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provision subordinating our indebtedness to Shareholders and our affiliates to the amounts owing under the
facilities granted by Caterpillar Financial.
In June 2008, Yaw Chee Siew provided a personal guarantee as security for banking facilities provided to
us by RHB Bank Berhad. These facilities include: (i) a vessel construction facility of US$14.0 million; (ii) a
vessel construction facility of US$15.0 million; and (iii) a revolving credit facility of S$20.0 million. The
largest amount drawn down on each of these facilities as at the Latest Practicable Date was US$8.4 million,
US$7.4 million and S$20.0 million, respectively.
Subsequent to completion of the Offering, we intend to negotiate for the discharge of these personal
guarantees and undertakings. In the event that Bangkok Bank, Hong Leong Finance, Caterpillar Financial and
RHB Bank Berhad do not release Yaw Chee Siew from his obligations under these guarantees or this
undertaking, Yaw Chee Siew will continue to provide the personal guarantees and undertaking for the relevant
facilities.
In March 2008, Yaw Chee Siew provided a personal guarantee as security for banking facilities provided
to us by Standard Chartered Bank. These facilities include: (i) a refund guarantee facility of up to
US$59.9 million; (ii) a refund guarantee facility of up to Eur 10.9 million; and (iii) treasury facilities. Yaw
Chee Siew also provided a subordination undertaking not to demand or accept payment of monies or liabilities
or advances owing to him or Brizill International by our Company, as long as the outstanding amount of such
monies or liabilities or advances owing to him or Brizill International, by our Company is not less than
S$51.4 million, while any facilities granted by Standard Chartered Bank to our Company remain outstanding.
Subsequent to completion of the Offering, the personal guarantee given by Yaw Chee Siew will be
discharged and we intend to negotiate for the discharge of the subordination undertaking. In the event that
Standard Chartered Bank does not release Yaw Chee Siew from his obligations under this undertaking, Yaw
Chee Siew will continue to provide the undertaking for the relevant facilities.
Our Directors believe that the above guarantees and undertaking were not given on an arm’s length basis
as Yaw Chee Siew did not receive any benefit from the transaction.
Purchase of Sawn Timber by Us from Rimalco
During the Period under Review, we purchased sawn timber from Rimalco to construct the decks of the
vessel that we build. The aggregate amount of purchases from Rimalco are set out below:
FY2005 FY2006 FY2007
Five Months
Ended
31 May 2008
Period from
1 January
2008 to the
Latest
Practicable
Date
(S$’000) (S$’000) (S$’000) (S$’000) (S$’000)
Purchases from Rimalco ............. — — 220 — —
The payment for this purchase has been fully settled. Our Directors believe that the above transaction was
carried out on an arm’s length basis.
We anticipate that, with the expansion of our shipbuilding activities, we may increase our purchases of
sawn timber from Rimalco. Having taken into consideration pertinent factors including, but not limited to the
quality and reliability of product, pricing terms, delivery time and the track record of Rimalco, our Directors
believe that purchases of sawn timber from Rimalco will be beneficial to us so long as the transactions are
entered into on an arm’s length basis and based on normal commercial terms.
When entering into such future transactions with Rimalco, we will follow the review procedures described
in “— Shareholders’ Mandate — Guidelines and Review Procedures for Mandated Interested Person
Transactions”.
Lease Agreement Between Our Company and Samling Singapore
In June 2004, our Company leased its office premises at 9 Temasek Boulevard #33-01, Suntec Tower
Two, Singapore 038989 from Samling Singapore for a period of three years. This office unit is owned by
Samling Strategic, who leased the office unit to Samling Singapore, who in turn, subleased it to our Company.
In June 2007, the sublease was extended for a further term of three years. The monthly rental payable to
Samling Singapore was increased from S$4.00 per square foot per month to S$8.00 per square foot per month,
and the lettable floor area of the unit was increased from 2,500 square feet to 4,550 square feet.
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