General Announcement (Draft)

BOUSTEAD HOLDINGS BERHAD

1. introduction

MHS Aviation Berhad (“MHS”), a 51% subsidiary of Boustead Holdings Berhad (“BHB”), provides air transportation, flight support, flight training, engineering and technical services to oil and gas companies. In addition to owning its own aircraft, the MHS Group leases aircraft from inter-aliaDRIR Management Sdn Bhd (“DRIRM”) and DRIR Rotor Sdn Bhd (“DRIRR”) to fulfil its obligations under the service contracts with its customers.

MHS proposes to acquire sixteen (16) aircraft from DRIRM and DRIRR for a total purchase consideration of RM586.2million(“Proposed Acquisition”). Details of the total purchase consideration for the Proposed Acquisition is described in Section 2 of this announcement.

The Board of Directors of BHB (“Board”)wishes to announce that:

(i)MHS had on 30 December 2011 entered into sale and purchase agreementswith DRIRM and DRIRR for the Proposed Acquisition (“SPA”); and

(ii)BHB had on 30 December 2011 entered into a Memorandum of Agreement with MHS for a loan to MHS of up to RM460.0 million (“Intercompany Loan”).

Details of the Proposed Acquisition and Intercompany Loan are described in the ensuing sections.

1. DETAILS OF THE PROPOSED ACQUISITION

2.1Particulars of the Proposed Acquisition

The Proposed Acquisition entails the acquisition of sixteen (16) aircraft (“Aircraft”) from DRIRM and DRIRR for a total purchase consideration of RM586.2 million (“TotalPurchase Consideration”).

2.2Basis and justification for the TotalPurchase Consideration

The Total Purchase Consideration of RM586.2 million for the Aircraft was arrived at based on a willing buyer willing seller basis after taking into consideration the valuation report from Lloyd Helicopters Asia Pte Ltd dated26 April 2011 and the original purchase consideration by DRIRR.

2.3Original total cost of investment for the Aircraft by DRIRM and DRIRR and the dates of such investment

The original total cost of investment for the Aircraft by DRIRM and DRIRR was approximately RM767.3 million where the dates of acquisitions for the Aircraft ranged from 1 July 1991 to 14 December 2010.

2.4Salient terms of the SPA

The salient terms of the SPA are as follows:-

2.4.1SPA

(i)DRIRM’s and DRIRR’s Obligations

Simultaneously with the delivery of the Aircraft upon the discharge of the security interest or encumbrance over the Aircraft (“Delivery Date”), DRIRM and DRIRM hereby covenant to:-

(a)Issue an original bill(s) of sale signed for the Aircraft by the registered owner made out to MHS, or a party/ies to be nominated by MHS;

(b)Provide a full set of current and up to date aircraft maintenance manuals and up to date airframe and engine logbooks for the Aircraft;

(c)Provide the original certificate(s) of registration of the Aircraft or a certified true copy/(ies) of the registration of the Aircraft from the relevant authority; and

(d)For DRIRR only, procure Eurocopter Sdn Bhd to execute a novation agreement (in the form acceptable to MHS) together with MHS and DRIRR before the Delivery Date, whereupon Eurocopter Sdn Bhd shall consent to the novation of all rights, benefits and interest in and pursuant to the sales contract from DRIRR to MHS, by the Delivery Date.

(ii)Transfer of Risks

Risk of loss or damage to the Aircraft shall pass to MHS as at the Delivery Date. Upon delivery of the Aircraft, MHS shall assume all liabilities of any nature whatsoever arising out of the use or possession of the Aircraft and agrees to indemnify, protect, defend and save harmless DRIRM and DRIRR, their officers and employees with respect to any claim, suit, action or judgement of any kind arising out of the use or possession of the Aircraft following the Delivery Date.

DRIRM and DRIRR shall fully reimburse and indemnify MHS for all costs and expenses incurred due tointer-alia:

(a)DRIRM’s and DRIRR’s failure to perform or comply with any part of the SPA;

(b)Breach of any of DRIRM’s and DRIRR’s representations, warranties or covenants; and

(c)MHS’ inability to complete the registration of its title to the Aircraft or discharge the security interest.

2.4.2Payment of the Total Purchase Consideration

(a)The total sum of approximately RM490.9 million which shall be paid in cash on the Delivery Date as part settlement to discharge the existing encumbrance of the Aircraft;

(b)The total sum of approximately RM55.5 million which is deemed paid being the part settlement of the amount owing from DRIRM and DRIRR to MHS of this equivalent total amount; and

(c)The sum of approximately RM39.8 million which is payable upon the execution of the SPA.

2.5Liabilities to be assumed by BHB and MHS

Save as disclosed in Section 2.4.1 (ii) above, neither BHB nor MHS will assume any liabilities (including contingent liabilities and guarantees) arising from the Proposed Acquisition.

2.6Settlement

The Total Purchase Considerationwill be settled by way of:

(i)cash using internally generated funds,and/or borrowings from BHB and/or other sources; and

(ii)settlement of amounts owing from DRIRM and DRIRR to MHS as at 30 December 2011.

2.7Risk Factors

The Aircraft are subjected to risks associated with the ownership and operation of aircraft, particularly in respect of loss, damage, accidents and operational environment.

(i)Aircraft Conditions

The risk includes mechanical, electrical or hydraulic component failures. Such failures can lead to accidents with severe consequences and loss of life. They also include metal fatigue that result in cracks, or materials that become delaminated or corroded. These risks are minimised by the continuous inspections and maintenance performed on the aircraft, and their respective articles.

Safety standards are applied to key aspects such asaircraft design, engineering and maintenance, navigational aids and communication systems, and flight safety protocols and procedures.

(ii)Air Traffic

Given the growing volume of aircraft in the skies, on the taxiways and runways, keeping order and avoiding collisions is absolutely imperative.Pilots may rely on inter-aliaa combination of instruments, navigation systems, radar and global positioning systemsto pinpoint their location and the location of other aircraft. Airports typically maintain airfield lights and a line of open communication with pilots.These factors help reduce the possibility of errors.

(iii)Severe weather and other conditions

The risk includes volcanic ash, birds, lightning, ice and snow. These factors can adversely affect the operations of the aircraft by contributing towards delays or flight cancellations. Severe damage and accidents can also occur as a result of severe weather conditions.To mitigate such risks, weather conditions are constantly monitored by inter-alia the air traffic controller and pilots take into consideration the weather conditions in making decisions pertaining to their flights.

2.8Particulars of the Intercompany Loan from BHB to MHS of up to RM460.0 million

BHB proposes to provide a loan of up to RM460.0 million to MHSand the intended utilisation is as follows:

The Intercompany Loan shall incur an interest rate of 6.75% per annum and shall mature on 31 December 2013. MHS is expected to fully redeem the Intercompany Loan via a refinancing exercise and MHS’ internally generated funds.

1. PROSPECTS OF THE AIRCRAFT to be acquired

Other than banking on the history and track record of MHS, ownership of the Aircraft would provide further credibility to MHS when proposing its services to major oil and gas companies at the international stage. In fact, the Aircraft are highly used and sought after within the oil and gas sector and could attain reasonable levels of utilisation. This would put MHS in good stead from the regular income streams which the Aircraft could potentially generate.

1. DETAILS OF THE VENDORS

DRIRMand DRIRR are wholly-owned subsidiaries of DRIR Equities Sdn Bhd (“DRIRE”). DRIRE has a 49% equity stake in MHS.DRIRM and DRIRR were incorporated as special purpose vehicles (“SPVs”)to acquire aircraft, which are in turn leased to MHS.

1. RATIONALE FOR THE proposed ACQUISITION

The Proposed Acquisition ispart of BHB’s strategy to make MHS an aviation service provider which has a wide range of aircraft. The Proposed Acquisition shall support MHS’ endeavour in actively sourcing for other new contracts to grow its business.

1. EFFECTS OF THE PROPOSED ACQUISITION

6.1Share capital and substantial shareholders’ shareholdings

The Proposed Acquisition would not have any effect on the share capital and substantial shareholders’ shareholdings in BHB as it does not involve any new issuance of shares in BHB.

6.2Net assets (“NA”)

The Proposed Acquisition is not expected to have any material effect on the consolidated NA of BHB for the financial year ending 31 December 2011.

6.3Earnings

The Proposed Acquisition is not expected to have any material effect on the consolidated earnings of BHB for the financial year ending 31 December 2011.

6.4Gearing

The proforma effect of the Proposed Acquisition on the gearing of the BHB Group based on the consolidated audited accounts as at 31 December 2010 is set out as follows:

Note:

#The increase in borrowings arisesfrom the drawdown of unutilised banking facilities by the BHB Groupfor the amount of RM262.9 million and the issuance of RM78.0 million of bank guaranteed medium term notes by BHB under a RM1,000 million Bank Guaranteed Medium Term Note (“BG MTN”) Programme.

1. APPROVALS REQUIRED

The Proposed Acquisition isnot subject to the approvals of any relevant authorities and/or the shareholders of BHB.

1. INTEREST OF DIRECTORS OF BHB, SUBSTANTIAL SHAREHOLDERS OF BHB AND CONNECTED PERSONS

None of the Directors of BHB, substantial shareholders of BHB or any persons connected with them have any interest, direct and/or indirect, in the Proposed Acquisition. However, DRIRM and DRIRR are wholly-owned subsidiaries of DRIRE, which has a 49% equity stake in MHS.

1. transaction with related parties for the preceding 12 months

On 23 June 2011, BHB hadcompleted the acquisition of 2,000,000 and 8,200,000 shares of MHS from Tulus Sejagat Sdn Bhd and DRIRE respectively for a total cash consideration of RM100.0 million, which collectively represent a 51% equity interest in MHS.

BHB and MHS have not entered into any material transactions with DRIRE, DRIRM and DRIRR for the preceding 12 months save for the abovementioned transaction, the Proposed Acquisition and leasing of aircraft to MHS.

1. THE HIGHEST PERCENTAGE RATIO

The highest percentage ratio applicable to the Proposed Acquisition as determined under Paragraph 10.02(g) of the Main Market Listing Requirements of Bursa Malaysia Securities Berhad (“MMLR”) is approximately 7.1% based on the aggregate value of the assets over the net assets of the BHB Group and the aggregate value of the purchase consideration over the net assets of the BHB Group.

1. BOARD OF DIRECTORS’ STATEMENT

The Board, having considered all aspects including the terms, rationale and benefits of the Proposed Acquisition and after careful deliberation, is of the opinion that the Proposed Acquisition isin the best interest of BHB and MHS. In addition, the Board is of the view that the Proposed Acquisition is fair, reasonable and on normal commercial terms, and not detrimental to the interest of the minority shareholders.

1. estimated time frame for completion

Barring unforeseen circumstances, the Proposed Acquisition is expected to be completed on 30 December 2011.

This announcement is dated 30 December 2011.

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