proposal as set out in the First Announcement) is not fulfilled on or before the date falling 1 year from the date of the SCR Agreement, then the SCR Agreement shall, unless extended by mutual agreement of the Parties, terminate whereby VADS shall refund the entire Advance to the SPV and the SCR Agreement shall cease to have any effect; and

(iv) upon receipt of shareholders’ approval for the Proposal, VADS will take all necessary steps to accelerate the vesting of non-vested options granted pursuant to the employees’ share option scheme for eligible employees of the VADS group of companies (“ESOS Options”) and to arrange for the early termination of all outstanding ESOS Options, no later than 1 month after VADS’ shareholders’ approval is obtained for the Proposal or a date to be mutually agreed by the Parties.

A copy of the SCR Agreement is available for inspection at TM’s registered office at Level 51, North Wing, Menara TM, Jalan Pantai Baharu, 50672 Kuala Lumpur, Malaysia, during normal business hours from Mondays to Fridays (except for public holidays) for a period of 3 months from the date of this announcement.

This announcement is dated 24 October 2008.

Announcement Info