General Announcement   Reference No TC-061011-63419

Company Name	:	TALAM CORPORATION BERHAD
Stock Name	:	TALAM
Date Announced	:	11/10/2006

Type	:	Announcement
Subject	:	TALAM CORPORATION BERHAD ("TCB" or "the Company") TRUSTEE AND NOTEHOLDERS' APPROVAL FOR FULL SETTLEMENT OF THE TOTAL OUTSTANDING AMOUNT OF EUROPLUS CORPORATION SDN BHD'S MURABAHAH NOTES ISSUANCE FACILITY OF RM196.0 MILLION ("MuNIF")

Contents :

1. INTRODUCTION

The Company wishes to inform that on 11 October 2006, Europlus Corporation Sdn Bhd (ECSB), a subsidiary of TCB received from ABB Trustee Berhad (the Trustee) the written notice informing that the Noteholders of the ECSB's MuNIF have approved and passed the resolution in writing on 25 September 2006 on TCB's restructuring proposal on the MuNIF (Restructuring Proposal).

2. BACKGROUND

2.1 ECSB has undertaken an issuance of the above MuNIF of RM350.0 Million constituted by a Trust Deed dated 19 September 2000 and supplemented and amended by a Supplemental Trust Deed dated 3 July 2003. As at to date, the amount of RM196.0 Million under the MuNIF remains outstanding.

2.2 ECSB and TCB have requested the Trustee and Abrar Discounts Berhad (the facility agent) to agree to the settlement of ECSB's obligations to the Trustee in respect of item 2.1 above in the manner as set out in TCB's Restructuring Proposal.

3. TCB'S RESTRUCTURING PROPOSAL

3.1 Proposed full settlement of the total outstanding amount of RM196.0 Million under the MuNIF in the following manner:-

i. the settlement of RM6.0 Million in cash by applying the monies available in the Sinking Fund Account.
ii. the settlement of the balance of RM190.0 Million by the issuance of Redeemable Convertible Secured Loan Stocks (RCSLS) by TCB. The RCSLS will be secured against properties with a total forced sale value of not less than RM190.0 Million.
3.2 Appointment of a turnkey/principal contractor approved by the Noteholders to complete the sales receivables of RM406.0 Million which were assigned to the Noteholders.

3.3 Immediate assignment of all the relevant accounts to the turnkey/principal contractor in relation to para 3.2 above.

3.4 Establishment of a Sales Action Committee for the disposal and/or joint venture of the properties charged for redemption of the outstanding MuNIF/RCSLS.

4. EFFECTS OF THE RESTRUCTURING PROPOSAL

TCB will derive goodwill from assisting ECSB to settle its indebtedness by performing their obligations under the Restructuring Proposal.

5. RATIONALE

TCB has a social obligation to ensure that TCB and its subsidiaries will make good their promise to complete and deliver homes to its purchasers. Upon completion, TCB hopes to regain the public confidence.

6. APPROVALS REQUIRED

The Restructuring Proposal is subject to inter-alia the relevant approvals from the Securities Commission, the shareholders of TCB and any other regulatory bodies being obtained.

7. FINANCIAL IMPACT

7.1 Share Capital

Upon completion of the Restructuring Proposal and assuming the full conversion of the RCSLS, TCB issued and paid up share capital will increase by RM190.0 Million.

7.2 Net Assets

Upon completion of the Restructuring Proposal and assuming the full conversion of the RCSLS, TCB Group Net Assets will increase by RM190.0 Million.

7.3 Earnings

The Restructuring Proposal will not have any material effect on the earnings per share of the TCB Group for the financial year ending 31 January 2007. However, upon completion of the Restructuring Proposal, there will be positive impact on the future earnings of the Group.

8. DIRECTORS' AND MAJOR SHAREHOLDERS' INTEREST

None of the Directors, major shareholders and/or persons connected with them has any interest, direct or indirect, in the Restructuring Proposal.

9. DIRECTORS' STATEMENT

After considering all aspects of the Restructuring Proposal, the Board is of the opinion that the Restructuring Proposal is in the best interest of the Company.

 

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