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MALTON BERHAD (“MALTON” OR “COMPANY”) PROPOSED PRIVATE PLACEMENT OF UP TO 40,000,000 NEW ORDINARY SHARES OF RM1.00 EACH IN MALTON (“PROPOSED PRIVATE PLACEMENT”)

1. INTRODUCTION

On behalf of the Board of Directors of Malton (“Board”), KAF Investment Bank Berhad (“KAF”) wishes to announce that the Company proposes to undertake the Proposed Private Placement.

2. PROPOSED PRIVATE PLACEMENT

2.1 Details of the Proposed Private Placement

The Proposed Private Placement would involve the issuance of up to 40,000,000 new ordinary shares of RM1.00 each in Malton (“Malton Shares” or “Shares”) (“Placement Shares”), representing approximately 9.3% of the issued and paid-up share capital of the Company, to be issued at an issue price to be determined and announced later.

2.2 Placement arrangement

The Placement Shares are intended to be placed out to third party investor(s) to be identified at a later date and who qualify under Schedules 6 and 7 of the Capital Markets & Services Act 2007. In addition, the Placement Shares are not intended to be placed out to any director, major shareholder or chief executive of Malton or any interested person connected with such director, major shareholder or chief executive. The Proposed Private Placement may be implemented in one or more tranches within a period of six (6) months from the date of the approval from Bursa Malaysia Securities Berhad (“Bursa Securities”) for the Proposed Private Placement or any extended period as may be approved by Bursa Securities, subject to the then prevailing market conditions.

2.3 Basis of determining the issue price of the Placement Shares

The issue price of the Placement Shares will be determined and fixed by the Board at a later date after receipt of all relevant approvals for the Proposed Private Placement. The final issue price for each tranche of the Placement Shares shall be determined separately in accordance with market-based principles. The Placement Shares may be issued at a discount of not more than 10% to the five (5)-day weighted average market price of Malton Shares immediately preceding the price-fixing date. In any event, the issue price of the Placement Shares shall not be lower than the par value of Malton Shares of RM1.00 each.

2.4 Ranking of the Placement Shares

The Placement Shares shall, upon allotment and issue, rank pari passu in all respects with the existing Malton Shares, except that they shall not be entitled to any dividends, rights, allotments and/or any other forms of distribution, the entitlement date of which is, prior to the date of allotment of the Placement Shares. The Placement Shares are not expected to be entitled to the first and final single-tier dividend of 3% for every one Share, the entitlement date of which has been fixed on 31 December 2014.

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2.5 Listing of and quotation for the Placement Shares

An application will be made to Bursa Securities for the listing of and quotation for the Placement Shares on the Main Market of Bursa Securities.

2.6 Utilisation of proceeds

The quantum of proceeds to be received by the Company pursuant to the Proposed Private Placement would depend on the actual number of Placement Shares issued and the final issue price. For illustration purpose only, assuming that the entire 40,000,000 Placement Shares are fully issued at an indicative issue price of RM1.00 each, the Company would raise gross proceeds amounting to RM40,000,000 from the Proposed Private Placement. The gross proceeds are proposed to be utilised as follows:

Proposed utilisation of proceeds

Gross Proceeds RM’000

Expected utilisation time

frame from date of completion of the Proposed Private

Placement

Repayment of bank borrowings(1) 20,000 Within

12 months

Working capital for Malton and its subsidiaries

(“Malton Group” or the “Group”)(2)

19,800 Within 12 months

Estimated expenses relating to the Proposed

Private Placement(3)

200 Within 1 month

Total 40,000

Notes:

(1) As at 30 September 2014, the Group’s bank borrowings was approximately RM256.18 million as per the unaudited interim financial report for the financial period ended 30 September 2014. The estimated annual interest savings arising from the part repayment of the Group’s borrowings based on an average interest rate of 8% per annum would be approximately RM1.60 million. Any proceeds not utilised by the Company to repay bank borrowings shall be utilised as working capital of the Group.

(2) Approximately RM19.80 million is proposed to be utilised to finance the Group’s working capital requirements for existing and up-coming property development projects and construction jobs over the next 12 months. Such working capital may include project development related costs, including payment to contractors/sub-contractors/suppliers, staff related costs, promotional and marketing expenses, general overheads and other administrative expenses.

(3) The estimated expenses consist of professional fees, fees payable to authorities and other miscellaneous expenses to be incurred in relation to the Proposed Private Placement. Any variation in the actual amount of expenses will be adjusted to/from the amount allocated for working capital purposes.

Any difference between the illustrated proceeds above and the actual proceeds raised from the Proposed Private Placement (which is dependent on the issue price and the final number of Placement Shares issued) as well as any differences in the actual expenses relating to the Proposed Private Placement shall be adjusted to the allocation for working capital of the Malton Group.

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3. RATIONALE FOR THE PROPOSED PRIVATE PLACEMENT

The purpose of the Proposed Private Placement is to enable the Company to raise additional funds in an expeditious manner to reduce its bank borrowings. The Board also intends to utilise the placement proceeds to partly finance the working capital requirements of the Group for the existing and up-coming new property development projects and construction jobs of the Group over the next 12 months. The Proposed Private Placement enables the Company to raise equity capital without having any interest cost burden which would otherwise arise if the Group takes up more bank borrowings. In this respect, the Board expects the Proposed Private Placement to contribute positively to the future earnings and continuing growth of the Malton Group.

After due consideration of the various methods of fund raising, the Board is of the opinion that the Proposed Private Placement is an appropriate avenue of fund raising at this juncture as it enables the Company to raise funds expeditiously. Upon completion of the Proposed Private Placement, the enlarged capital base and shareholders’ funds are also expected to further strengthen the financial position of the Group. In addition, the Proposed Private Placement may potentially increase the liquidity of the Malton Shares in the market.

4. EFFECTS OF THE PROPOSED PRIVATE PLACEMENT

The proforma effects of the Proposed Private Placement are set out below in the ensuing sections: 4.1 Issued and paid-up share capital

The proforma effects of the Proposed Private Placement on the issued and paid-up share capital of the Company are as set out below. No. of Malton Shares

RM

Issued and paid-up share capital as at the date of this announcement

428,415,812 428,415,812

Add: Placement Shares to be issued

pursuant to the Proposed Private Placement

40,000,000

40,000,000

Enlarged issued and paid-up share capital

468,415,812 468,415,812

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4.2 Net assets (“NA”) per share and gearing

The proforma effects of the Proposed Private Placement on the NA per share and gearing of the Group, based on the audited consolidated financial statements of the Company as at 30 June 2014, are as set out below.

Audited as at

30 June 2014 After the Proposed Private Placement

RM’000 RM’000

Share capital 422,550 462,550

Reserves 236,776 (1)(2)

236,576

Shareholders’ funds / NA 659,326 699,126

No. of Malton shares (’000) 422,550 462,550

NA per Malton share (RM) 1.56 1.51

Interest bearing borrowings (RM’000) 390,170 (3)370,170

Gearing (times) 0.59 0.53

Notes: (1) After deducting the estimated expenses in relation to the Proposed Private Placement from

the share premium and retained earnings accounts amounting to about RM200,000.

(2) Assuming the issue price for the Placement Shares is RM1.00 each.

(3) Based on the utilisation of approximately RM20 million of the total gross proceeds to repay part of the Group’s bank borrowings as disclosed in Section 2.6 of this announcement.

4.3 Earnings and earnings per share (“EPS”)

The Proposed Private Placement is not expected to have any material effects on the consolidated earnings of the Group for the financial year ending 30 June 2015 except for the corresponding dilution in the consolidated EPS of Malton as a result of the increase in the number of Malton Shares pursuant to the Proposed Private Placement. Nevertheless, the Group would be in the position to repay part of its bank borrowings, which would therefore result in some interest savings to the Group. Based on an average interest cost of 8% per annum, the placement proceeds of approximately RM20 million which are allocated to repay a part of the bank borrowings are expected to result in an annual interest savings of about RM1.60 million.

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4.4 Substantial shareholders’ shareholdings

The proforma effects of the Proposed Private Placement on the substantial shareholder’s shareholdings of Malton based on the Register of Substantial Shareholders are as set out below.

Substantial shareholders

As at the date of this announcement After the Proposed Private Placement

Direct Indirect Direct Indirect

No. of Shares

% No. of Shares

% No. of Shares

% No. of Shares

%

Malton Corporation Sdn Bhd

158,477,313 36.99 - - 158,477,313 33.83 - -

Tan Sri Lim Siew Choon

- - (1)158,477,313 36.99 - -

(1)158,477,313 33.83

Puan Sri Tan Kewi Yong

- - (1)158,477,313 36.99 - -

(1)158,477,313 33.83

Note:

(1) Deemed interested by virtue of his/her substantial shareholdings in Malton Corporation Sdn

Bhd.

4.5 Convertible securities

The Proposed Private Placement is not expected to have any effects on the Company’s existing warrants 2011/2018 (“Warrants”), 7-year 6% redeemable convertible secured loan stocks (“RCSLS”) and the options granted under the employees share option scheme (“ESOS”). Save for the Warrants, RCSLS and ESOS options, the Company does not have any other existing convertible securities as at the date of this announcement.

5. APPROVALS REQUIRED

The Proposed Private Placement is subject to and conditional upon approvals being obtained from the following: (i) Bursa Securities, for the listing of and quotation for the Placement Shares to be issued

pursuant to the Proposed Private Placement on the Main Market of Bursa Securities. (ii) any other relevant authorities, if required. The Company had earlier obtained a general mandate from its shareholders at the last Annual General Meeting which was convened on 20 November 2014 pursuant to Section 132D of the Companies Act, 1965 that empowers the Board to issue new ordinary shares in Malton from time to time upon such terms and conditions and for such purposes as the Board may deem fit provided that the aggregate number of new Malton Shares to be issued does not exceed ten percent (10%) of the issued and paid-up share capital of the Company. The said mandate is valid until the next annual general meeting to be convened. The Proposed Private Placement is not conditional upon any other proposals undertaken or to be undertaken by the Company.

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6. INTEREST OF DIRECTORS, MAJOR SHAREHOLDERS AND/OR PERSONS CONNECTED WITH THEM

None of the Directors and/or major shareholders of the Company and/or persons connected to them as defined in the Main Market Listing Requirements has any interest, whether direct or indirect, in the Proposed Private Placement.

7. DIRECTORS’ RECOMMENDATION

The Board, after having considered all aspects of the Proposed Private Placement, is of the opinion that the Proposed Private Placement is in the best interest of the Group.

8. ADVISER AND PLACEMENT AGENT The Board has appointed KAF as the Adviser and Placement Agent for the Proposed Private Placement.

9. ESTIMATED TIMEFRAME FOR SUBMISSION TO THE AUTHORITIES

Barring unforeseen circumstances, all the relevant applications to the authorities in relation to the Proposed Private Placement will be made within one (1) month from the date of this announcement.

10. ESTIMATED TIMEFRAME FOR COMPLETION

Barring unforeseen circumstances, the Proposed Private Placement is expected to be completed by the end of first (1

st) quarter of 2015.

This announcement is dated 28 November 2014.