TIMAH RESOURCES LIMITED — Capital/Financing Update 2020

Aug 6, 2020

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ASX ANNOUNCEMENT

7 August 2020

Market Update: Internal Restructuring

Timah Resources Limited (Timah) wishes to advise its shareholders of the progress of matters arising from the holding of an Extraordinary General Meeting (EGM) on 15 July 2020.

At that meeting Timah shareholders approved, “a new issue of shares in Mistral Engineering Sdn. Bhd. totalling 9,627,552 at a value of RM1.64 to Cash Nexus (M) Sdn. Bhd. in consideration for the conversion of a portion of a debt owed by the company’s subsidiary, Mistral Engineering Sdn. Bhd. to Cepatwawasan Group Berhad (CGB) in the amount of RM15,803,627.”

Timah has been advised by the Board of Directors of CGB that it has now finalised an internal restructuring exercise to increase its effective interest in Mistral Engineering Sdn. Bhd. ( Mistral) from 62.71% to 81.73%.

Upon completion of this internal restructuring, the new ownership structure of Mistral is now 51% owned by Cash Nexus and 49% owned by Timah.

This ownership restructuring was required to be undertaken so as to be fully compliant with SEDA’s requirements for Mistral to participate in the Feed-in-Tariff (FiT) scheme which precluded foreign persons from owning more than 49% of voting power or issued shares.

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Without this restructuring the income flow to Mistral would have reduced to such an extent as to render its business model unviable. A consequence of this restructuring also results in yearly interest savings to Mistral of RM850,212 as a result of its reduction in debt to CGB of RM15,803,627.

The new structure of Timah’s ownership of Mistral can be diagrammatically represented in the following manner.

2. RATIONALE OF THE INTERNAL RESTRUCTURING

The Internal Restructuring is undertaken in order to be fully compliant with SEDA’s req

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We will keep the market fully informed on any further developments .

Yours faithfully,

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Andrew Wallis Company Secretary

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