Asset Acquisitions and Disposals::Proposed Disposal of 49% Equity Interest in ZICO Trust Limited

ZICO HOLDINGS INC.

Incorporated in Labuan, Malaysia

Company Registration No. LL07968

PROPOSED DISPOSAL OF 49% OF EQUITY INTEREST IN ZICO TRUST LIMITED ("SALE SUBSIDIARY")

1. INTRODUCTION

1. The board of directors ("Board") of ZICO Holdings Inc. ("Company", and together with its subsidiaries and associated companies, the "Group") wishes to announce that the Company's wholly-owned direct subsidiary, ZICO Malaysia Sdn Bhd ("Vendor") has on 17 December 2021 entered into a conditional sale and purchase agreement ("SPA") with Riau Capital Pte. Ltd ("Purchaser", together with the Vendor, the "Parties", and each a "Party").
2. Pursuant to the SPA, the Vendor has agreed to sell to the Purchaser, and the Purchaser has agreed to acquire from the Vendor the Sale Shares (as defined in Paragraph 2.3 below) on the terms and subject to the conditions of the SPA ("Proposed Disposal").
3. The Sale Subsidiary is an indirect subsidiary of the Company, and is wholly-owned by the Vendor.
4. Upon completion of the Proposed Disposal ("Completion"), the Company will hold 51% equity interest in the Sale Subsidiary.

2. THE PROPOSED DISPOSAL

2.1 Information on the Sale Subsidiary

Details of the Sale Subsidiary as at the date of the SPA are as follows:

ZICO Holdings Inc.

Company Registration No. LL07968

Level 15-3 MenaraMilenium, JalanDamanlela, Pusat Bandar Damansara, 50490 Kuala Lumpur t. [phone] f. [phone]

www.zicoholdings.com

Name of	Sale	Principal activity	Principal place of	Issued and paid-	Group's
Subsidiary				business	/	up share capital	effective equity
				Country	of			interest
				incorporation
ZICO	Trust	Trust	services,	Labuan, Malaysia	US$39,480		100%
Limited		company				consisting	of
		secretarial,			3,948 ordinary
		corporate			shares
		services	and
		related
		consultancy
		services

The Sale Subsidiary has been in operation in the Labuan International Business and Financial Centre since 2005 and holds a licence issued by the Labuan Financial Services Authority ("LFSA") to operate as a Labuan trust company ("Trust Licence"). It provides trust company and trustee services as part of its ordinary business.

1. Information on the Purchaser
   The Purchaser is a company incorporated under the laws of Singapore as an investment holding company. It provides investment services to clients intending to invest in South East Asia including deal structuring and advisory services for acquisition of strategic assets in the region. The Purchaser has a joint venture with Carte Blanche Family Office AG, a multi-family office incorporated in Switzerland and regulated by the self-regulatory organisation - Association Romande des Intermédiares Financiers (ARIF).
   Pursuant to the SPA, the Purchaser may assign and transfer (in whole and not in part only) of all its rights, interests and obligations under the SPA without the prior written consent of the Vendor provided that such assignment and transfer shall have been effected no later than the submission of an application to the LFSA for its approval for the transfer of the legal and beneficial ownership of the Sale Shares from the Vendor to the Purchaser or the suitability of the Purchaser as a shareholder of the Sale Subsidiary, and further provided that the assignee or transferee is: (a) an associated company of the Purchaser in respect of which it owns not less than 30% equity interests; and (b) not a competitor of the Vendor.
   The Purchaser is not an interested person as defined in the SGX-STListing Manual Section B: Rules of Catalist ("Catalist Rules"). The Proposed Disposal is not an interested person transaction as defined in the Catalist Rules.
2. Sale Shares
   The Vendor agrees to sell and the Purchaser agrees to purchase 1,935 ordinary shares in the capital of the Sale Subsidiary, representing 49% of the total issued share capital of the Sale Subsidiary ("Sale Shares") free from all encumbrances together with all rights attaching to them as at the Completion Date (as defined in paragraph 2.6), for the Consideration (as defined in paragraph 2.4) on and subject to the terms and conditions of the SPA.

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2.4 Consideration

1. Pursuant to the SPA, the aggregate consideration for the Sale Shares shall be RM9,600,000 ("Consideration"), to be fully paid in a single tranche on the Completion Date.
2. The Consideration were arrived at pursuant to arm's length negotiations between the Vendor and the Purchaser on a willing-buyer and willing-seller basis, taking into account a number of factors including, inter alia, the historical performance and business prospects of the Sale Subsidiary. There is no open market value for the Sale Shares as they are not publicly traded. The Board of Directors in evaluating the Proposed Disposal has considered a few factors including the increasing business challenges faced by the Sale Subsidiary and the reasons stated in Paragraph 4 below.

2.5 Conditions Precedent

Completion is subject to and conditional upon, inter alia, the fulfillment on or prior to the date of

Completion of the following conditions ("Conditions Precedent"):

1. the Parties having agreed on the form of the shareholders' agreement to be executed by the Vendor, the Purchaser, and the Sale Subsidiary on Completion;
2. if required to be obtained pursuant to any applicable laws, regulations and/or the Catalist Rules, the approval of the Company's shareholders having been duly granted for the disposal by the Vendor of the Sale Shares;
3. the Trust Licence is valid and subsisting as well as not otherwise revoked, restricted or subject to conditions (including those which may be imposed on or after the date of the SPA) which are not acceptable to the Purchaser;
4. any and all necessary consents, approvals and waivers from government, administrative and regulatory authorities, bodies or courts, and third parties in respect of the Proposed Disposal pursuant to any contractual arrangements or otherwise (where required) having been obtained and such consents, approvals and waivers not having been amended or revoked before the Completion Date, including but not limited to:
5. 1. the written approval from LFSA for the transfer of the legal and beneficial ownership to the Sale Shares from the Vendor to the Purchaser or the suitability of the Purchaser as a shareholder of the Sale Subsidiary;
   2. the written approval from the Sale Subsidiary's financier for the change in the Sale Subsidiary's shareholding structure pursuant to the Proposed Disposal; and
   3. if applicable, the written waiver by any third parties of their rights of termination, if any, arising under the terms of any agreement entered into with the Sale Subsidiary,

provided that where the grant of any such consent, approval or waiver is subject to any condition, such condition shall be satisfactory to the Purchaser;

1. there being no material adverse change between the date of the SPA and the Completion Date; and

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1. 1. the representations and warranties of the Parties being true, accurate and correct in all material respects as if made on the Completion Date, with references to the then existing circumstances and the Parties having performed in all material respects of all his or its obligations under the SPA which are required to be performed on or before the Completion Date.
2. Completion
   Subject to the terms and conditions of the SPA, Completion shall take place on the date falling 5 business days after the date on which the last of the Conditions Precedent has been satisfied or waived, in any event not later than the Long-Stop Date, or such other date as the Parties may mutually agree in writing ("Completion Date"). "Long-StopDate" means 31 March 2022 (or such other date as the Parties may agree in writing.
3. Material conditions
   There are no material conditions including a put, call or other option attached to the Proposed Disposal.

1. SERVICE CONTRACTS
   No person is proposed to be appointed as a director of the Company in connection with the Proposed Disposal. Accordingly, no service contract is proposed to be entered into by the Company in connection with the Proposed Disposal.
2. RATIONALE FOR THE PROPOSED DISPOSAL
   The Sale Subsidiary has, over the past few years, faced increasing business challenges. Henceforth, the Company has been reviewing the business strategy of the Sale Subsidiary to ensure that it has higher growth levels. One key decision is to pivot towards supporting the growing wealth management industry in Asia, leveraging on the Group's trust and asset management services in addition to the usual incorporation and nominee services.
   With the acquisition of a stake in the Sale Subsidiary, the Purchaser can assist and add value to the growth of the Sale Subsidiary in Asia. In view of the above, the Board is of the view that the Proposed Disposal is in the interests of the Company and that the Proposed Disposal will benefit the Company's shareholders and other stakeholders alike.
3. USE OF PROCEEDS
   The estimated net proceeds from the Proposed Disposal attributable to the Company is RM9,600,000 ("Net Proceeds"). The Board intends to utilize the Net Proceeds for general working capital.
   Pending deployment, the Net Proceeds may be deposited with banks and/or financial institutions, invested in short-term money markets and/or marketable securities, or used for any other purposes on a short-term basis, as the Board may deem appropriate in the interests of the Group.

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1. OTHER FINANCIAL INFORMATION
   The key financials for the financial year ended 31 December 2020 and for the six months period ended 30 June 2021 of the Sale Subsidiary are as set out below:
   Profit and loss
   The net profit before tax of the Sale Subsidiary is RM743,174 for the financial year ended 31 December 2020 (audited) and RM398,816 for the financial period ended 30 June 2021 (unaudited) respectively.
   Financial position
   The net assets of the Sale Subsidiary is RM733,112 as at 31 December 2020 (audited) and RM1,122,183 as at 30 June 2021 (unaudited) respectively.
   The carrying book value of 49% of the Sale Subsidiary as at 31 December 2020 and 30 June 2021 is (RM0.3 million) and (RM0.1 million).
   Therefore, the gain on disposal of the Sale Subsidiary being the excess of the proceeds over the carrying book value of the Sale Subsidiary as at 31 December 2020 and 30 June 2021 is RM9.9 million and RM9.7 million accordingly.
2. RELATIVE FIGURES FOR THE PROPOSED DISPOSAL UNDER RULE 1006 OF THE CATALIST RULES
   The relative figures for the Proposed Disposal, computed on the bases set out in Rule 1006 of the Catalist Rules are set out below. The computations are based on (a) the latest announced consolidated financial statements for 30 June 2021 of the Group; and (b) unaudited financial statements as at 30 June 2021 of the Sale Subsidiary.

Rule	Bases	Relative
1006		Figures (%)
(a)	Net asset value of the Sale Subsidiary, compared with the Group's net asset	0.52(1)
	value
(b)	Net profits attributable to the Sale Subsidiary, compared with the Group's	8.63(2)
	net profits
(c)	Aggregate value of the consideration given compared with the market	12.64 (3)
	capitalisation of the Company
(d)	Number of equity securities issued by the Company as consideration for	Not
	the Proposed Disposal, compared with the number of equity securities	applicable
	previously in issue

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