SARAWAK CABLE BERHAD ("SCB" OR THE "COMPANY")

PROPOSED DISPOSAL OF EQUITY INTEREST HELD IN PT INPOLA MITRA ELEKTRINDO ("PT

IME") TO KAB ENERGY HOLDINGS SDN BHD (“KEH” OR THE “PURCHASER”), A WHOLLY
OWNED SUBSIDIARY OF KEJURUTERAAN ASASTERA BERHAD (“KAB”)

1. INTRODUCTION

On behalf of the Board of Directors of SCB ("Board"), Thinkat Advisory Sdn Bhd wishes to
announce that SCB and all other shareholders of PT IME had on 29 July 2022 entered into a
conditional share purchase agreement with KEH (“SPA”) for the proposed disposal of 300,000
ordinary shares in PT IME (“Sale Shares”), representing 100% equity interest, to KEH
(“Proposed Disposal”).

The Proposed Disposal will be satisfied via two components, the first being a cash consideration
of RM10,000 (“Cash Component”) and secondly, the settlement of debts, liabilities and
shareholders’ advances of PT IME capped at RM74.99 million (“Debt Component”) in the
manner as set out in Section 2 of this Announcement.

The Cash Component and Debt Component will collectively be referred to as the “Completion
Amount”.

PT IME is the owner and operator of a mini hydroelectric power plant known as PTLM Lae Kombih
3 located in North Sumatera, Indonesia (“Mini Hydro”). Further details on the Proposed Disposal
are set out in the ensuing sections. The salient terms of the SPA are detailed in Appendix I of
this Announcement.

2. DETAILS OF THE PROPOSED DISPOSAL

The Proposed Disposal entails the disposal of SCB’s entire equity interest in PT IME of 235,000
ordinary shares representing 78.3% equity interest in PT IME, together with 65,000 ordinary
shares representing 21.7% equity interest held by Tiopan Hasudungan Marpaung (“Tiopan”),
Parulian Marpaung and Subari Rudi (collectively, the “Minority Shareholders”) to KEH for an
aggregate cash consideration of RM10,000. Premised on this, the portion of the Cash
Component attributable to SCB is approximately RM7,833.

As part of the terms of the SPA, SCB and the Minority Shareholders (collectively the “Vendors”)
have agreed that SCB shall act as the authorized representative with authority to bind the Minority
Shareholders in relation to matters pertaining to the SPA.

KEH has also undertaken to cause the settlement of up to RM74,990,000 being the Debt
Component which comprises the following:

(i) the current outstanding loan facility from Bank of China Malaysia Berhad (“BOC”) obtained
by PT IME (“BOC Loan”) pursuant to a facilities agreement between BOC and PT IME
dated 19 January 2016 as amended by a restructuring agreement dated 30 November
2020, in accordance with the redemption statement to be issued by BOC;

(ii) the amount equal to the accounts payable and accrued expenses (including those due to
related parties and liabilities for taxes) and other liabilities of the Company that would be
reflected as liabilities on a balance sheet of the Company prepared in accordance with the
accounting policies (including consistent application of policies in respect of provisioning,
classification between short-term and long-term liabilities and management estimation),
and the financial statements of PT IME as at the unconditional date of the SPA
(“Completion Accounts”), save and except the BOC Loan and the Shareholders’
Advances (as defined below) (“Total Liabilities”); and

(iii) the amount of monies advanced and/or loaned by SCB to PT IME (“Shareholders’
Advances”).

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 In the event that the Mini Hydro is able to achieve a net export energy output of 61.13GWh within
one year of the date the SPA becomes unconditional (“Target Production”), a sum of
RM3,000,000 being the earned out profit sum (“Earned Out Profit”), shall be payable to SCB. In
the event the Mini Hydro is unable to achieve the Target Production, the Earned Out Profit shall
be deemed waived by SCB. The Earned Out Profit does not form part of the Completion Amount.

For illustration purpose, the breakdown of Completion Amount based on the outstanding amounts
as at 18 July 2022, being the latest practicable date of this announcement (“LPD”) is set out
below:

Subtotal Total (RM)

(RM)

Debt Component
BOC Loan, Total Liabilities and 74,990,000
Shareholders’ Advances

Cash Component
i) To SCB 7,833
ii) To Minority Shareholders 2,167
10,000
Total 75,000,000

2.1 Information on PT IME

PT IME was incorporated in Medan, Indonesia on 5 November 2008 approved by the Minister of
Law and Human Rights of the Republic of Indonesia. As at the LPD, PT IME has an issued share
capital of IDR30.0 billion comprising 300,000 ordinary shares in PT IME (“PT IME Shares”).

PT IME operates a Mini Hydro in District of Pakpak Bharat, North Sumatera, Indonesia with an
installed capacity of 11 megawatts. On 23 September 2010, PT IME signed a Power Purchase
Agreement (“PPA”) with PT Perusahaan Listrik Negara for the installation, operation and
maintenance of the Mini Hydro. Under the PPA, PT IME was required to design, finance, develop,
own and operate an 8-megawatt hydroelectric power plant for a period of 20 years from the
commercial operation date of the plant, which was achieved on 12 October 2021.

The commissioners, directors and major shareholders of PT IME together with their respective
direct and indirect shareholdings as at the LPD are as follows:

<--Direct--> <--Indirect-->
Commissioners / Nationality / No. of No. of
Directors / Major Country of PT IME PT IME
shareholders Designation incorporation Shares (1)% Shares (1)%

Dato’ Ahmad Redza President Malaysian - - - -

Bin Abdullah Director
Surya Sugandi Director Indonesian - - - -
Woon Wai En President Malaysian - - - -
Commissioner
Yek Siew Liong Commissioner Malaysian - - - -
SCB Major Malaysia 235,000 78.3 - -
shareholder
Tiopan Major Indonesian 62,000 20.7 - -
shareholder

Note:
(1) Based on 300,000 PT IME Shares.

PT IME does not have any subsidiary and/or associate companies.

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 A summary of the financial information of PT IME for the past 3 financial years based on its
audited financial statements for the financial year ended 31 December (“FYE”) 2019, FYE 2020
and FYE 2021 is set out below:

<------------------------------------Audited------------------------------------>
FYE 2019 FYE 2020 FYE 2021
IDR’000 (1)
RM’000 IDR’000 (1)
RM’000 IDR’000 (1)
RM’000

Revenue 15,743,962 4,597 8,680,032 2,535 10,951,816 3,253

(Loss) before tax (17,295,465) (5,050) (29,592,511) (8,641) (5,409,388) (1,607)
(Loss) after tax (17,505,145) (5,112) (27,173,226) (7,935) (4,578,657) (1,360)

Total equity (14,522,795) (4,241) (41,696,020) (12,175) (51,684,066) (15,350)

Total borrowings 78,109,349 22,808 79,255,619 23,143 80,177,130 23,813

Current ratio (times) 0.03 0.03 0.03 0.03 0.05 0.05

Gearing (times) n/a n/a n/a n/a n/a n/a

Notes:
n/a Not applicable
(1) Based on the exchange rate of IDR100:RM0.0297 as published by Bank Negara Malaysia
as at the LPD.

While the commercial operation date of the Mini Hydro was only achieved on 12 October 2021,
revenue was recorded by PT IME in FYE 2019 and FYE 2020 due to the accounting standards
which required PT IME to recognise revenue over time based on the cost incurred method.
Further, the loss after tax incurred during the financial years under review based on the above
were mainly arising from the set-up costs incurred and not capitalised for the Mini Hydro. This in
turn resulted in the decrease in PT IME’s total equity due to the increasing accumulated losses.
The borrowings of PT IME were mainly utilised to finance the construction of the Mini Hydro.

2.2 Information on the Purchaser

KEH was incorporated in Malaysia on 9 April 2021 as a private limited company under the
Companies Act 2016 with its principal activity being investment holding. As at the LPD, KEH has
an issued share capital of RM1.00 comprising one ordinary share.

KEH is a wholly-owned subsidiary of KAB. The directors of KEH and their respective
shareholdings in KEH are set out below:

< ------ Direct ---- > < --- Indirect ----- >
No. of No. of
Director Nationality shares % shares %

Dato’ Lai Keng Onn Malaysian - - *1 100

Johnathan Wu Jo-Han Malaysian - - - -

Note:
* Deemed interested by virtue of his shareholdings in KAB

2.3 Basis and justification of arriving at the Completion Amount

The Completion Amount, which consists of the Cash Component which will be fully satisfied in
cash as well as the Debt Component, was arrived at on a willing-buyer willing-seller basis after
taking into account the following:

(i) the Company’s original cost of investment as well as the carrying cost of its investment in
PT IME of RM7,241,000 as at 31 May 2022, being the date of the Company’s latest
unaudited financial results;

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 (ii) the total shareholders’ advances made by SCB to PT IME as at 31 May 2022, being the
date of the Company’s latest unaudited financial results, amounting to RM101,568,594;

(iii) the unaudited net liabilities of PT IME amounting to IDR48.4 billion (approximately RM14.7
million) as at 31 May 2022;

(iv) the expected future performance of PT IME for the PPA period; and

(v) the rationale for the Proposed Disposal as mentioned in Section 3 below.

2.4 Original cost and date of investment

The original cost and date of investment in PT IME by SCB are set out below:

Date of investment No. of PT IME Shares Investment amount (RM)

23 February 2012 195,000 5,805,000

8 November 2013 40,000 1,436,000
Total 235,000 7,241,000

In addition to the abovementioned investments made by SCB in PT IME, SCB has, as at the LPD,
also advanced a total of RM101,568,594 to PT IME which was utilised for the following:

RM
Construction cost and working capital for the Mini Hydro 74,379,347
Interest charged for shareholder advances 23,008,280
Management fees 4,180,967
Total 101,568,594

Apart from the abovementioned investment and advances, SCB provided a corporate guarantee
in relation to the BOC Loan which will be discharged upon settlement by the Purchaser pursuant
to the SPA.

2.5 Liabilities remaining with the Company

Following the Proposed Disposal, SCB will not retain any liabilities, including contingent liabilities
in relation to PT IME. However, after full settlement of the Debt Component, SCB shall capitalise
any additional advances or debts (if any) up to the Unconditional Date and the remaining
shareholder advances owed by PT IME of approximately RM59.5 million into ordinary shares of
PT IME and this shall form part of the Sale Shares to be acquired by the Purchaser.

3. RATIONALE FOR THE PROPOSED DISPOSAL

SCB and its subsidiaries (“Group”) have been facing continuous losses for the past four (4)
financial years. This strained the Group’s cashflows and its ability to repay its lenders. As part of
the current management’s efforts to restructure the Group’s banking facilities, the Company
applied for assistance from Bank Negara Malaysia’s Corporate Debt Restructuring Committee
and was admitted on 7 August 2019.

The operations of the Group were further affected by the COVID-19 pandemic. As its operations
were not considered essential activities, the Group was prohibited from operating during the
various Movement Control Orders implemented by the Malaysian Government. Even after
operations resumed, the Group was faced with disrupted operational efficiency under strict
standard operating procedures and sub-optimal utilisation of assets. As such, the Group was
unable to generate sufficient cashflow during this period to repay its lenders.

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 SCB and certain of its subsidiaries had entered into restructuring agreements with their respective
lenders including, amongst others, Hong Leong Islamic Bank Berhad (“HLIBB”), AmBank (M)
Berhad (“ABB”) and Bank Muamalat Malaysia Berhad (“BMMB”) (collectively, the “Lenders”)
(“Restructuring Agreements”) wherein the parties thereto have agreed to vary the terms and
restructure the existing facilities with the Lenders in accordance with the Restructuring
Agreements in respect of approximately RM124.59 million debt owing to the Lenders. In
conjunction with the execution of the Restructuring Agreements, SCB entered into an Assets
Sharing Agreement (“Assets Sharing Agreement”) with the Lenders and a trustee wherein the
Lenders have agreed to the settlement terms in respect of the debt owing to the Lenders.

Pursuant to the Assets Sharing Agreement, PT IME was identified as a target for disposal by
SCB with the proceeds going towards the Lenders. Premised on the above, the Proposed
Disposal represents an opportunity for SCB to fulfil its obligations pursuant to the Asset Sharing
Agreement in line with the Group’s efforts to restructure its banking facilities.

4. UTILISATION OF PROCEEDS

The Proposed Disposal is expected to raise gross proceeds of up to RM44.2 million, comprising
the Cash Component attributable to SCB, the Shareholders’ Advances to be received and the
Earned Out Profit if the Target Production is achieved.

For illustration purposes, the use of proceeds is presented based on the following scenarios:

Minimum Scenario : Assuming the Target Production is not met and the Earned Out
Profit is waived by SCB

Maximum Scenario : Assuming the Target Production is met and the Earned Out Profit
is received by SCB

The amount is intended to be utilised by the Group as follows:

Minimum Maximum
Scenario Scenario
Timeframe for Total Total
Purposes utilisation (RM’000) (RM’000)

Partial repayment of SCB’s bank Immediately upon 39,653 39,653

borrowings owed to the Lenders(1) receipt
Partial repayment of SCB’s bank Immediately upon - 3,000
borrowings owed to the Lenders(2) receipt
Estimated expenses for the Proposed Over the next two (2) 2,410 2,410
Disposal months
Total 42,063 45,063

Notes:
(1) Details of SCB’s bank borrowings obtained from the Lenders and the proposed repayment
is as set out below:

Amount
outstanding Proposed Interest
Interest rate as at the utilisation savings per
per annum LPD of proceeds annum
Type of facility (%) (RM’000) (RM’000) (RM’000)

HLIBB
Term Financing 5.00 70,886 22,286 951

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 Amount
outstanding Proposed Interest
Interest rate as at the utilisation savings per
per annum LPD of proceeds annum
Type of facility (%) (RM’000) (RM’000) (RM’000)

ABB
Term Financing 5.00 22,147 6,962 199

BMMB
Term Financing 5.00 33,096 10,405 350

Total 126,129 39,653 1,500

The proposed utilisation of proceeds allocated for the repayment of each facility is based
on the Asset Sharing Agreement which stipulates that the proceeds received from the
Proposed Disposal is required to be distributed proportionately between the Lenders
towards their outstanding debts.

(2) Represents the Earned Out Profit to be received subject to the conditions as mentioned in
Section 2 of this Announcement, which will be used to repay any outstanding amount to
the Lenders as per the Asset Sharing Agreement.

5. RISK FACTORS

5.1 Non-completion of the Proposed Disposal

There can be no assurance that all the conditions precedent can be fulfilled and the Proposed
Disposal can be completed within the time period permitted.

Notwithstanding the foregoing, SCB shall endeavor to ensure that the conditions precedent are
fulfilled in a timely manner to facilitate the completion of the Proposed Disposal.

5.2 Non-payment by the Purchaser

The bulk of the payment for the Proposed Disposal will only be received by SCB three (3) months
after the PT IME Shares have been transferred to the Purchaser. As such, there is a risk that
receipt of the funds being delayed or not received notwithstanding that SCB would have already
ceded ownership over PT IME.

Notwithstanding the foregoing, SCB believes that as the Purchaser is a subsidiary of a listed
company, the likelihood of this occurring is minimal. As part of the terms to the Proposed
Disposal, the Purchaser will furnish a corporate guarantee from KAB to guarantee the payment
of the Completion Amount due and payable to the Vendors.

5.3 Performance of the Mini Hydro

As the Earned Out Profit is directly tied to the performance of the Mini Hydro, any factors that
could affect its performance including weather conditions, water flow and turbine performance
will pose a risk to SCB in securing the Earned Out Profit. Besides that, SCB will not be in control
of PT IME during the timeframe given to achieve the Target Performance as the Sale Shares
would have been transferred to KEH upon the completion of the Proposed Disposal.

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6. FINANCIAL EFFECTS OF THE PROPOSED DISPOSAL

6.1 Issued share capital and substantial shareholders’ shareholdings

The Proposed Disposal will not have any effect on the issued share capital of SCB and the
shareholdings of the Company’s substantial shareholders as the Proposed Disposal does not
involve any issuance of new ordinary shares in SCB.

6.2 Net assets (“NA”) and gearing

Based on the latest audited consolidated financial statements of SCB as at 31 December 2020,
the pro forma effects of the Proposed Disposal on the consolidated NA and gearing of SCB are
as follows:

Pro forma (a) - Pro forma (b) -

Minimum Maximum
Scenario Scenario
Unaudited
interim
financial
results for the
Audited as at 15-months After the After the
31 December period ended Proposed Proposed
2020 31 March 2022 Disposal Disposal
RM'000 RM'000 RM'000 RM'000

Share capital 238,321 (1)267,215 267,215 267,215

Reserves (37,995) (38,777) (38,777) (38,777)
Accumulated losses (64,512) (99,061) (2)(170,720) (2)(167,720)

Shareholders' Equity/ NA 135,814 129,377 57,718 60,718

Non-controlling interests (3,433) (4,512) (3)(157) (3)(157)

Total Equity 132,381 124,865 57,561 60,561

No. of shares in issue 317,050 (1)398,985 398,985 398,985

(‘000)

NA per share (RM) 0.43 0.32 0.14 0.15

Interest bearing debt 468,488 467,768 (4)412,739 409,739

(RM'000)

Gearing (times) 3.45 3.62 (4)7.17 (4)6.77

Notes:
(1) After taking into account the effects of the issuance of 81,935,000 private placement
shares.

(2) Including the estimated expenses of RM2.41 million for the Proposed Disposal and the pro
forma loss arising from the Proposed Disposal as illustrated below:

Proforma loss upon the Proposed Disposal Minimum Maximum

Scenario Scenario
RM (‘000) RM (‘000)
SCB’s portion of the Cash Component 8 8
Shareholders’ Advances to be received 42,063 42,063
Earned Out Profit - 3,000
(-) Book value of PT IME (7,241) (7,241)
(-) Shareholders’ advances by SCB to PT IME (101,569) (101,569)
(-) Intangible assets to be written off (2,510) (2,510)
Total pro forma loss (69,249) (66,249)

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 (3) After adjusting for the 21.67% non-controlling interests in PT IME.

(4) After deducting the principal amount for the BOC Loan which will no longer be consolidated
upon completion of the Proposed Disposal and approximately RM30.0 million for the partial
principal repayment of SCB’s bank borrowings owed to the Lenders pursuant to the Asset
Sharing Agreement as set out in Section 4.

6.3 Earnings per share

On 20 December 2021, SCB announced of the change to its financial year end from 31 December
2021 to 31 May 2022. The Proposed Disposal will not have a material effect on the earnings of
SCB for the FYE 31 May 2022 as the Proposed Disposal is only expected to be completed during
the FYE 31 May 2023.

Upon completion of the Proposed Disposal, the net loss attributable to owners of the Company
expected to be realised and pro forma loss per share under the Minimum Scenario and Maximum
Scenario is as below:

Minimum Maximum
Scenario Scenario
Loss attributable to owners of SCB (RM’000) 69,248 66,248
Pro forma loss per SCB share (RM) 0.17 0.17

6.4 Convertible Securities

Save for the following, SCB does not have any outstanding convertible securities:

i) RM19.16 million of redeemable convertible debt issued to AmBank (M) Berhad; and
ii) RM29.98 million of redeemable convertible Islamic debt to Bank Muamalat Malaysia
Berhad.

7. HIGHEST PERCENTAGE RATIO

Based on the latest audited consolidated financial statements of the Company for the FYE 2020,
the highest percentage ratio applicable to the Proposed Disposal pursuant to Paragraph 10.02(g)
of the Main Market Listing Requirement of Bursa Malaysia Securities Berhad is 58.92% which is
calculated based on the aggregate of SCB’s portion of the Cash Component, Earned Out Profit
and Debt Component against the NA of SCB.

8. APPROVALS REQUIRED

The Proposed Disposal is subject to the following approvals being obtained:

(i) The shareholders of SCB and KAB for the Proposed Disposal at their respective
extraordinary general meetings; and

(ii) Any other relevant authorities/parties, if required.

The Proposed Disposal is not conditional upon any other proposals undertaken or to be
undertaken by the Company.

9. INTERESTS OF DIRECTORS, MAJOR SHAREHOLDERS AND/OR PERSONS CONNECTED

None of the Directors and/or major shareholders of SCB and/or any persons connected to them
have any interest, whether direct or indirect, in the Proposed Disposal.

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10. DIRECTORS’ STATEMENT

The Board having considered all aspects of the Proposed Disposal, including but not limited to
the rationale, salient terms of the SPA, as well as the financial effects of the Proposed Disposal,
is of the opinion that the Proposed Disposal is in the best interest of the Company and the terms
and conditions of the SPA are fair and reasonable.

11. ESTIMATED TIMEFRAME TO COMPLETION

Barring any unforeseen circumstances and subject to all relevant approvals being obtained, the
Proposed Disposal is expected to be completed by the first quarter of 2023.

12. ESTIMATED TIMING OF SUBMISSION TO AUTHORITIES

Barring any unforeseen circumstances, the submission to Bursa Securities in relation to the
Proposed Disposal is expected to be made within 2 months from the date of this announcement.

13. ADVISER

Thinkat Advisory Sdn Bhd has been appointed by SCB to act as the Adviser for the Proposed
Disposal.

14. DOCUMENTS AVAILABLE FOR INSPECTION

A copy of the SPA will be made available for inspection at the Company’s Registered Office at
Lot 767, Block 8, Muara Tebas Land District, Demak Laut Industrial Estate, Phase III, Jalan Bako,
93050 Kuching, Sarawak during normal business hours from Monday to Friday (except public
holidays) for a period of three (3) months from the date of this announcement.

This announcement is dated 29 July 2022.

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 APPENDIX I

Salient terms of the SPA

1. PT Inpola Mitra Elektrindo (Company No. 9120504820181) is a limited liability company duly
established under the laws of the Republic of Indonesia and having its domicile at Jl. Brigjend
Katamso No. 124, Kel. Sukaraja, Kec. Medan Maimun, Kota Medan, Prop. Sumatera Utara.

2. PT IME has at the date of this Agreement a share capital of IDR30,000,000,000 consisting of
300,000 shares, of which 300,000 Ordinary Shares have been issued and are fully paid-up and
are all legally and beneficially held by the Vendors (as hereinafter defined) in the proportion set out
in Schedule 1 of the SPA. Further details of PT IME are contained in Part 1 of Schedule 2
(Particulars of the Company) of the SPA.

3. The Vendors have severally agreed to sell and the Purchaser (as hereinafter defined) has agreed
to purchase the entire Sale Shares (as hereinafter defined) on and subject to the terms and
conditions of the SPA.

4. Pursuant thereto, the parties acknowledge and agree that the Vendors have severally agreed to
designate one of the Vendors, Sarawak Cable Berhad (Company No. 199801000274 (456400-
V)), to act as the main contact person and as the authorised representative with authority to bind
the Minority Shareholders (as hereinafter defined) (the “Vendors’ Representative”) in relation to
all matters pertaining to this Agreement.

A. Share Amount and Consideration for Sale Shares

The respective share amounts and consideration in accordance with the SPA are divided as
follows:

Names of Vendors Number of Ordinary Sale Shares to Consideration

be sold to the Purchaser
Sarawak Cable Berhad 235,000 RM7,833.00 only
(Company No. (78.33% of the total issued and paid up
199801000274 (456400-V)) share capital of PT IME)
Tiopan Hasudungan 62,000 RM2,067.00 only
Marpaung (Identity No. (20.67% of the total issued and paid up
3175022404660005) share capital of PT IME)
Parulian Marpaung (Identity 1500 RM50.00 only
No. 3172041203650001) (0.5% of the total issued and paid up
share capital of PT IME)
Ferga Maulia (Identity card 1500 RM50.00 only
No. 3175054902790005) (0.5% of the total issued and paid up
being the heir/estate/personal share capital of PT IME)
representative of Subari Rudi
(Identity No.
0953042208460097)
Total 300,000 RM10,000.00 only

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B. Consideration and Debt Sum

The total sum of Ringgit Malaysia Seventy Five Million (RM75,000,000.00) only compromising of
the following will be paid by the Purchaser:

Item Consideration Amount

a. “Sale Shares Price” being the price payable for RM10,000.00 only
the Sale Shares and shall be paid prior to the
date of the SPA.

b. “Final Debt Sum” being amounts due and RM74,990,000.00 only

owing by PT IME and shall be paid within 3
months from the date on which the fulfilment or
waiver of the Conditions Precedent (as defined
below), which shall be no later than 31 October
2022, or such other date as may be agreed in
writing between the Purchaser and the Vendors
(“Unconditional Date”) (“Completion Amount
Date”), towards settlement of:-

• BOC Loan;

• total liabilities incurred equal to the accounts

payable and accrued expenses (including
those due to related parties and liabilities for
taxes) and other liabilities of PT IME that
would be reflected as liabilities on a balance
sheet of PT IME prepared in accordance with
the accounting policies (including consistent
application of policies in respect of
provisioning, classification between short-
term and long-term liabilities and
management estimation), as verified in the
audited accounts of PT IME and the
completion accounts to be issued as part of
the completion of the disposal exercise , save
and except the BOC Loan and the
Shareholders’ Advances (“Total
Liabilities”); and

• amount of monies advanced and/or loaned

by the Vendors to PT IME as verified by the
audited accounts of PT IME (“Shareholders
Advances”).

Total (Completion Amount) RM75,000,000.00 only

Note 1: The Completion Amount Date may be extended for a period of 1 month from the day following
the expiry of the Completion Amount Date subject to the Purchaser paying to the Vendor an interest
at the rate of [six per cent (6%)] per annum calculated on a daily basis on such balance of the
Completion Amount as is available (after deducting the Retention Amounts (as defined below), BOC
Loan and Total Liabilities) from the expiry of the Completion Amount Date until the day when the
Completion Amount is received in full by the Vendors (“Extended Completion Amount Date").

Note 2: In the event that the Mini Hydro is able to achieve a net export energy of 61.13GWh within
one year of the date the SPA becomes unconditional (“Target Production"), a sum of RM3,000,000
being the Earned Out Profit, shall be payable to SCB. In the event the Mini Hydro is unable to achieve
the Target Production, the Earned Out Profit shall be deemed waived by SCB.

11
 Note 3: The following amounts shall be retained, unless otherwise provided in this Agreement, in PT
IME from the Completion Amount for the following items (“Retention Amount”):
i. sum of Ringgit Malaysia Three Million Seven Hundred Thousand (RM 3,700,000) for other
liabilities as per management accounts as of 31.10.2021, if applicable;
ii. unless otherwise confirmed or determined by the Indonesian Tax Office, a sum of Ringgit
Malaysia Three Million Seven Hundred Seventy-Five Thousand (RM3,750,000) representing
five percent (5%) of the Completion Amount for withholding tax for disposal of shares;
iii. unless otherwise confirmed or determined by the Indonesian Tax Office, a sum of Ringgit
Malaysia One Million Seven Hundred Fifty Thousand (RM1,750,000) for potential value added
tax & withholding tax as per FTDD findings using DTA rate of 50% of the potential sum.

Note 4: The Vendors acknowledge and agree that the Completion Amount paid and/or caused to be
paid by the Purchaser shall be deemed as the full and final settlement for the consideration for the
transfer of Sale Shares to the Purchaser and for the settlement of all Final Debt Sum. For the
avoidance of doubt, where there are additional advances or debts (including the remaining
Shareholders’ Advances) owing by PT IME to the Vendors (if any) up to the Unconditional Date
(“Additional Debt Sum”) the Additional Debt Sum shall be capitalised into Ordinary Shares of PT
IME and shall form part of the Sale Shares to be acquired by the Purchaser. The Purchaser shall not
be required to pay any additional monies or consideration for such capitalised Additional Debt Sum.

Note 5: The Parties acknowledge that where the allocation of Completion Amount towards the BOC
Loan or Total Liabilities is required to be increased for full settlement thereof, an amount shall be
deducted solely from the allocation for the payment towards the Shareholders Advances. For the
avoidance of doubt, any permissible adjustments arising from the Completion Amount shall not in
any way result in the reduction of the Completion Amount.

C. Payment terms

1 Completion Amount
(a) The aggregate consideration for the purchase of the Sale Shares and the settlement
of the Final Debt Sum under this Agreement shall be a maximum sum of Ringgit
Malaysia Seventy-Five Million (RM75,000,000.00) only being the Completion Amount
where such sum shall be paid or part of such sum has been paid prior to the date of
the SPA as follows:

(i) Sale Shares Price

a sum of Ringgit Malaysia Ten Thousand (RM10,000.00) only paid by the
Purchaser to SCB prior to the date of the SPA, the receipt of which is hereby
acknowledged by the Vendors;

(ii) Settlement of Final Debt Sum

The Purchaser shall, in accordance with the SPA, on or before the Completion
Amount Date, cause or procure PT IME to apply the sum of Ringgit Malaysia
Seventy Four Million Nine Hundred Ninety Thousand (RM74,990,000.00) only
in accordance with the SPA towards settlement of the Final Debt Sum.

2 Designated Account

The Parties agree that the Retention Amount and the portion of the Completion Amount
payable towards the Shareholders’ Advances determined in accordance with the SPA be
paid into a Vendors’ account proposed by the Vendor ("Designated Account”).

For the avoidance of doubt, the Parties acknowledged that the BOC Loan and the Total
Liabilities will not form part of the amount to be deposited into the Designated Account and
that the BOC Loan and the Total Liabilities shall be settled directly by the Purchaser and/or
PT IME (as the case may be) directly to BOC and third party creditors of PT IME.

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 3 Priority of Payment

The Parties agree that the Purchaser shall utilise the Completion Amount (subject to the
Retention Amounts and the adjustment stipulated in the SPA) in the following descending
order of priority:-

(a) firstly, the BOC Loan shall be paid to the BOC to redeem and discharge the BOC
Loan in accordance with the redemption statement issued by BOC;
(b) secondly, to pay/settle the Total Liabilities;and
(c) lastly to deposit the remaining amount payable towards the Shareholders’ Advances
into the Designated Account which shall be deemed as full and final settlement of the
Shareholders’ Advances.

If there is any surplus of the Retention Sum after settling the payments due to any relevant
party or authority, such surplus shall be utilised in the order of priority as set out above.

4 Guarantee

The Parties hereby agree that KAB shall guarantee the payment to the Vendors only in
respect of such balance of the Completion Amount as is available (after deducting the
Retention Amounts, BOC Loan and Total Liabilities), towards settlement of the
Shareholders’ Advances (“Guarantee”).

The Guarantee shall only be valid and enforceable from the Unconditional Date and shall
automatically lapse and be of no effect upon the Completion Amount Date, or if the
Purchaser is unable to settle the Final Debt sum by the Completion Amount Date by the
Extended Completion Amount Date.

D. Conditions Precedent

The Proposed Disposal is conditional upon the fulfilment of inter alia, the following conditions within
a period of 3 months from the date of the SPA or such other date as may be agreed in writing
between the Purchaser and the Vendors (“Conditional Period”):

Vendors to satisfy inter alia the following obligations: -

1 Financing or Loan Documents

Facilities Agreement
1.1 the Vendors shall deliver or as the case may be, make available and/or procure to the
Purchaser:
a) Written permit from BOC in accordance with the BOC Loan, consenting to the sale
of the Sale Shares by the Vendors to the Purchaser and to the change of control in
PT IME;
b) Notice from PT IME to BOC explaining the amendment to PPA and to obtain BOC’s
acknowledgment and approval;
c) A Redemption statement from BOC expressly stipulating the amount of the BOC
Loan be paid to the BOC to redeem and discharge the BOC Loan.

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2 Project Documents

PPA

The Vendors shall deliver or as the case may be, make available and/or procure to the
Purchaser:

(a) The latest amendment of the PPA which incorporated the latest Commercial
Operation Date of PLTM Lae Kombih 3 duly signed by Perusahaan Listrik Negara
(Persero) North Sumatera Region (“PLN");
(b) If required, written consents, approval or waiver from PLN consenting to the
change of ownership and change of control in PT IME;
(c) Payment receipt or proof of payment for the delay damages pursuant to Minutes
of Meeting on Delay Payment Mechanism No.
0364.1.BA/HKM.02.01/C08000000/2021 dated 20 December 2021 with PLN
evidencing that such delay damages were paid and settled in full by PT IME;
(d) The duly executed amendment of the PPA to include the extended COD date
(e) The proof of submission of quarterly report of the general conditions of PLTM Lae
Kombih 3 to PLN;
(f) The Annual Generation Profile for year 2023 required to be submitted to PLN by
September 2022 pursuant to Clause 8 paragraph 4 of the PPA;
(g) The proof of submission of environmental report to MEMR;

EPCC Documents

The Vendors shall deliver or as the case may be, make available and/or procure to the
Purchaser:

(a) Procure the Electricity Supporting Business License (Izin Usaha Jasa Penunjang
Tenaga Listrik or “IUJPTL”) and Business Entity Certificate (Sertifikat Badan
Usaha or “SBU”). of the following contractors:
(i) PT Dewata Bulugading Perkasa;
(ii) PT Karya Sakti Sejahtera;
(iii) CV Satria;
(iv) PT Hayyan Jaya Internasional;
(v) PT Esha Sigma Pratama;
(vi) PT Bumi Trans Logistics;
(vii) PT Bangun Nusantara Engineering; and
(viii) PT Alam Daya Makmur.

3 License

The Vendors shall deliver or as the case may be, make available and/or procure to the
Purchaser:
(a) Valid and effective Forest Area Borrow-to-Use Permit (Izin Pinjam Pakai Kawasan
Hutan) (“IPPKH") reflecting the Minister of Environment (“MOE”)’s approval for
PT IME to utilize land that are located within the forest area;
(b) A copy of the valid and effective Water License (Izin Pengusahaan Sumber Daya
Air);
(c) A copy of the Electricity Supply Business Periodic Implementation Report together
with the proof of submission of the same to the Governor of North Sumatera or
MEMR;
(d) A copy of the valid and effective Technical Approval for the storage of B3-
Classified Waste temporarily inside the PLTM Lae Kombih 3 premises.

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 4 Employment

The Vendors shall deliver or as the case may be, make available and/or procure to the
Purchaser:
(a) PT IME’s Company Regulation (Peraturan Perusahaan) that has been approved
by the relevant authority;
(b) PT IME’s statement letter of non-violation of the manpower laws and regulations
from the date the Term Sheet until the date immediately before the transfer of the
Sale Shares in favour of the Purchaser.

5 Premises

The Vendors shall deliver or as the case may be, make available and/or procure to the
Purchaser:
(a) PT IME’s statement that to the best of PT IME’s knowledge, all documents
provided as Data Room Information constitute the entire documents relating to the
right of way settlement and that there are no claim, legal action, proceeding, suit,
litigation, prosecution, investigation, enquiry or arbitration is pending or threatened
by or against PT IME relating to the right of way and/or the payment of the
compensation arising from the right of way from the local community and/or any
other party whatsoever.

6 Technical

The Vendors shall deliver or as the case may be, make available and/or procure to the
Purchaser:
(a) Completion of all outstanding rectification works required by the Purchaser under
the SPA.

E. Conditions Subsequent

The Vendors hereto expressly acknowledge, agree and undertake to deliver deed of transfer of
Subari Rudi’s Sale Shares duly executed by the inheritor of Subari Rudi within 12 months from
the date of this Agreement or any further dates mutually agreed by the Parties in writing.

F. Remedies and Indemnities

1 Remedies as a Consequence of Breach prior to the satisfaction of the conditions set out in the
conditions precedent) and conditions subsequent (“Completion"):

1.1 Material Breach

1.1.1 “Material breach” means a breach of any Vendors’ Warranties, Purchaser’s Warranties or
undertakings and obligations, as the case may be, which results in losses to the Vendors or the
Purchaser, as the case may be, but excluding any losses (actual, contingent or otherwise)
arising from any event, item, matter or transaction, be it with or without any adverse effect, as
disclosed in the Disclosure Letter.

1.1.2 For the avoidance of doubt, the Parties agree that in the case of an inability of transfer of the
Sale Shares to the Purchaser for reasons not attributable to the Purchaser, the Purchaser shall
be entitled to terminate the SPA in any event.

1.2 The SPA may be terminated only in accordance with the following:-

1.2.1 Termination by the Purchaser

at any time prior to the Unconditional Date, if the Vendors are in material breach of any Vendors’
Warranties and undertakings and if such breach is capable of being remedied and the Vendors
fail, refuse or neglect to remedy such breach within Fourteen (14) Business Days after written
notice has been given to the Vendors by the Purchaser providing particulars of the breach and

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 requiring such breach to be remedied, the Purchaser shall be entitled by notice in writing to the
Vendors to terminate the SPA.

1.2.2 Termination by the Vendor

by the Vendors at any time prior to Completion, if the Purchaser is in material breach of any
Purchaser’s Warranties and undertakings and if such breach is capable of being remedied, the
Purchaser fails, refuses or neglects to remedy such breach within Fourteen (14) Business
Days after written notice has been given to the Purchaser by the Vendors providing particulars
of the breach and requiring such breach to be remedied, the Vendors shall be entitled by notice
in writing to the Purchaser to terminate the SPA.

1.3 Consequences of Termination Pursuant to the above clause

1.3.1 Upon the issuance of a notice in writing to terminate the SPA in accordance with the above
clause (“Termination Notice”):
A. In the event the Purchaser is the defaulting party and the Vendors have not failed to
comply with any of the material terms of the SPA, the Vendors shall, within Twenty (20)
Business Days from the issuance of a Termination Notice pursuant to the occurrence
of a termination event as set out in in the above clause, be entitled to elect: -

a. claim for specific performance and elect to continue with the acquisition of the
Sale Shares, the Purchaser shall fully indemnify and hold harmless the Vendors
against any loss, damages, cost or expense incurred as arising from the breach
of such warranty or representation by the Purchaser; or

b. to forfeit absolutely the Sale Shares Price and the Purchaser shall further pay a
sum of Ringgit Malaysia Seven Million Four Hundred Ninety-Nine Thousand
(RM7,499,000.00) in aggregate representing ten per centum (10%) of the Final
Debt Sum, as agreed liquidated damages to the Vendors within Twenty (20)
Business days from such Termination Notice, failing which the Vendors shall be
entitled to charge interest on such sum in accordance the SPA until such sums
are paid in full by the Purchaser to the Vendors. Without limiting the generality of
the foregoing, the Vendors shall also be entitled to commence recovery
proceedings against the Purchaser. Thereafter this Agreement shall be
terminated and be of no further effect and consequently neither Party shall have
any claim against the other Party. For the avoidance of doubt, where the Sale
Shares have been transferred to the Purchaser prior to the date of termination of
the SPA, the Purchaser shall forthwith take all necessary steps to re-transfer the
Sale Shares to the Vendors at the Purchaser’s sole cost and expense with the
Vendor’s interest as registered owner of the Sale Shares intact and return to the
Vendors all documents duly delivered to the Purchaser pursuant to the
Conditions Precedent. Pending such transfer, the Purchaser undertakes it shall
hold such Sale Shares together with all dividends and any other distributions of
profits, surplus or other assets in respect of such Sale Shares and all rights
arising out of or in connection with them, in trust for the Vendors.

B. In the event the Vendors are the defaulting party and the Purchaser has not failed to
comply with any of the terms of the SPA, the Purchaser shall, within Twenty (20)
Business Days from the issuance of a Termination Notice pursuant to the occurrence
of a termination event as set out in the clause above be entitled to elect: -
a. to proceed to Completion. In the case where the Purchaser elects to proceed
with Completion and where such breach is capable of being rectified: -
i. the Purchaser is entitled to request for the Vendors to make good such
material breach by rectifying such material breach at the Vendors’ own
cost and expense (cost of which shall be for the entire rectification cost
and not just the amount in excess of the material breach threshold) and
to the reasonable satisfaction of the Purchaser within Fourteen (14)
Business Days from the Vendors’ receipt of the Purchaser’s decision to
proceed with Completion; or

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 ii. in the event that adjustment on the Final Debt Sum is required, each
Party shall proceed to appoint an independent expert (“Independent
Expert”) to determine the adjustment of the Final Debt Sum. In the event
of differences in the findings of both the Independent Experts, the
Purchaser shall be entitled to proceed with termination in accordance
with clause 8.6.3.1(B)(c) of the SPA.

b. claim for specific performance and elect to continue with the acquisition of the
Sale Shares, the Vendors shall fully indemnify and hold harmless the Purchaser
against any loss, damages, cost or expense incurred as arising from the breach.

c. to proceed with the termination of this Agreement where the Purchaser shall be
entitled to the return of the Sale Shares Price and all monies paid by the
Purchaser to the Vendors from the Vendors (free of interest) and require the
Vendors to pay an additional amount of Ringgit Malaysia One Million Two
Hundred Seventy-Four Thousand Seven Hundred Fifty (RM1,274,750.00) to
the Purchaser as agreed liquidated damages within twenty (20) Business Days,
failing which the Purchaser shall be entitled to charge interest on such sum in
accordance with Clause 11.13 (Interest) of the SPA until such sums are paid in
full by the Vendors to the Purchaser. Without limiting the generality of the
foregoing, the Purchaser shall also be entitled to commence recovery
proceedings against the Vendors for such outstanding amounts due. Thereafter
this Agreement shall be terminated and be of no further effect and consequently
neither Party shall have any claim against the other Party. For the avoidance of
doubt, where the Sale Shares have been transferred to the Purchaser prior to
the date of termination of this Agreement, the Purchaser shall forthwith take all
necessary steps to re-transfer the Sale Shares to the Vendors at the Vendor’s
sole cost and expense with the Vendor’s interest as registered owner of the Sale
Shares intact and return to the Vendors all documents duly delivered to the
Purchaser pursuant to Schedule 3 of the SPA. Any cost incurred by the
Purchaser in re-transferring the Sale Shares to the Vendors shall be fully borne
by the Vendors. Pending such transfer, the Purchaser undertakes it shall hold
such Sale Shares together with all dividends and any other distributions of profits,
surplus or other assets in respect of such Sale Shares and all rights arising out
of or in connection with them, in trust for the Vendors.

C. Where neither Party is in default, the Parties shall proceed with the termination of this
Agreement where the Purchaser shall be entitled to the return of the Sale Shares Price
and all monies paid by the Purchaser to the Vendors from the Vendors (free of interest)
within twenty (20) Business Days failing which the Purchaser shall be entitled to charge
interest on such sum in accordance with the SPA (Interest) until such sums are paid in
full by the Vendors to the Purchaser. Thereafter this Agreement shall be terminated
and be of no further effect and consequently neither Party shall have any claim against
the other Party. For the avoidance of doubt, where the Sale Shares have been
transferred to the Purchaser prior to the date of termination of this Agreement, the
Purchaser shall forthwith take all necessary steps to re-transfer the Sale Shares to the
Vendors with the Vendor’s interest as registered owner of the Sale Shares intact and
return to the Vendors all documents duly delivered to the Purchaser pursuant to the
Conditions Precedent. Any cost incurred by the Purchaser in re-transferring the Sale
Shares to the Vendors shall be borne by the Parties equally. Pending such transfer, the
Purchaser undertakes it shall hold such Sale Shares together with all dividends and
any other distributions of profits, surplus or other assets in respect of such Sale Shares
and all rights arising out of or in connection with them, in trust for the Vendors.

2 Limitations of the Vendors’ Liability

For the purposes of this clause, reference to “Fundamental Warranties” means representations
and warranties given by the Vendors in accordance with the SPA.

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 In respect of the Fundamental Warranties, the maximum amounts of claims set out in the SPA
below will not be applicable but shall not exceed the Completion Amount.

The maximum amount which the Vendors are required to pay in respect of all claims whenever
made shall not (when aggregated with the amount of all other claims) exceed 50% of the
Completion Amount. The Purchaser shall not make any claim for a breach of Warranties unless
full details of the claim have been notified to the Vendors in accordance with the terms of the SPA
within six (6) years from the day the transfer of Sale Shares has been completed from the Vendor
to the Purchaser excluding the Subari Rudi’s Sale Shares, which date shall be either 60 days from
the pre-acquisition announcement in accordance with the Conditions Precedent or 7 days from the
Unconditional Date, whichever is later.

G. Termination

Right to terminate

(a) If the foregoing provisions of Clause 6.2 of the SPA are not fully complied with by the
Vendors by or on the Unconditional Date, the Purchaser shall be entitled (in addition to
and without prejudice to all other rights or remedies available to the terminating Party
including the right to claim damages) by written notice to the Vendors served on such date:
(i) to elect to terminate the SPA (other than the surviving provisions in the SPA) without
liability on the part of the terminating Party; or
(ii) to effect completion of parties obligations under the SPA so far as practicable having
regard to the defaults which have occurred; or
(iii) to fix a new date for the fulfilment or waiver of the obligations set out in the Conditions
Precedent by the Parties in which case the foregoing provisions of this clause shall
apply as so deferred but provided such deferral may only occur once.

(b) If the SPA is terminated in accordance with the above, SCB shall within 5 Business Days,
reimburse to the Purchaser:
(i) the Sale Shares Price free of interest;
(ii) any part payment of the Shareholders Advance made by the Purchaser to the
Vendors Representative (if any); and
(iii) any sum of monies made by the Purchaser in relation to PT IME

failing which, such sum shall be deemed as a debt owing by SCB to the Purchaser and
the Purchaser shall be entitled to charge interest on such sum in accordance with the SPA
until such sum is paid in full by SCB to the Purchaser. Without limiting the generality of the
foregoing, the Purchaser shall be entitled to commence recovery proceedings against the
Vendors. Thereafter, neither the Purchaser nor the Vendors shall have any claim under
the SPA of any nature whatsoever against the other Party except in respect of any rights
and liabilities:
(i) which have accrued before termination;
(ii) under the surviving provisions of the SPA; or
(iii) arising in respect of any fraud or willful misconduct of the Vendors or the Purchaser.

(c) Simultaneously with the refund of monies to the Purchaser, the Parties shall comply with
the consequence of termination pursuant to the SPA.

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