Sunningdale Precision Industries Ltd Proposes To Acquire Certain Assets From German Plastic Technology Pte Ltd (including All The Shares In Pt Gp Technology Bintan)

Introduction

The Board of Directors of Sunningdale Precision Industries Ltd (the "Company") is pleased to announce that the Company has on 16 March 2004 entered into a sale and purchase agreement ("S&P Agreement") with (1) German Plastic Technology Pte Ltd ("GPT Singapore"), (2) certain existing shareholders of GPT Singapore (the "GP Shareholders") and (3) Mr Chan Mun Cheong ("CMC"), pursuant to which the Company proposes to acquire:

(a) the entire issued and fully paid up shares ("Sale Shares") in the capital of PT GP Technology Bintan ("GPT Bintan"), a company established in Indonesia; and

(b) certain assets (the "Assets") of GPT Singapore, used in the plastic injection moulding business, in the form of equipment, tools, machinery and vehicles.

Brief description of GPT Singapore and GPT Bintan

GPT Singapore is a Singapore company engaged in plastic injection moulding and product assemblies. It has business operations in Singapore and, through its subsidiary (GPT Bintan), in Bintan Island, Indonesia. GPT Singapore holds 90% of the issued capital of GPT Bintan and CMC (who is also the President Director of GPT Bintan) holds 10% of the issued capital of GPT Bintan.

Rationale for the proposed acquisition

The proposed acquisition of the Sale Shares and the Assets will allow the Company to expand its manufacturing operations by taking advantage of an existing operational site and business in Bintan Island, the competitive manufacturing costs in Bintan Island and the expertise of the current management team.

Consideration

The amount payable by the Company for the Sale Shares and the Assets is S$900,000 (the "Consideration"), comprising:

(a) the sum of S$180,000, which shall be payable in cash in two instalments, the first instalment being payable to GPT Singapore (in the sum of S$45,000) immediately upon the execution of this S&P Agreement and the second instalment being payable to the GPT Singapore (in the sum of S$117,000) and CMC (in the sum of S$18,000) on the date of completion; and

(b) the sum of S$720,000, which shall be satisfied by the allotment and issue of 1,440,000 new ordinary shares of S$0.15 each (the "New Sunningdale Shares") in the capital of the Company at the issue price of S$0.50 per New Sunningdale Share, being the average of the closing prices of the ordinary shares of the Company for trades done on the SGX-ST for the period 12 February 2004 to 16 March 2004.

The cash portion of the Consideration will be funded through the internal resources of the Company. The number of New Sunningdale Shares to be issued comprises approximately 0.45 per cent of the issued share capital of the Company as at the date of this announcement. The New Sunningdale Shares, when allotted and issued, shall rank pari passu in all respects with the existing ordinary shares of S$0.15 each in the capital of the Company except that they will not rank for any dividend declared or to be declared by the Company for the financial year ended 31 December 2003.

The Consideration was negotiated a "willing buyer and willing seller on an arm's length transaction" and was based mainly on the open market value of the plastic injection moulding machines to be acquired, as determined by an independent valuation by Dovebid (S) Pte Ltd.

Conditions Precedent and other salient terms

Completion of the proposed acquisition is subject to, among other things:

(a) all consents and approvals required under any and all applicable laws for the sale and purchase of the Sale Shares and the Assets and to give effect to the transactions contemplated hereunder including, without limitation:

(i) the approval of the SGX-ST for the listing and quotation of the New Sunningdale Shares on the Main Board of the SGX-ST;

(ii) any approvals required from any Indonesian governmental, provincial, municipal or other regulatory authority, including without limitation, the Investment Coordinating Board (BKPM); and

(b) the representation and warranties contained in the S&P Agreement remaining true and not misleading in any respect at completion, as if repeated at completion and at all times between the date of the S&P Agreement and completion.

GPT Singapore, the GP Shareholders and CMC have also undertaken in favour of the Company to comply with certain non-competition and non-solicitation obligations for a period of one year from the date of completion.

Financial Effect of the Proposed Acquisition

The proposed acquisition is not expected to have any significant impact on the net tangible assets per share or earnings per share of the Company for the current financial year ended 31 December 2004.

Directors' and controlling shareholders' interests

None of the controlling shareholders, directors or substantial shareholders of the Company has any interest, direct or indirect, in the proposed acquisition.

Inspection

A copy of the sale and purchase agreement is available for inspection during normal business hours at the Company's registered office at 5 Bukit Batok Street 22, Singapore 659583 for three months from the date hereof.


BY ORDER OF THE BOARD