The Board of Directors of Sinwa Limited ("Sinwa") is pleased to announce that a conditional agreement (the "Agreement") has been signed today which will see Sinwa acquire (the "Acquisition") the entire issued and paid up share capital of Windsor Marine Pte Ltd ("Windsor Marine").


RATIONALE FOR THE ACQUISITION

Sinwa is a leading marine supply and logistics company in Singapore, with operations in the UAE, the PRC and Timor Leste. In line with the direction outlined at the time of its initial public offering, Sinwa intends to implement a growth strategy and to strengthen its position in key markets by way of acquisition.

Windsor Marine will be the first such acquisition. With a history of more than 25 years, Windsor Marine is a supplier of marine stores and equipment to marine vessels. It is the exclusive distributor of Wolf Safety Lamps, a high quality product widely used on board marine vessels and oil-rigs. In its most recent financial year ended 30 June 2004, Windsor Marine recorded turnover of S$ 8,123,678 on which it made earnings before interest and tax of S$ 55,978. As at 30 June 2004, Windsor Marine had net tangible assets S$1,136,932.

With this transaction, Sinwa broadens the range of products and services it will offer to its customers as well as allowing it the opportunity to supply the customers Windsor Marine has served so well to date. It is expected that the Acquisition will in time allow more cost-effective sourcing of materials and lead to cost savings from sharing common overheads.


KEY TERMS OF THE ACQUISITION

Consideration for the Acquisition is expected to be S$151,436. This represents a premium of S$30,000 over the expected net tangible assets of Windsor Marine (after excluding its cash balance of S$845,243 and certain inventory worth S$170,253). The Acquisition is conditional upon the completion of due diligence satisfactory to Sinwa. Given its relative size, the Acquisition will not require shareholders' approval under Chapter 10 of the Listing Manual. Completion is expected to be 30 days from the date of the agreement. Consideration will be paid in two equal tranches on the Completion Date and 3 months thereafter. Adjustments will be made to the second tranche based on actual unaudited net tangible assets held in Windsor Marine at the Completion Date. Consideration will be paid out of existing resources held by Sinwa.


FINANCIAL EFFECTS

The Acquisition is not expected to have a material effect on the net earnings per share or net tangible assets per share of Sinwa for FY2004.


INTERESTS OF DIRECTORS AND CONTROLLING SHAREHOLDERS

None of the directors or the controlling shareholders of Sinwa has any interest, direct or indirect in the Acquisition.

DOCUMENT FOR INSPECTION

A copy of the Agreement is available for inspection during normal business hours at the registered office of Sinwa at 28 Joo Koon Circle, Singapore 629057, for a period of 3 months from the date of this announcement.
 

About Sinwa Limited

With a history that dates back to the 1960s, Sinwa, a winner of EDB/Business Time's Enterprise 50 Awards in 1998, is today an established ISO 9001:2000-certified marine supply and logistics company servicing the oil and gas industry and sea-going vessels in Singapore, UAE, the PRC and Timor Leste.

Sinwa's core business is the supply of a wide range of ships' stores, provisions and equipment to ships and oil rigs, as well as providing their operators and owners with shipping agency and related services, such as supply, fabrication and installation of thermal insulations to LNG and chemical tankers, heating, ventilation and air-conditioning (HVAC), contract labour supply to oil-rigs and other projects.