PJ DEVELOPMENT HOLDINGS BERHAD (“PJD or “Company”)

PROPOSED ACQUISITION OF 100% EQUITY SHARES IN PRAVEST SDN BHD FOR A TOTAL CONSIDERATION OF RM 17,400,000.00 BY PJD REALTY SDN BHD, A WHOLLY- OWNED SUBSIDIARY OF THE COMPANY (“PROPOSED ACQUISITION”)

1.  Introduction

The Board of Directors of PJD wish to announce that PJD Realty Sdn Bhd , a wholly-owned subsidiary of the Company had on 1 November 2006 entered into a conditional Sale of Shares Agreement with the shareholders of Pravest Sdn Bhd (“Sale of Shares Agreement”) for the acquisition of 100% equity shares at a consideration of RM17,400,000.00 (“Consideration Sum”)

2.  Information on PJD Realty Sdn Bhd (“PJD Realty”)

PJD Realty was incorporated in Malaysia under the Companies Act, 1965 on 29 March 1991. PJD Realty is a wholly-owned subsidiary of PJD. The principal activity of PJD Realty is investment holding.

The authorised share capital of PJD Realty is RM1,000,000.00 comprising 1,000,000 ordinary shares of RM1.00 each, of which 1,000,000 ordinary shares of RM1.00 each have been issued and fully paid-up.

3.  Information on Pravest Sdn Bhd (“Pravest”)

3.1  Incorporation –

Pravest was incorporated in Malaysia under the Companies Act, 1965 on 5 August 1997. The principal activity of Pravest is property development.

The authorised share capital of Pravest is RM100,000.00 comprising 100,000 ordinary shares of RM1.00 each, of which 100,000 ordinary shares of RM1.00 each have been issued and fully paid-up (“Sale Shares”).

3.2 Shareholders of Pravest ( “Vendors”) and their shareholdings –

Ab Rahman Bin Mohamed Nor / 2,000 shares
Aminudin Bin Abdul Karim / 4,000 shares
Amiruddin Bin Ahmad / 20,000 shares
Razali Bin Mohd / 4,000 shares
Innotis Construction Sdn Bhd (Co. No. 583580-W) / 70,000 shares

3.3 Particulars of Joint Venture -

Pravest has entered into a Joint Venture Agreement (“JVA”) with Perbadanan Setiausaha Kerajaan Pahang (“PSKP”) on 2nd April 1999 for the purchase and development of a 1,000 acres, 99 years lease of land in the Mukim of Penor, Kuantan (“Property”) for RM 10 million, of which RM2.4 million has been settled.

4.  Salient Terms of the Proposed Acquisition

4.1  Consideration Sum –

The Consideration Sum of RM 17,400,000.00 will be settled in the following mode of payments -

i) Deposit of RM 800,000 on signing of Sale of Shares Agreement will be held by lawyers as stakeholders and used to settle outstanding quit rent and transfer fees.

ii)  Balance of the Consideration Sum of RM16,600,000 by way of 55% in cash and 45% by contra of properties, subject to the retention of the balance Consideration Sum to settle any outstanding overdue interest under the JVA that may be imposed by PSKP and the reduction of value of land proportionately of any Malay Reserve land .

4.2  Conditions Precedent –

The Proposed Acquisition is conditional upon the effective fulfilment of the Conditions Precedent set out below –

i) The Vendors obtaining the approval from PSKP for the issuance of the issue documents of title to the Property in favour of Pravest and the approvals from the relevant authorities upon terms acceptable to PJD Realty.

ii) The completion of the legal and financial Due Diligence to the absolute satisfaction of PJD Realty.

iii) PJD Realty obtaining all necessary approval, including but not limited to, the prior approval of PJD Realty’s Board of Directors for the purchase of the Sale Shares on the terms and subject to the conditions of this Agreement.

5. Basis of arriving at the purchase consideration

The purchase consideration was arrived at on a willing-buyer willing-seller basis.

6. Estimated time frame for the completion of the Proposed Acquisition

The estimated time for completion is 3 months from date of the Sale of Shares Agreement becomes unconditional.

7. Liabilities to be assumed by the Company

There is no liability assumed by the Company pursuant to the Proposed Acquisition but PJD Realty will pay the outstanding sum of RM7.6 million to PSKP under the JVA.

8. Rationale of the Proposed Acquisition

The development of the Property in Pahang would form part of PJD Group’s land bank and future development for its property development division. The development would be synergistic to the on going property development in Bukit Istana, Kuantan, Pahang undertaken by PJD Group.

9. Financing of the Proposed Acquisition

The Proposed Acquisition would be financed from internally generated funds and bank loan.

10. Prospects and risk factors of the Proposed Acquisition

Barring any unforeseen circumstances, the Board of Directors is of the opinion that the Proposed Acquisition is in line with the PJD Group’s business strategy and is expected to enhance its business operations in future.

The Board is not aware of any risk factors arising from the Proposed Acquisition other than the general risks such as the normal market and global economic risks, financing risks, the level of interest rates and inflation in Malaysia which may affect the financial and operating conditions of the PJD Group.

11. Financial effects of the Proposed Acquisition

(a)  Share Capital

The Proposed Acquisition will not have any effect on the issued and paid-up share capital of the Company.

(b)  Net Assets

The Proposed Acquisition is not expected to have material effect on the net assets per share of the Company.

(c)  Earnings

The Proposed Acquisition is not expected to have any material impact on the earnings of PJD Group for the financial year ending 30 June 2007 but will enhance the future earnings of PJD Group.

(d)  Substantial shareholders

The Proposed Acquisition will not have any effect on the substantial shareholding structure of the Company.

12. Interest of the Directors, substantial shareholders and/or persons connected with them

None of the directors and/or substantial shareholders of the Company and /or persons connected with them have any interest, direct and/or indirect, in the Proposed Acquisition.

13. Directors’ Statement

The Board of Directors, having taken into consideration all aspects of the Proposed Acquisition is of the opinion that the Proposed Acquisition is in the best interest of the Group and its shareholders.

14. Approval Required

The Proposed Acquisition is not subject to approval by shareholder of PJD Realty in general meeting but subject to approval by Foreign Investment Committee.

15. Departure from Securities Commission (“SC”) Guidelines

To the best knowledge of the directors of the Company, the Proposed Acquisition do not depart from the SC’s Policies and Guidelines on Issue/Offer of Securities.

16. Documents Available for Inspection

The following documents are available for inspection at the Registered Office of the Company at 18th Floor Plaza OSK, Jalan Ampang, 50450 Kuala Lumpur, from Monday to Friday (except public holidays) during normal business hours for a period of three (3) months from the date of this announcement :-

(i) Sale of Shares Agreement;

(ii) Audited accounts of PJD Realty and Pravest for the past two (2) financial years ended 30 June 2004 and 2005; and

(iii) Memorandum and Articles of Association of PJD Realty and Pravest.

This announcement is dated 1 November 2006.