ZELAN BERHAD (“ZB” or the “Company”)

DISPOSAL OF 750,000 ORDINARY SHARES OF RM1.00 EACH IN IJM CORPORATION BERHAD

1.0 INTRODUCTION
 
The Shareholders of the Company, at the Extraordinary General Meeting held on 7 September 2010, had approved the proposed disposal of 30.0 million shares in IJM Corporation Berhad ("IJM"). Pursuant to Paragraph 10.06 (1) of the Main Market Listing Requirements of Bursa Malaysia Securities Berhad (“MMLR”), ZB wishes to announce that it had, on 20 December 2010 and 21 December 2010, further disposed a total of 750,000 ordinary shares of RM1.00 each in IJM (the “Sale Shares”) in the open market at an average disposal price of RM6.40 per share for a total consideration of RM4,802,497.96 (the “Disposal”).

2.0 DETAILS OF THE DISPOSAL
 
2.1 Information on IJM

IJM, a public listed company listed on the Main Board of Bursa Malaysia is principally involved in the construction, property development, manufacturing and quarrying, infrastructure concessions and plantations.  IJM has an authorised capital of RM3,000,000,000.00 and a paid-up capital of RM1,351,031,575.00.

2.2 Information on the Sale Shares

The Sale Shares comprised of 750,000 ordinary shares of RM1.00 each representing approximately 0.06% of the total issued and paid-up capital of IJM.

2.3 The cash consideration of RM4,802,497.96 for the Sale Shares was derived on “willing buyer-willing seller” basis.

2.4 There are no liabilities to be assumed by the purchaser arising from the Disposal.

3.0 RATIONALE OF THE DISPOSAL

The rationale of the disposal is to realise funds from the disposal to provide working capital for the Group's operating requirements and to repay bank borrowings.

4.0 ORIGINAL COST OF INVESTMENT AND UTILISATION OF PROCEEDS

The original cost of investment of the Sale Shares was approximately RM4.14 per share at Group level and RM3.50 per share at Company level.  Subsequently since acquisition, the Company had received payment of dividends from IJM.  As at 30 November 2010, the book value of the Sale Shares was approximately RM5.74 per share at Group level.

The proceeds will be utilised to provide working capital for the Group's operating requirements.

5.0 COMPLETION DATE

The Disposal was completed on 21 December 2010.

6.0 FINANCIAL EFFECTS

The Disposal will have a positive financial implication on the earnings per share and gearing but will not have any material financial implication and effect to the net assets per share. The Disposal has no effect on the share capital and substantial shareholders’ shareholding of the Company.  The gain on the Disposal at Group level was approximately RM1.694 million while at the Company level was approximately RM2.179 million.

7.0 APPROVALS REQUIRED

The Sale Shares arising from the Disposal is part of the 30.0 million ordinary shares of RM1.00 each in IJM pursuant to the shareholders' mandate granted on 7 September 2010.

8.0 DIRECTORS’ AND SUBSTANTIAL SHAREHOLDERS’ INTERESTS

None of the Directors and/or Substantial Shareholders of the Company or persons connected to them has any interest, direct or indirect, in the Disposal.

9.0 PERCENTAGE RATIO
 
The highest percentage ratio applicable to the transaction pursuant to paragraph 10.02 (g) of the MMLR is 1.1%. On aggregate, the highest percentage ratio applicable to the transaction pursuant to paragraph 10.02 (g) of the MMLR is 52.2%. The summary of the disposals of IJM shares, was as follows:

10.0 STATEMENT BY BOARD OF DIRECTORS
 
The Board of Directors of ZB, after due consideration of all aspects of the Disposal, are of the opinion that the Disposal is in the best interest of ZB. 

This announcement is dated 22 December 2010.