Investor Relations - News

Placement of Up To 15, 871, 000 New Ordinary Shares Of Par Value S$0.25 Each In The Capital Of MTQ Corporation Limited

The Directors of MTQ Corporation Limited (the "Company") wish to announce that the Company proposes to raise capital by way of placement, and in connection thereto, the Company had on 30 March 2004 entered into a placement agreement (the "Placement Agreement") with UOB Kay Hian Private Limited ("UOBKH" or "Placement Agent").

Pursuant to the Placement Agreement, the Company will issue and allot an aggregate of up to 15,871,000 new ordinary shares of S$0.25 each (the "Placement Shares") in the capital of the Company and UOBKH will use its best endeavours to procure subscribers for the Placement Shares, representing approximately 19.95% of the issued share capital of the Company as at the date of this announcement, at the price of S$0.40 for each Placement Share (the "Placement Price"), on the terms and subject to the conditions of the Placement Agreement (the "Placement").

The Placement Shares, when allotted and issued, will rank pari passu in all respects with the existing ordinary shares of the Company. The completion of the Placement is conditional, inter alia, upon (a) the approval in-principle from the Singapore Exchange Securities Trading Limited ("SGX-ST") for the listing and quotation of the Placement Shares on the Official List of the SGX-ST; and (b) the issue of the Placement Shares not being prohibited by any statute, order, rule, regulation, directive or request promulgated or issued after the date of the Placement Agreement by any legislative, executive or regulatory body or authority of Singapore which is applicable to the Company.

The shareholders of the Company had, at the Annual General Meeting of the Company held on 20 June 2003, approved an ordinary resolution (the "Resolution") pursuant to Section 161 of the Companies Act (Chapter 50) of Singapore and Rule 806 of the SGX-ST Listing Manual, empowering the directors of the Company (the "Directors") to allot and issue shares in the capital of the Company at any time and upon such terms and conditions and for such purposes as the Directors may, in their absolute discretion, deem fit provided that the aggregate number of shares to be allotted and issued pursuant to the Resolution shall not exceed 50 per cent. of the issued share capital of the Company at the time of the passing of the Resolution, of which the aggregate number of shares to be issued other than on a pro-rata basis to all shareholders of the Company shall not exceed 20 per cent. of the issued share capital of the Company, and that such authority shall, unless revoked or varied by the Company in general meeting, continue in force until the conclusion of the Company's next Annual General Meeting or the date by which the next Annual General Meeting of the Company is required by law to be held, whichever is earlier.

The Placement Price of S$0.40 for each Placement Share represents a discount of approximately 6.43% from the weighted average price of the ordinary shares of the Company of S$0.4275 as traded on the SGX-ST on the full market day of 29 March 2004 until the trading of the Company's shares on the SGX-ST was halted on 30 March 2004 at 12.30 p.m.

Assuming that all the Placement Shares are placed and issued, the net proceeds from the Placement, after deducting expenses pertaining to the Placement (including commissions payable to the Placement Agent), is estimated to be S$6.26 million. The net proceeds will be used, where opportunities arise, for business expansion and investments by the Group and to increase working capital. Pending the deployment of the net proceeds, such proceeds may be placed as deposits with financial institutions or invested in short term money markets or debt instruments or for any other purposes on a short term basis as the Directors may deem fit.

As at the date of this announcement, the issued and paid-up capital of the Company was S$19,887,250 divided into 79,549,000 ordinary shares of S$0.25 each in the capital of the Company. When completed, the Placement will increase the existing issued share capital of the Company by approximately 19.95% to 95,420,000 ordinary shares of S$0.25 each, assuming that all the Placement Shares are placed and issued.

Based on the audited consolidated financial statements of the Company and its subsidiaries (the "Group") as at 31 March 2003 (based on the Company's issued share capital of 79,200,000 ordinary shares of S$0.25 each as at 31 March 2003), the consolidated net tangible asset per ordinary share of the Group was 36.78 cents. Based on the audited consolidated financial statements of the Group as at 31 March 2003 and after adjusting for the Placement (assuming that all the Placement Shares are placed and issued) but excluding the 349,000 ordinary shares of S$0.25 each issued pursuant to the exercise of employee share options between 1 April 2003 to 30 March 2004, the consolidated net tangible asset per ordinary share of the Group based on the enlarged issued share capital of the Company immediately after the Placement would amount to 37.29 cents.

The Company will be making an application to the SGX-ST for the listing and quotation of the Placement Shares shortly. An Offer Information Statement which complies as to form and content with the Eleventh Schedule to the Securities and Futures (Offer of Investments) (Shares and Debentures) Regulations 2002, has on 30 March 2004 been lodged with and accepted by the Monetary Authority of Singapore.

None of the Placement Shares will be placed to any persons prohibited under Rule 812 of the SGX-ST Listing Manual.

BY ORDER OF THE BOARD
MTQ CORPORATION LIMITED


Fong Choon Seng
Company Secretary