a) Lot No. 1385, Tempat Relau, Mukim 13, Daerah Timor Laut, Pulau Pinang held under Geran Mukim No. 264 measuring approximately 22,586.4816 square metres;
b) Lot No. 2102, Tempat Paya Terubong, Mukim 13, Daerah Timor Laut, Pulau Pinang held under Geran Mukim No. 256 measuring approximately 17,148.5269 square metres;
c) Lot No. 3224, Mukim 13, Daerah Timor Laut, Pulau Pinang held under Geran No. 3865 measuring approximately 55,195.5686 square metres; and
d) Lot No. 7629, Mukim 13, Daerah Timor Laut, Pulau Pinang held under Geran No. 39680 measuring approximately 4,048 square metres

The Notice of Acceptance dated 14 December 2013 from the Property Agent of LPSB was received by Sunway on 16 December 2013 ("Notice of Acceptance").

SCP was successful in bidding for the Land from the Property Agent for LPSB for a total purchase consideration of RM267,418,000/-.

Pursuant to the Notice of Acceptance, the parties will enter into a sale and purchase agreement (“SPA”) for the Proposed Acquisition within 14 days from the date of the Notice of Acceptance. The earnest deposit paid during the submission of tender will form part of the initial 10% of the purchase price which is payable upon the execution of the SPA.

The purchase consideration of RM267,418,000/- is calculated at the rate of up to approximately RM251 per square foot based on a total land area of approximately 24.458 acres.

The purchase consideration was arrived at subsequent to an open tender for the Land on 12 December 2013. The minimum reserve price for the Land was fixed at RM200/- per square foot and Sunway's bid price of RM251 per square foot was arrived at, taking into consideration the development potential of the Land and Sunway's required internal rate of return.

No valuation on the Land was carried out, given Sunway’s knowledge of the market value of the surrounding properties and the potential development value of similar land within Penang. Sunway is not able to disclose the net book value of the Land as it is not privy to this information.

There are no liabilities (including contingent liabilities and guarantees) to be assumed by Sunway arising from the Proposed Acquisition.

It is located near Kek Lok Si Temple, the tallest pagoda in Southeast Asia and the lower Train Station to the famous Penang Hill Resort. Through the main thoroughfare Jalan Paya Terubong, it is linked to Georgetown via Jalan Air Itam to the East, and linking to the FTZ area of Bayan Lepas and the Penang Bridge in the west through Jalan Relau.

The proposed development for the Land consists of commercial shops, SOHO and highrise residential units and this will strengthen Sunway’s presence in Penang property market.

Hence, with the improving State’s tourism and economic sentiment coupled with the strategic location of the Land, Sunway is confident that the project will get a good response when it is launched.

A feasibility study was conducted by Sunway and its external consultants prior to the open tender.

The preliminary feasibility of the Proposed Acquisition indicates that the proposed development of the Land is expected to generate an estimated gross development value of RM1.5 billion. Market studies were also conducted to assess the relevant property market conditions and financial feasibility.

Based on the results of the studies, the management of Sunway is of the view that the project financials meet the internal investment hurdle rate for Sunway to proceed with the Proposed Acquisition.

The Proposed Acquisition and the subsequent proposed development on the Land to be undertaken by SCP are subject to the risks inherent in the property development and construction industries, which include but are not limited to competition risks, unstable global and domestic economic conditions, currency fluctuations, unfavorable interest rate movements, inflation hike, shortages of raw materials and labour, increase in the cost of capital, political instability, changes in government initiatives, changes in statutory regulations and legal disputes.

Sunway, with many years of experience in the business of property development and construction, will take the necessary steps to mitigate the various risks identified. However, no assurance can be given that significant changes in any of these factors will not materially affect Sunway’s operation and financial performance.

In addition to the above, the Land is sold without vacant possession and it is on “as is where is” basis which means that the Land is sold subject to any right of way or any structures or squatters thereon and all conditions of title whether express or implied affecting the Land and subject further to any existing tenancies/occupations affecting the Land.

The Proposed Acquisition will be funded through bank borrowings and/or internally generated funds.

11. EFFECTS OF THE PROPOSED ACQUISITION

11.1 On Share Capital and Substantial Shareholders' Shareholding

The Proposed Acquisition will not have any effect on the share capital and substantial shareholders' shareholding of Sunway as it does not involve any allotment or issuance of new shares by Sunway.

The Proposed Acquisition is not expected to have any immediate material effect on the earnings per share, net assets per share and gearing of Sunway for the current financial year ending 31 December 2013. However, the Proposed Acquisition is expected to contribute positively to the future earnings of Sunway Group.

The Proposed Acquisition does not require approval from the shareholders of Sunway but is subject to approval/consent of the relevant authorities.

Insofar as the Directors are aware, none of the directors or major shareholders of Sunway or persons connected with them has any interest, whether direct or indirect, in the Proposed Acquisition.

The Board of Directors of Sunway is of the opinion that the Proposed Acquisition is in the best interests of Sunway.

The highest percentage ratios as set out in Paragraph 10.02(g) of the Main Market Listing Requirements of Bursa Malaysia Securities Berhad applicable to the Proposed Acquisition is 7.5%, which is the value of the purchase consideration compared with the net assets of Sunway based on the audited financial statements of Sunway for the financial year ended 31 December 2012.

16. ESTIMATED TIMEFRAME FOR COMPLETION OF THE PROPOSED ACQUISITION

Barring any unforeseen circumstances and subject to the approval of the relevant authorities, the Proposed Acquisition is expected to be completed by the last day of the period of 3 months from the SPA with an automatic extension for a further period of 1 month subject to the payment of interests on the unpaid balance by SCP.

The Notice of Acceptance is available for inspection at the registered office of Sunway at Level 16, Menara Sunway, Jalan Lagoon Timur, Bandar Sunway, 47500 Subang Jaya, Selangor Darul Ehsan during normal business hours (9.00 a.m. to 6.00 p.m.) from Monday to Friday (except public holidays) for a period of 3 months from the date of this announcement.