We refer to our earlier announcements dated 16 September 2005 and 30 September 2005.

The Board of Directors of Boustead wishes to announce that the Company had on 2 December 2005 agreed with Limaran to terminate the sale and purchase agreement dated 16 September 2005 ("SPA") and the supplemental agreement dated 28 October 2005 ("Supplemental SPA"), both for the purchase by Boustead from Limaran of the 40 million PSC-ND Shares.

Further, the Company had on 2 December 2005 entered into a conditional share sale agreement ("SSA") with Siti Roswani binti Mohd and Salmah binti Jusoh (collectively the "Vendors") to acquire the entire equity interest in Limaran comprising 2 ordinary shares of RM1.00 each for a cash consideration of RM2.

On 2 December 2005, Boustead had entered into a Deed of Mutual Termination with Limaran to terminate the SPA and the Supplemental SPA. Pursuant to the said deed, the SPA and the Supplemental SPA shall be terminated and be of no further effect as at the date of the deed and neither party shall have any claims whatsoever against the other arising out of or in connection with the SPA and/or the Supplemental SPA.

Boustead had also entered into another Deed of Mutual Termination with Limaran and HSBC (Malaysia) Trustee Berhad (as the Escrow Agent) to terminate the escrow arrangements in relation to the SPA.

On 2 December 2005, Boustead had entered into the conditional SSA with the Vendors to acquire the entire equity interest in Limaran comprising 2 ordinary shares of RM1.00 each ("Limaran Shares") for a nominal cash consideration of RM2 on a willing buyer willing seller basis, payable upon completion.

The Limaran Shares are acquired free from all liens charges, equities and encumbrances and together with all rights now or hereafter attaching thereto.

The sale and purchase of the Limaran Shares was on the basis that Limaran has purchased the term loan amounting to USD31,578,947 granted by Credit Suisse First Boston (Labuan Branch) ("CSFB") to Perstim Industries Berhad ("Term Loan"), pursuant to several agreements between Limaran and CSFB ("Term Loan Purchase Agreements").

CSFB had on 11 June 2002 granted a Term Loan of USD31,578,947 to Perstim Industries Sdn Bhd that is secured, inter alia against 40 million PSC-ND Shares.

Pursuant to the SSA, Boustead will pay to CSFB a cash consideration for the Term Loan ("Term Loan Consideration") pursuant to the Term Loan Purchase Agreements.

The Term Loan Consideration was arrived at based on the principal amount of the Term Loan of USD31,578,947 and the accrued interest thereon as at the date of payment of the Term Loan Consideration. Assuming an exchange rate of RM3.79 to USD1, the RM equivalent of the principal amount is RM119,684,209.

Following the SSA and towards the services rendered by HPA Inc to Limaran in successfully procuring the sale of the Term Loan by CSFB to Limaran (vide the Term Loan Purchase Agreements), Boustead will also pay to the solicitors of HPA Inc an agreed fee (inclusive of tax) of -

whichever is higher ("Agreed Fee"). Assuming an exchange rate of RM3.79 to USD1 and assuming the Agreed Fee is USD11,086,468.23, the RM equivalent of the Agreed Fee is RM42,017,715.

Save as disclosed above, there were no other liabilities to be assumed or to be paid by Boustead arising from the Acquisition of Limaran.

The SSA is conditional upon the following: -

Boustead will finance the Term Loan Consideration and the Agreed Fee entirely from bank borrowings.

Limaran was incorporated in Malaysia under the Companies Act, 1965 on 21 July 2005 and is principally an investment holding company.

The current authorised share capital of Limaran is RM100,000 divided into 100,000 ordinary shares of RM1.00 each of which 2 shares have been issued as fully paid up.

The registered shareholdings of the Directors/ Vendors in Limaran are as follows.

Directors/ Vendors	No. of shares	%
Siti Rosmawi binti Mohd	1	50%
Salmah binti Jusoh	1	50%
	2	100%

Limaran's sole asset is its beneficial interest in the Term Loan pursuant to Term Loan Purchase Agreements.

PSC-ND was incorporated in Malaysia under the Companies Act, 1965 on 13 June 1990 and is principally involved in shipbuilding and repairs. The current issued and paid-up share capital of PSC-ND is RM130,000,003 comprising 130,000,002 ordinary shares of RM1.00 each and one special share held by MOFInc.

PSC-ND has an existing Offshore Patrol Vessel Project with the Government of Malaysia to design, construct and deliver 6 Offshore Patrol Vessels ("OPV") together with integrated logistics support and commercial package programme for the Royal Malaysian Navy, valued at RM5.35 billion ("OPV Contract").

Based on the latest available audited financial statements of PSC-ND for the year ended 31 December 2004, the consolidated net assets were approximately RM417.9 million and the consolidated loss after tax was approximately RM423.5 million.

Based on information made available to Boustead, the information on HPA Inc is as follows.

HPA Inc is a corporation incorporated in the Republic of Panama, which in turn is controlled by High View Point Partners LLC, incorporated in Delaware, USA and having offices in New York, USA and South America. High View Point Partners LLC is a US based fund manager managing funds of approximately USD250 million.

The Acquisition of Limaran and payment for the Term Loan would enable Boustead to gain the legal and beneficial interest to the 40 million PSC-ND Shares representing a direct interest of approximately 30% in the company.

This Acquisition of Limaran is thus of strategic importance to Boustead as control of the PSC-ND Shares is of critical significance given PSC-ND's obligation to fully complete the construction and delivery of the OPVs to the Ministry of Defence pursuant to the OPV Contract, as well as in view of the long term prospects of PSC-ND.

5.1 On share capital and substantial shareholders' shareholdings 5.2 On earnings

5.3 On net assets

The long-term prospects of PSC-ND are closely linked to its existing OPV Contact valued at RM5.35 billion and the potential contract for additional OPVs.

PSC-ND is subjected to certain risks inherent in the shipbuilding industry including shortages of labour and raw materials, rapid changes in construction technology and increases in the costs of labour and raw materials. Material changes in political, economic and credit condition as well as the contractual risk of the OPV Contract not progressing may also adversely affect PSC-ND and its future performance.

Nonetheless, PSC-ND will continuously endeavour to complete the OPV Contract within the specifications and time stipulated. Further, the strengthening of the local currency and the strategic and national importance of the OPV Contract would mitigate the risk factors.

To the best of the knowledge of the Board of Directors, none of the Directors or substantial shareholders and/or persons connected to them had any interest, direct and/or indirect in the Acquisition of Limaran.

The Board of Directors of Boustead, having considered all aspects and the long-term justifications of the Acquisition of Limaran is of the opinion that the transaction is in the best interest of the Company and the shareholders.

The Acquisition of Limaran is not subject to the approval of the Securities Commission ("SC") and does not fall under the SC's Policies and Guidelines on Issue/Offer of Securities.

The two Deeds of Mutual Termination and the SSA are available for inspection at the registered office of Boustead during office hours from Mondays to Fridays (except for public holidays) at 28th Floor, Menara Boustead, 69, Jalan Raja Chulan, 50200 Kuala Lumpur, for the time being, for the period of two (2) weeks from the date of this announcement.