Investor Relations - News

Sale And Purchase Agreements - Additional Information

19 February 2002

Singapore Exchange Limited
2 Shenton Way #19-00 SGX Centre 1
Singapore 068804

Attn: Ms. June Sim
Vice President
Issuer Regulation

Dear Sirs

METALOCK (SINGAPORE) LIMITED (THE "COMPANY")
ANNOUNCEMENT IN RELATION TO THE SALE AND PURCHASE AGREEMENTS

We refer to your request dated 18 February 2002 for additional information with regard to the Company's previous announcement of 15 February 2002 concerning :-

1. the Sale and Purchase Agreement ("MTQ Agreement") which the Company's subsidiary, MTQ Engineering Pte Ltd ("MTQ"), entered into with Ciserv Singapore Pte Ltd ("Purchaser"), the Company and Wartsila Singapore Pte Ltd for the sale by MTQ to the Purchaser of its assets relating to its marine repair services and the trading and selling of related marine spare parts and components businesses ("Assets"); and

2. the Sale and Purchase Agreement ("Metalock Agreement") which the Company entered into with the Purchaser and Wartsila Singapore Pte Ltd for the sale by the Company to the Purchaser of the property at 27 Gul Drive, Singapore 629475 ("Property").

MTQ Agreement

(a) The net loss (before taxation and extraordinary items) attributable to the Assets for the 2 preceding financial years ended 31 March 2000 and 31 March 2001 was S$1,838,000 and S$1,219,000 respectively.

(b) On completion of the sale of the Assets, the Purchaser will pay S$5,320,000 being 95% of the purchase price of the Assets ("Asset Price") to MTQ in cash and the balance S$280,000, being 5% of the Asset Price, into an escrow account. The manner in which the sum in the escrow account will be applied will depend on whether there will be any adjustments to the Asset Price. If there is no adjustment, the full amount in the escrow account will be released to MTQ. If the adjustments should reduce the Asset Price by an amount equal or greater than the amount in the escrow account, the full amount will be released to the Purchaser. The sum in the escrow account will be released to MTQ and/or the Purchaser 5 business days after settlement of such adjustments to the Asset Price. Under the terms of the MTQ Agreement, the Asset Price may be adjusted as follows:

i. If there is any difference between the net asset value of the Assets as at the date of completion of the sale of the Assets and the net asset value of the Assets as specified in the Schedule to the MTQ Agreement; and

ii. If, at the date of completion of the sale of the Assets, there is any accrued holiday leave entitlement relating to employees to be transferred to the Purchaser, the Asset Price shall be reduced by the amount of such entitlement to be taken over by the Purchaser.

In the event the adjustments to the Asset Price should reduce or increase the Asset Price by an amount in excess of the amount in the escrow account, the Purchaser (in the case of an increase) or MTQ (in the case of a reduction) will bear such excess out of their own funds.

(c) The sale of the Assets will not affect MTQ's other principal activities of providing engineering repair services to the oilfield and other land-based related industries as well as supplying and trading in industrial products which it will continue to carry on after completion of the sale of the Assets.

Metalock Agreement

(d) The Company commissioned the desk top valuation of the Property.

(e) The value of the Property as at 19 September 2001, as advised by Colliers Jardine, was S$3,000,000.

(f) MTQ currently carries on its business of marine repair services and the trading and selling of related marine spare parts and components at the Property.

(g) The total consideration of S$3,000,000 for the Property will be paid by the Purchaser to the Company in cash on completion of the sale of the Property.

(h) Based on the consolidated net tangible assets of the Company of S$26,639,000 as at 30 September 2001, the price of S$8,600,000 represents 32.3% of such consolidated net tangible assets. As such, the sale of the Assets and the Property are together deemed to be a major transaction under Clause 1007 of the SGX Listing Manual and is accordingly subject to the Company's shareholders' approval.