1. INTRODUCTION

Further to the announcement made by SILK Holdings Berhad (“SHB”) on 31 October 2014 with regards to the acquisition of two (2) units of 70 meter Anchor Handling Tug Supply Vessels (“AHTSV”) from Muhibbah Marine Engineering Sdn Bhd (“MME”), the Board of Directors (“Board”) of SHB would like to announce that Jasa Merin (Malaysia) Sdn Bhd ("Jasa Merin"), a 70%-owned subsidiary of AQL Aman Sdn. Bhd. (“AQL”) which in turn a wholly-owned subsidiary of SHB  had on 21 November 2014 entered into a financing arrangement with Affin Bank Berhad (“Affin Bank”) for additional facilities totaling RM99,000,000.

2. DETAILS OF THE BANKING FACILITIES

3. SECURITY

i. SHB and AQL had on 21 November 2014 entered into separate Corporate Guarantee agreement favouring Affin Bank for a total of RM434,031,440 as security for the facilities granted to Jasa Merin totaling RM99,000,000 above, as well as the outstanding liabilities of existing facilities totaling RM335,031,440.

ii. The aforesaid Corporate Guarantee is provided by AQL as the direct corporate shareholder of Jasa Merin

iii. A Corporate Guarantee is also being provided by SHB as the ultimate corporate shareholder of Jasa Merin.

The provision of the Corporate Guarantee by both SHB and AQL was upon the request of Affin Bank for the granting of facilities to Jasa Merin. As such, the Corporate Guarantee is necessary to facilitate the ordinary course of business of Jasa Merin.

In view of the execution of the new Corporate Guarantee, Affin Bank has also rescinded/cancelled the previous Corporate Guarantee executed by SHB in favour of Affin Bank dated 5 February 2014, that was previously announced by the Company on 6 February 2014.

4. FINANCIAL IMPACT OF THE BORROWING

The acceptance of the facility will not have any material effect on the net assets, earnings per share and has no effect on the share capital and Major Shareholders’ shareholding of the Group for the financial year ending 31 July 2015.

5. DIRECTORS’ AND MAJOR SHAREHOLDERS’ INTERESTS

None of the Directors or major shareholders or persons connected to the Directors or major shareholders has any direct or indirect interest in the facility.

6. DIRECTORS’ STATEMENT

The Board of SILK is of the opinion the provision of the Corporate Guarantee is in the best interest of SHB Group.