Company Announcements

1. INTRODUCTION

The Board of Directors of Hengyuan Refining Company Berhad (“Company”) wishes to announce that it has approved the full fund release of USD 26.61 million for the Euro 5 Gasoil Project (“Project”) to be executed within its refining complex in Port Dickson.

The Project is one of the three regulatory-driven investments that have been outlined in the Company’s strategy to continue to operate as a refinery and to remain competitive within the industry. The other two regulatory-driven investments are production of Euro 4 Mogas and compliance with the Clean Air Regulations which were announced previously.

The Project is undertaken to revamp the existing Hydro Desulfurization Unit No 2 to meet the 10 ppmw sulphur specification by September 2020 and to re-instate the unit capacity to 6,300 tonnes per day.

The main purpose for the full fund release is to enable the Company to produce Euro 5 gasoil with reasonable unit shutdown intervals at the lowest possible capex commitment.

2. FINANCIAL INTEREST

The Project will be financed using a mix of cash flow generated from operations and drawdowns on the existing borrowing facilities.

3. DIRECTORS’ AND SUBSTANTIAL SHAREHOLDERS’ INTEREST

None of the directors or substantial shareholders of Company or persons connected with them have any interest, whether direct or indirect, in the full fund release.

4. STATEMENT BY DIRECTORS

The Company’s Board of Directors is of the opinion that the above full fund release decision is in the ordinary course of business and is in the best interest of the Company.

5. APPROVALS REQUIRED

This investment decision is not subject to the approval of shareholders of Company or any relevant authorities.

This announcement is dated 5th July 2019.