Investor Relations - News

Acquisition Of Turbo Torque Pty Ltd

The Board of Directors of Metalock (Singapore) Limited ("Metalock") is pleased to announce that, MTQ Engine Systems (Aust) Pty Ltd ("MTQES"), a wholly-owned subsidiary of Metalock, has entered into a conditional agreement ("Agreement") with Turbo Torque Pty Ltd ("Turbo Torque") today for the acquisition of its business as an on-going concern together with its business assets (the "Assets").

Turbo Torque is engaged in the sales and servicing of turbochargers (the "Business") in Australia. Under the Agreement, MTQES will purchase the Assets of Turbo Torque for a cash consideration of A$525,000. MTQES will also offer employment to all employees of Turbo Torque upon completion.

The cash consideration was arrived at on a "willing buyer and willing seller" basis and is based on the net book value as at 30 June 2002 of the Assets of A$185,224, which comprises plant and equipment, stocks-in-trade, motor vehicles, rights and benefits under the business contracts but excluding cash in hand or in banks and debts accrued to Turbo Torque as at completion date; plus a premium of A$339,776 for goodwill, intellectual property, business names, brand names, business records, and the rights and benefits of Turbo Torque under the business contracts.

In the negotiations, the parties took into consideration that the Business is similar to MTQES' operations and the synergistic benefits of the combined operations.

The final consideration payable is subject to adjustments to take into account the results of a stocktake to be carried out upon the completion date as well as provisions for employee leave entitlements.

Completion of the purchase of the Assets is subject to the following conditions precedent being obtained or waived by the completion date:

1. the completion of due diligence investigations in respect of the Business to the satisfaction of MTQES;

2. entry into and execution of a lease in respect of the premises currently occupied by Turbo Torque (and used by it for carrying on the Business) on terms satisfactory to both the lessor and MTQES.

Completion will take place on 25 October 2002 or such other date as the parties may agree. Upon completion, MTQES will pay the cash consideration of A$525,000 ("Completion Payment") to Turbo Torque. The adjustments will be finalised on 28 October 2002. The amount, if any, by which the final purchase price exceeds the Completion Payment will be paid by MTQES to Turbo Torque and vice versa.
The acquisition will be funded through a combination of internal resources and external borrowings.

The Business generated a profit before tax of approximately A$119,000 for the financal year ended 30 June 2002.

Had the transaction taken place on 1 April 2001, the transaction would not be expected to have had any material impact on Metalock's consolidated earnings per share and net tangible assets per share.

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

A copy of the Agreement is available for inspection during normal business hours at Metalock's office at 182 Pandan Loop, Singapore 128373 for 3 months from 23 October 2002.


By Order of the Board
Metalock (Singapore) Limited