MALAYSIAN AIRLINE SYSTEM BERHAD ("MAS" OR "COMPANY")

MALAYSIAN AIRLINE SYSTEM BERHAD (“MAS” OR “COMPANY”)

PROPOSED RENOUNCEABLE RIGHTS ISSUE ON THE BASIS OF ONE (1) ORDINARY
SHARE OF RM1.00 EACH IN MAS (“RIGHTS SHARE(S)”) FOR EVERY ONE (1) EXISTING
ORDINARY SHARE OF RM1.00 EACH IN MAS (“MAS SHARE(S)” OR “SHARE(S)”)



1.    INTRODUCTION

      On behalf of the Board of Directors of MAS (“Board”), Maybank Investment Bank Berhad
      (formerly known as Aseambankers Malaysia Berhad) (“Maybank IB”) and CIMB
      Investment Bank Berhad (“CIMB”) are pleased to announce that the Company proposes
      to undertake a renounceable rights issue on the basis of one (1) Rights Share for every
      one (1) existing Share held (“Proposed Rights Issue”).


2.    DETAILS OF THE PROPOSED RIGHTS ISSUE

      2.1    Particulars of the Proposed Rights Issue

             The Proposed Rights Issue entails the issuance of up to 1,905,962,767 Rights
             Shares on the basis of one (1) Rights Share for every one (1) existing MAS
             Share held on an entitlement date to be determined and announced later
             (“Entitlement Date”).

             The Rights Shares will be offered to the ordinary shareholders of MAS whose
             names appear in the Record of Depositors of the Company at the close of
             business at the Entitlement Date (“Entitled Shareholders”) after obtaining the
             approvals from all relevant authorities, the ordinary shareholders and RCPS
             holders of MAS.

             The maximum number of Rights Shares of 1,905,962,767 was arrived at based
             on the issued and paid-up ordinary share capital of MAS as at 30 November
             2009 of 1,671,078,120 MAS Shares and assuming full exercise of all outstanding
             132,153,745 options granted pursuant to MAS’ employees’ share option scheme
             (“MAS ESOS”) (“Outstanding ESOS Options”) as at 30 November 2009 and full
             conversion of 416,060,155 redeemable convertible preference shares of RM0.10
             each in MAS (“RCPS”) which are outstanding as at 30 November 2009
             (“Outstanding RCPS”), issued at RM1.00 per RCPS at the conversion price of
             RM4.05 for every new MAS Share prior to the Entitlement Date (“Maximum
             Scenario”).

             If none of the Outstanding ESOS Options and Outstanding RCPS are exercised
             and converted respectively prior to the Entitlement Date and there are no
             changes to the issued and paid-up ordinary share capital of MAS, the minimum
             number of Rights Shares to be issued is 1,671,078,120 (based on the issued and
             paid-up ordinary share capital of MAS as at 30 November 2009 of 1,671,078,120
             MAS Shares) (“Minimum Scenario”).

             The actual number of Rights Shares to be offered will only be determined on the
             Entitlement Date, based on the then issued and paid-up ordinary share capital,
             which takes into consideration the actual number of Outstanding ESOS Options
             exercised and/or Outstanding RCPS converted prior to the Entitlement Date.
The Proposed Rights Issue is renounceable in full or in part. Accordingly, the
      Entitled Shareholders can subscribe for and/or renounce their entitlements to the
      Rights Shares in full or in part. Any unsubscribed Rights Shares shall be offered
      to the other Entitled Shareholders and/or their renouncee(s) under the excess
      Rights Shares application. It is the intention of the Board to allocate the excess
      Rights Shares in a fair and equitable manner, and on a basis to be determined by
      the Board and announced later by the Company.

      An application will be made to Bursa Malaysia Securities Berhad (“Bursa
      Securities”) for the listing of and quotation for the Rights Shares on the Main
      Market of Bursa Securities.

2.2   Basis of Pricing the Rights Shares

      The Board has fixed the issue price at RM1.60 per Rights Share which
      represents a discount of about 48.6% from the five (5)-day volume weighted
      average market price (“VWAP”) of MAS Shares traded on Bursa Securities up to
      and including 21 December 2009, being the last market day prior to this
      Announcement of about RM3.11 per Share.

      It also represents a discount of about 32.1% to the theoretical ex-rights price of
      RM2.36 per MAS Share, based on the five (5)-day VWAP of MAS Shares as
      traded on Bursa Securities up to and including 21 December 2009 of about
      RM3.11 per Share. The issue price for the Rights Shares was arrived at after
      taking into consideration, among others, prevailing market conditions, market
      price of MAS Shares and recently announced rights issues.

      The discount on the Rights Shares is intended to reward shareholders of MAS for
      their continuous support to the Company.

2.3   Shareholders’ Irrevocable Undertakings and Underwriting Arrangement

      The Company has obtained written irrevocable undertakings from certain of its
      major shareholders (“Undertakings”) to subscribe in full or procure the
      subscription in full of their legal entitlements under the Proposed Rights Issue as
      follows:

      Major Shareholders        Existing shareholdings in      Rights Shares entitled
                                 MAS as at 30 November          under the Proposed
                                          2009                     Rights Issue
                                   No. of Shares        %        No. of Shares          %


      Penerbangan Malaysia
                                     868,957,232     52.00        868,957,232     52.00
      Berhad (“PMB”)
      Khazanah Nasional
                                     289,652,411     17.33        289,652,411     17.33
      Berhad (“Khazanah”)
                                   1,158,609,643     69.33      1,158, 609,643    69.33
As part of the Undertakings, Khazanah will also support an additional take-up of
      up to 32,713,040 Rights Shares, which represents up to 1.96% and 1.72% of the
      Proposed Rights Issue under the Minimum Scenario and Maximum Scenario
      respectively through an excess Rights Shares application (“Additional
      Undertaking”). The excess Rights Shares will be taken up by Khazanah to the
      extent they are not taken up or not validly taken up by the other Entitled
      Shareholders and/or their renouncee(s) under the Proposed Rights Issue.

      The Proposed Rights Issue will not be undertaken on a minimum subscription
      basis. Nevertheless, underwriting arrangements will be made by the Company
      for the remaining portion of the Rights Shares for which no irrevocable
      undertaking to subscribe has been obtained from the other ordinary shareholders
      of MAS. The said underwriting arrangements are expected to be in place prior to
      the implementation of the Proposed Rights Issue and the underwriting
      commission will be borne by the Company.

2.4   Ranking of the Rights Shares

      The Rights Shares shall, upon issue and allotment, rank equally in all respects
      with the existing MAS Shares, except that they shall not be entitled to any
      dividend, right, allotment and/or other distributions the entitlement date of which
      precedes the date of allotment and issue of the Rights Shares.

2.5   Adjustments to the Outstanding ESOS Options

      The Proposed Rights Issue will give rise to adjustments to the number of new
      MAS Shares relating to the Outstanding ESOS Options and subscription price of
      the Outstanding ESOS Options. Such adjustments will be made in accordance
      with the provisions of the by-laws governing MAS ESOS (“By-Laws”). The rights
      and obligations of the Outstanding ESOS Options holders will remain
      unchanged, save for the said adjustments.

      Such adjustments shall be effective on the next market day following the
      Entitlement Date.

2.6   Adjustments to the Outstanding RCPS

      As at 30 November 2009, the aggregate principal amount of the Outstanding
      RCPS is RM416,060,155, which is convertible into 102,730,902 new MAS
      Shares based on the existing conversion price of RM4.05 per MAS Share.

      Article 7(d)(iv) of MAS’ Articles of Association provides for adjustment to be
      made to the conversion price of the RCPS in the event of a rights issue involving
      ordinary shares, provided that any adjustment to the conversion price will be
      rounded to the nearest one (1) sen and in no event shall any adjustment involve
      a reduction of the conversion price below the par value of the MAS Shares for
      the time being. Such adjustment shall be at the determination of the Company.

      Such adjustments shall be effective on the next market day following the
      Entitlement Date.
2.7   Entitled Shareholders with Foreign Addresses

      The abridged prospectus and its accompanying documents or any other
      documents to be issued in connection with the Proposed Rights Issue are not
      intended to comply with the laws of any jurisdiction other than Malaysia and will
      not be lodged, registered or approved under applicable securities legislation of
      any foreign jurisdiction. Accordingly, the Proposed Rights Issue will not be
      offered for subscription in countries or jurisdictions other than Malaysia.

      The abridged prospectus and its accompanying documents or any other
      documents relating to the Proposed Rights Issue will not be sent to the ordinary
      shareholders who have not provided an address in Malaysia for the service of
      documents as at the Entitlement Date (“Foreign-Addressed Shareholders”).
      Foreign-Addressed Shareholders who wish to provide their addresses in
      Malaysia should inform their respective stockbrokers as well as the Company’s
      share registrar at Symphony Share Registrars Sdn Bhd, Level 26, Menara Multi-
      Purpose, Capital Square, No.8, Jalan Munshi Abdullah, 50100 Kuala Lumpur to
      effect the change of address prior to the Entitlement Date.

      Applicants may only exercise their rights in respect of the Proposed Rights Issue
      to the extent that it would be lawful to do so and the Company and/or its advisers
      would not be in breach of the laws of any jurisdictions to which the applicants
      may be subject to. The applicants shall be solely responsible to seek advice as to
      the laws of any jurisdiction which they may be subject to, and participation by the
      applicants in the Proposed Rights Issue shall be on the basis of a warranty by
      the applicants that they are allowed to do so lawfully without the Company and/or
      its advisers being in breach of the laws of any jurisdiction.

      Foreign-Addressed Shareholders who do not provide an address in Malaysia or
      who are not entitled to subscribe for the Rights Shares under the laws and
      jurisdictions to which they are subject to, will have no claims whatsoever against
      the Company and/or its advisers in respect of their rights entitlements or any net
      proceeds arising from the Proposed Rights Issue.

2.8   Implications of the Malaysian Code on Take-Overs & Mergers, 1998
      (“Code”)

      As at 30 November 2009, Khazanah and PMB, collectively have approximately
      69.33% equity interest in MAS. PMB is deemed as a party acting in concert with
      Khazanah, as PMB is a wholly-owned subsidiary of Khazanah.

      If the Undertakings and the Additional Undertaking are called upon, the collective
      shareholdings of Khazanah and PMB in MAS will increase from approximately
      69.33% to 70.31% under the Minimum Scenario.

      Practice Note 2.3 of the Code states that “where a group of persons acting in
      concert holds more than 50% of the voting shares of the offeree, no obligation
      under Part II of the Code will arise from any further acquisition by such persons
      acting in concert unless a single member in the group of persons acting in
      concert acquires voting shares sufficient to increase his holding to more than
      33% of the offeree or, if he holds more than 33% and less than 50%, acquires
      more than 2%, of the voting shares of the offeree in any 6 months period.”

      Based on the aforesaid, Khazanah and PMB will not be under any obligation to
      extend a mandatory offer under Section 6 of the Code for the remaining MAS
      Shares not owned by them upon the completion of the Proposed Rights Issue as
PMB’s existing equity interest in MAS is more than 50% and Khazanah’s
              individual holding will not be increased to more than 33% of the equity interest in
              MAS upon completion of the Proposed Rights Issue.

              However, under the Maximum Scenario, PMB’s equity interest in MAS of 52% as
              at 30 November 2009 is expected to reduce to 45.59% upon completion of the
              Proposed Rights Issue, as a result of which PMB will be bound by the provisions
              of the Code (in relation to any acquisition of more than 2% of MAS Shares in any
              6 months period) in the future. Nevertheless, whilst the Maximum Scenario
              indicates the theoretical maximum issue size of the Proposed Rights Issue, the
              Company believes that it is an improbable event as it is unlikely that the
              Outstanding ESOS Options and/or Outstanding RCPS will be fully exercised or
              converted (as the case may be) or at all before the Entitlement Date, given that
              they are currently out-of-the-money.

              Please refer to Section 5.3 of this Announcement for the effects on the
              substantial shareholders’ shareholdings in MAS arising from the Proposed Rights
              Issue.


3.   UTILISATION OF PROCEEDS

     The table below summarises the proposed utilisation of proceeds arising from the
     Proposed Rights Issue:

                                       Timeframe for           Minimum Scenario (1)         Maximum Scenario (2)
                                        utilisation of
                                         proceeds
                                                                            RM’ million                 RM’ million
      Acquisition of wide-body        Within 24 months                             500.0                          500.0
      aircraft (3)
                        (4)
      Working capital                 Within 24 months                           1,791.9                     2,164.2
      Repayment      of       bank    Within 24 months                             365.0                          365.0
      borrowings (5)
      Estimated expenses (6)           Within 3 months                               16.8                          20.3
      Total                                                                      2,673.7                     3,049.5

     Notes:

     (1)      For illustration purposes, the Minimum Scenario is arrived at based on the following assumptions:

                       none of the Outstanding ESOS Options and Outstanding RCPS will be exercised and
                        converted respectively prior to the Entitlement Date;

                       all the Rights Shares to be offered under the Proposed Rights Issue are fully taken-up;

                       the basis for the Proposed Rights Issue is one (1) Rights Share for every one (1) existing
                        MAS Share held at the Entitlement Date; and

                       an issue price of RM1.60 per Rights Share.

     (2)      For illustration purposes, the Maximum Scenario is arrived at based on the following assumptions:

                       all the Outstanding ESOS Options and Outstanding RCPS are fully exercised and
                        converted respectively prior to the Entitlement Date;

                       all the Rights Shares to be offered under the Proposed Rights Issue are fully taken-up;
         the basis for the Proposed Rights Issue is one (1) Rights Share for every one (1) existing
                       MAS Share held at the Entitlement Date; and

                      issue price of RM1.60 per Rights Share.

     (3)     The Company is presently contemplating the acquisition of up to 25 wide-body aircraft to replace the
             older aircraft of similar type in MAS’ fleet. The Company intends to use part of the funds raised from
             the Proposed Rights Issue to purchase the shortlisted aircraft from the manufacturer, particularly for
             the pre-delivery progressive payments:

     (4)     The Company intends to use part of the proceeds raised from the Proposed Rights Issue for general
             working capital purposes, including but not limited to general corporate purposes, aircraft lease
             rentals, fuel expenses, aircraft maintenance expenses, payments to creditors and other day-to-day
             expenses. Any differences in the actual expenses relating to the Proposed Rights Issue shall be
             adjusted to/from the working capital of MAS and its subsidiaries (“MAS Group”);

     (5)     The total borrowings of MAS Group as at 30 September 2009 is about RM1,772.9 million. The
             Company intends to use part of the proceeds raised from the Proposed Rights Issue to pare down
             some of their existing borrowings (including interest payable) of up to RM365.0 million. Based on the
             prevailing interest rate incurred by MAS of between 3% to 5.3% per annum, such repayment is
             expected to result in an interest saving of about RM12.6 million per annum; and

     (6)     The difference in the estimated expenses relating to the Proposed Rights Issue for the Minimum
             Scenario and the Maximum Scenario is mainly due to the estimated underwriting expenses. Any
             variation to the estimated expenses will result in an adjustment to the amount allocated to working
             capital purposes.



4.   RATIONALE OF THE PROPOSED RIGHTS ISSUE

     The Proposed Rights Issue is undertaken with the following objectives:

     (i)     to allow the Company to raise funds to support its fleet refreshment programme
             where the Company will be acquiring new aircraft and entering into new lease
             agreements for new aircraft to replace its existing ageing fleet. The Board’s
             strategy to move from 100% leasing to a part own, part lease business model will
             require more upfront cash although as a whole, buying of aircraft is typically more
             economical relative to leasing of aircraft. Proceeds raised from the Proposed
             Rights Issue will also be used for reinvestment and operational purposes;

     (ii)    to improve liquidity and financial flexibility as well as to optimise the MAS Group’s
             capital structure by strengthening its balance sheet and reducing its current
             gearing level. The repayment of some of MAS Group’s existing borrowings will
             also enable the Company to benefit from interest cost savings;

     (iii)   to enable MAS to raise funds through the offering of equity instrument to the
             ordinary shareholders of MAS on a pro-rata basis, which allows all ordinary
             shareholders of MAS to participate in the Proposed Rights Issue and hence
             mitigating dilution in equity interest PROVIDED THAT all Entitled Shareholders
             subscribe for their respective entitlements;

     (iv)    to provide the ordinary shareholders of MAS with an opportunity to subscribe for
             new Shares at a discount to the prevailing market price; and

     (v)     to enhance the marketability and liquidity of MAS Shares on the Main Market of
             Bursa Securities.

     After evaluating other funding options available and taking into consideration current
     market condition and MAS’ future funding plans, as well as reasons stated above, the
Board is of the view that the Proposed Rights Issue is currently the most appropriate
     avenue of fund raising for the Company as compared to other available options.


5.   EFFECTS OF THE PROPOSED RIGHTS ISSUE

     The effects of the Proposed Rights Issue on MAS’ issued and paid-up ordinary share
     capital, consolidated net assets (“NA”) and gearing, substantial shareholders’
     shareholdings, consolidated earnings and earnings per Share (“EPS”), and dividends
     based on the following scenarios and issue price of RM1.60 per Rights Share are as set
     out below:

     Minimum Scenario        This scenario assumes that none of the Outstanding ESOS
                             Options and Outstanding RCPS are exercised and converted
                             respectively prior to the Entitlement Date and all the Rights
                             Shares are fully taken-up

     Maximum Scenario        This scenario assumes that all the Outstanding ESOS Options
                             and Outstanding RCPS are fully exercised and converted
                             respectively prior to the Entitlement Date and all the Rights
                             Shares are fully taken-up


     5.1    Issued and Paid-up Ordinary Share Capital

            The proforma effects of the Proposed Rights Issue on the issued and paid-up
            ordinary share capital of MAS are set out in Table 1 of the Appendix of this
            Announcement.

     5.2    NA and Gearing

            Based on the latest audited consolidated balance sheet of MAS Group as at 31
            December 2008 and the latest unaudited consolidated quarterly results of MAS
            Group as at 30 September 2009 respectively; and on the assumption that the
            Proposed Rights Issue had been effected on the respective dates, the proforma
            effects of the Proposed Rights Issue on the consolidated NA, NA per Share and
            gearing of MAS Group are set out in Table 2 of the Appendix of this
            Announcement.

     5.3    Substantial Shareholders’ Shareholdings

            The proforma effects of the Proposed Rights Issue on the substantial
            shareholders’ shareholdings in MAS as at 30 November 2009 are set out in
            Table 3 of the Appendix of this Announcement.

     5.4    Earnings and EPS

            The Proposed Rights Issue is not expected to have a material effect on the
            earnings of the MAS Group for the financial year ending 31 December 2009 as
            the Proposed Rights Issue is envisaged to be completed by the first quarter of
            2010.

            Nevertheless, assuming that the net earnings of the MAS Group remain
            unchanged, the EPS of MAS will be proportionately reduced as a result of the
            increase in the number of MAS Shares upon issuance and allotment of the
            Rights Shares.
Barring unforeseen circumstances, the Proposed Rights Issue is expected to
             contribute positively to the future earnings of the MAS Group.

     5.5     Dividends

             The Company paid a total dividend of 2.50 sen per MAS Share (tax exempt),
             amounting to RM41,774,796 in respect of the financial year ended (“FYE”) 31
             December 2007 and there was no dividend declared for the FYE 31 December
             2008. The Proposed Rights Issue is not expected to affect the dividend policy of
             the Company.

             In any event, any declaration of dividends in the future will depend upon, among
             others, the cash reserves, retained earnings, financial performance and the
             funding requirements of the MAS Group.


6.   APPROVALS REQUIRED

     The Proposed Rights Issue is subject to the approvals being obtained from the following:

     (i)     Bursa Securities for the listing of and quotation for the Rights Shares on the Main
             Market of Bursa Securities;

     (ii)    the ordinary shareholders of MAS at an extraordinary general meeting (“EGM”) to
             be convened;

     (iii)   the holders of RCPS at an EGM to be convened; and

     (iv)    any other relevant regulatory authorities or parties, if required.

     The Proposed Rights Issue is not conditional upon any other proposals.


7.   DIRECTORS’,      MAJOR      SHAREHOLDERS’           AND/OR      CONNECTED      PERSONS’
     INTERESTS

     None of the Directors and major shareholders of MAS and/or persons connected to them
     have any interest, direct and indirect, in the Proposed Rights Issue other than their
     respective entitlements to the Rights Shares, for which all existing ordinary shareholders
     of MAS are also entitled to, including the right to apply for excess Rights Shares.


8.   STATEMENT BY DIRECTORS

     Having considered the current and prospective financial position as well as the capacity
     of the Company, the rationale and all other aspects of the Proposed Rights Issue, the
     Board is of the opinion that the Proposed Rights Issue is in the best interest of the
     Company.
9.    ADVISERS

      Maybank IB and CIMB have been appointed by MAS as the Joint Financial Advisers for
      the Proposed Rights Issue.


10.   TIMING OF SUBMISSION TO THE AUTHORITIES

      The Company expects to submit the application to the relevant authorities in respect of
      the Proposed Rights Issue within one (1) month from the date of this Announcement.


11.   ESTIMATED TIMEFRAME FOR COMPLETION

      Barring any unforeseen circumstances, the Board expects the Proposed Rights Issue to
      be completed by the first quarter of financial year ending 31 December 2010.


This Announcement is dated 22 December 2009.
Appendix

Minimum Scenario            This scenario assumes that none of the Outstanding ESOS Options and
                            Outstanding RCPS are exercised and converted respectively prior to the
                            Entitlement Date and all the Rights Shares are fully taken-up

Maximum Scenario            This scenario assumes that all the Outstanding ESOS Options and
                            Outstanding RCPS are fully exercised and converted respectively prior to the
                            Entitlement Date and all the Rights Shares are fully taken-up



TABLE 1: ISSUED AND PAID-UP ORDINARY SHARE CAPITAL

                                                     Minimum Scenario                      Maximum Scenario (e)
                                                No. of Shares                          No. of Shares
                                                        (’000)      RM’000                     (’000)      RM’000
 Existing ordinary share capital as at 30           1,671,078    1,671,078                 1,671,078     1,671,078
 November 2009 (a)
                                                                                            (c)
 Assuming full exercise of Outstanding                         -                  -           132,154             132,154
 ESOS Options
 Assuming full conversion of                                                                (d)
                                                               -                  -           102,731             102,731
 Outstanding RCPS
                                                     1,671,078          1,671,078           1,905,963           1,905,963
 To be issued pursuant to the Proposed
                                                     1,671,078          1,671,078           1,905,963           1,905,963
 Rights Issue (b)
 Enlarged issued and paid-up ordinary
                                                     3,342,156          3,342,156           3,811,926           3,811,926
 share capital

Notes:

(a)      MAS also has 500 redeemable preference shares of RM0.10 each (“RPS”), 1 special rights redeemable
         preference share of RM1.00 (“SRRPS”) and 416,060,155 RCPS in issue.

(b)      The holders of RPS, SRRPS, RCPS (save for the RCPS holders who convert their RCPS into new Shares at
         the conversion price of RM4.05 per MAS Share prior to the Entitlement Date) are not entitled to the Rights
         Shares.

(c)      Assuming 27,057,845 and 105,095,900 Outstanding ESOS Options granted are fully exercised at RM5.09 and
         RM3.71 per MAS Share respectively prior to the Entitlement Date.

(d)      Assuming all the Outstanding RCPS are fully converted into new 102,730,902 Shares at the conversion price of
         RM4.05 per MAS Share prior to the Entitlement Date.

(e)      Whilst the Maximum Scenario indicates the theoretical maximum issue size of the Proposed Rights Issue, the
         Company believes that it is an improbable event as it is unlikely that the Outstanding ESOS Options and/or
         Outstanding RCPS will be fully exercised or converted (as the case may be) or at all before the Entitlement
         Date, given that they are currently out-of-the-money.




                       [THE REST OF THIS PAGE IS INTENTIONALLY LEFT BLANK]
TABLE 2: NA AND GEARING

Minimum Scenario

                                                                                     (I)                        (II)
                                                                               (a)
                                                                              After the RCPS
                                                                        adjustments up to 30
                                                                      November 2009 and the
                                                                          Financial Reporting            After (I) and the
                                               Audited as at 31        Standards (“FRS”) 139                   Proposed
                                               December 2008                     adjustments                Rights Issue
                                                          RM’000                              RM’000                   RM’000
                                                                                       (c)                     (d)
 Share capital                                         1,671,002                            1,671,078            3,342,156
         (b)
 RCPS                                                      58,076                              58,076                  58,076
                                                                                       (c)                     (d)
 Share premium                                         4,007,446                            4,007,678            4,993,525
 Other reserves                                      (1,550,826)                           (5,502,852)         (5,502,852)
 Shareholders' funds/NA                                4,185,698                              233,980            2,890,905
 Intangible assets                                      (106,253)                            (106,253)               (106,253)
 Net tangible assets (“NTA”)                           4,079,445                              127,727            2,784,652


 NTA per Share (RM)                                           2.44                               0.08                    0.83
 NA per Share (RM)                                            2.50                               0.14                    0.86


 Total borrowings (RM'000) (b)                         1,418,988                       (c)
                                                                                            1,424,826            1,424,826
                         (e)
 Gearing ratio (times)                                        0.34                               6.09                    0.49

Notes:

(a)       Reflects the early adoption of FRS 139: Financial Instruments, Recognition and Measurement by the MAS
          Group on 1 January 2009. FRS 139 sets out the new requirements for the recognition and measurement of the
          MAS Group’s financial instruments. In accordance with the transitional provisions of FRS 139, the MAS Group
          is required to remeasure the financial assets and liabilities as appropriate. Any adjustment of the previous
          carrying amount of the financial assets and liabilities shall be recognised as an adjustment to the balance of
          retained profits at the beginning of the financial year in which FRS 139 is initially applied. Please refer to note
          (c) below for RCPS adjustments.

(b)       The RCPS are regarded as compound instruments, comprising a liability component and an equity component.
          At the date of issue, the fair value of the liability component is estimated by discounting the future contractual
          cash flows at the prevailing market interest rate available to the Company. The difference between the
          proceeds of issue of the RCPS and the fair value assigned to the liability component, representing the
          conversion option is accounted in the shareholders’ equity. The liability component is subsequently stated at
          amortised cost using the effective interest rate method until extinguished on conversion or redemption whilst the
          value of the equity component is not adjusted in subsequent periods except on exercise and conversion to MAS
          Shares. Under the effective interest rate method, the dividend expense on the liability component is calculated
          by applying the prevailing market interest rate. The difference between this amount and the dividend paid is
          added to the carrying value of the RCPS.

(c)       Adjustments based on the 307,800 RCPS surrendered which MAS had converted into 76,000 new Shares at
          the conversion price of RM4.05 per MAS Share and the other 699,600 RCPS surrendered which MAS had
          settled and paid in cash totalling RM517,856.14.

(d)       Based on the issue price of RM1.60 per Rights Share, after netting off estimated expenses in relation to the
          Proposed Rights Issue of RM16.8 million.

(e)       Comprising short term and long term borrowings of the MAS Group divided by shareholders’ funds.
Unaudited as at                         After the Proposed
                                                        30 September 2009                                 Rights Issue
                                                                      RM'000                                      RM'000
                                                                                                             (b)
 Share capital                                                      1,671,078                                   3,342,156
 RCPS (a)                                                              58,076                                      58,076
                                                                                                             (b)
 Share premium                                                      4,007,678                                   4,993,525
 Other reserves                                                   (5,613,697)                                 (5,613,697)
 Shareholders' funds/NA                                               123,135                                  2,780,060
 Intangible assets                                                  (104,095)                                  (104,095)
 NTA                                                                   19,040                                  2,675,965


 NTA per Share (RM)                                                       0.01                                          0.80
 NA per Share (RM)                                                        0.07                                          0.83

 Total borrowings (RM'000) (a)                                      1,772,933                                      1,772,933
 Gearing ratio (times)(c)                                               14.40                                           0.64

Notes:

(a)      The RCPS are regarded as compound instruments, comprising a liability component and an equity component.
         At the date of issue, the fair value of the liability component is estimated by discounting the future contractual
         cash flows at the prevailing market interest rate available to the Company. The difference between the
         proceeds of issue of the RCPS and the fair value assigned to the liability component, representing the
         conversion option is accounted in the shareholders’ equity. The liability component is subsequently stated at
         amortised cost using the effective interest rate method until extinguished on conversion or redemption whilst the
         value of the equity component is not adjusted in subsequent periods except on exercise and conversion to MAS
         Shares. Under the effective interest rate method, the dividend expense on the liability component is calculated
         by applying the prevailing market interest rate. The difference between this amount and the dividend paid is
         added to the carrying value of the RCPS.

(b)      Based on the issue price of RM1.60 per Rights Share, after netting off estimated expenses in relation to the
         Proposed Rights Issue of RM16.8 million.

(c)      Comprising short term and long term borrowings of the MAS Group divided by shareholders’ funds.
Maximum Scenario

                                                               (I)                            (II)                   (III)                 (IV)
                                                                                                             After (II) and
                                                        After the RCPS             After (I) and                        full           After (III)
                                                     adjustments up to           exercise of the            conversion of                   and
                                 Audited as at       30 November 2009                     entire                        the           Proposed
                                 31 December           and the FRS 139             Outstanding               Outstanding                 Rights
                                         2008            adjustments(a)          ESOS Options                        RCPS                 Issue
                                        RM'000                        RM’000                    RM’000                 RM’000              RM’000
                                                               (c)                      (d)                    (e)                  (f)
Share capital                        1,671,002                   1,671,078                1,803,232                 1,905,963         3,811,926
       (b)                                                                                                                    (e)
RCPS                                     58,076                        58,076                    58,076                         -                 -
                                                               (c)                      (d)                    (e)                  (f)
Share premium                        4,007,446                   4,007,678                4,479,356                  4,792,685            5,915,963
                                                                                  (d)                        (e)
Other reserves                      (1,550,826)                (5,502,852)              (5,579,054)            (5,564,528)          (5,564,528)
Shareholders' fund/NA                4,185,698                        233,980                   761,610              1,134,120            4,163,361
Intangible assets                     (106,253)                      (106,253)                (106,253)              (106,253)            (106,253)
NTA                                  4,079,445                        127,727                   655,357              1,027,867            4,057,108


NTA per Share (RM)                          2.44                         0.08                        0.36                    0.54              1.06
NA per Share (RM)                           2.50                         0.14                        0.42                    0.60              1.09

                                                               (c)                                            (e)
Total borrowings                     1,418,988                   1,424,826                    1,424,826              1,052,316            1,052,316
(RM'000) (b)
Gearing ratio (times) (g)                   0.34                         6.09                        1.87                    0.93              0.25

Notes:

(a)          Reflects the early adoption of FRS 139: Financial Instruments, Recognition and Measurement by the MAS
             Group on 1 January 2009. FRS 139 sets out the new requirements for the recognition and measurement of the
             MAS Group’s financial instruments. In accordance with the transitional provisions of FRS 139, the MAS Group
             is required to remeasure the financial assets and liabilities as appropriate. Any adjustment of the previous
             carrying amount of the financial assets and liabilities shall be recognised as an adjustment to the balance of
             retained profits at the beginning of the financial year in which FRS 139 is initially applied. Please refer to note
             (c) below for RCPS adjustments.

(b)          The RCPS are regarded as compound instruments, comprising a liability component and an equity component.
             At the date of issue, the fair value of the liability component is estimated by discounting the future contractual
             cash flows at the prevailing market interest rate available to the Company. The difference between the
             proceeds of issue of the RCPS and the fair value assigned to the liability component, representing the
             conversion option is accounted in the shareholders’ equity. The liability component is subsequently stated at
             amortised cost using the effective interest rate method until extinguished on conversion or redemption whilst the
             value of the equity component is not adjusted in subsequent periods except on exercise and conversion to MAS
             Shares. Under the effective interest rate method, the dividend expense on the liability component is calculated
             by applying the prevailing market interest rate. The difference between this amount and the dividend paid is
             added to the carrying value of the RCPS.

(c)          Adjustment based on the 307,800 RCPS surrendered which MAS had converted into 76,000 new Shares at the
             conversion price of RM4.05 per MAS Share and the other 699,600 RCPS surrendered which MAS had settled
             and paid in cash totalling RM517,856.14.

(d)          Assuming 27,057,845 and 105,095,900 Outstanding ESOS Options granted are fully exercised at RM5.09 and
             RM3.71 per MAS Share respectively prior to the Entitlement Date.

(e)          Assuming 416,060,155 Outstanding RCPS are fully converted into 102,730,902 new Shares at the conversion
             price of RM4.05 per MAS Share prior to the Entitlement Date.

(f)          Based on the issue price of RM1.60 per Rights Share, after netting off estimated expenses in relation to the
             Proposed Rights Issue of RM20.3 million.
(g)   Comprising short term and long term borrowings of the MAS Group divided by shareholders’ funds.
I                           II                          III
                                                                                        After (I) and full
                                                          After exercise of the        conversion of the             After (II) and
                              Unaudited as at 30          entire Outstanding             Outstanding               Proposed Rights
                               September 2009                ESOS Options                    RCPS                        Issue
                                          RM’000                            RM’000                   RM’000                    RM’000
                                                                      (b)                       (c)                       (d)
Share capital                           1,671,078                        1,803,232                 1,905,963                 3,811,926
RCPS(a)                                    58,076                            58,076                       (c)
                                                                                                             -                       -
                                                                      (b)                       (c)                       (d)
Share premium                           4,007,678                         4,488,019                4,801,349                 5,924,626
                                                                  (b)                        (c)
Other reserves                        (5,613,697)                      (5,698,562)              (5,666,476)                (5,666,476)
Shareholders'
funds/NA                                     123,135                       650,765                     1,040,836               4,070,076
Intangible assets                           (104,095)                     (104,095)                    (104,095)                (104,095)
NTA                                            19,040                      546,670                      936,741                3,965,981


NTA per Share (RM)                                0.01                         0.30                         0.49                    1.04
NA per Share (RM)                                 0.07                         0.36                         0.55                    1.07

Total borrowings
(RM'000)(a)                                1,772,933                      1,772,933           (a)(c)
                                                                                                   1,382,862                   1,382,862
Gearing ratio (times) (e)                      14.40                           2.72                     1.33                        0.34

Notes:

(a)      The RCPS are regarded as compound instruments, comprising a liability component and an equity component.
         At the date of issue, the fair value of the liability component is estimated by discounting the future contractual
         cash flows at the prevailing market interest rate available to the Company. The difference between the
         proceeds of issue of the RCPS and the fair value assigned to the liability component, representing the
         conversion option is accounted in the shareholders’ equity. The liability component is subsequently stated at
         amortised cost using the effective interest rate method until extinguished on conversion or redemption whilst the
         value of the equity component is not adjusted in subsequent periods except on exercise and conversion to MAS
         Shares. Under the effective interest rate method, the dividend expense on the liability component is calculated
         by applying the prevailing market interest rate. The difference between this amount and the dividend paid is
         added to the carrying value of the RCPS.

(b)      Assuming 27,057,845 and 105,095,900 Outstanding ESOS Options granted are fully exercised at RM5.09 and
         RM3.71 per MAS Share respectively prior to the Entitlement Date.

(c)      Assuming 416,060,155 Outstanding RCPS are fully converted into 102,730,902 new Shares at the conversion
         price of RM4.05 per MAS Share prior to the Entitlement Date.

(d)      Based on the issue price of RM1.60 per Rights Share, after netting off estimated expenses in relation to the
         Proposed Rights Issue of RM20.3 million.

(e)      Comprising short term and long term borrowings of the MAS Group divided by shareholders’ funds.
TABLE 3: SUBSTANTIAL SHAREHOLDERS’ SHAREHOLDINGS

Minimum Scenario

                                                                 As at 30 November 2009                                              After Proposed Rights Issue(b)

                                                           Direct                             Indirect                         Direct                         Indirect

                                               No. of Shares                       No. of Shares                    No. of Shares                   No. of Shares
                                                       (‘000)                %             (‘000)             %             (‘000)             %            (‘000)               %

  PMB                                                 868,957           52.00                      -           -         1,737,914          52.00                  -              -
                                                                                        (a)                              (c)                           (a)
  Khazanah                                            289,653           17.33             868,957         52.00            579,306          17.33        1,737,914           52.00
                                                                                                                                                                   -
  Employees Provident Fund Board                      226,155           13.53                      -           -           452,310          13.53                                 -
 (“EPF”)

 Skim Amanah Saham Bumiputera                           89,184            5.34                     -           -           178,368           5.34                  -              -
 (“ASB”)

Notes:

(a)      Khazanah is deemed interested by virtue of its shareholdings in PMB pursuant to Section 6A of the Companies Act, 1965 (“Act”).

(b)      Assuming all the Entitled Shareholders fully subscribe for their respective entitlements under the Proposed Rights Issue.

(c)      Has not taken into consideration the excess Rights Shares pursuant to Khazanah’s Additional Undertaking of up to 32,713,040, representing up to 1.96% of the Rights
         Shares to be issued under the Minimum Scenario. However, if Khazanah was successfully allotted the said excess Rights Shares in full, its direct shareholdings will increase
         to 18.31%.
Maximum Scenario

                                                                                   I                                                   II                                                                III

                     As at 30 November 2009                         After full exercise of the                       After (I) and full conversion                                                 After (II) and
                                                                                                        (b)                                                   (c)                                                           (d)
                                                                  Outstanding ESOS Options                               of the Outstanding RCPS                                           Proposed Rights Issue

                    Direct                   Indirect             Direct                      Indirect               Direct                         Indirect                              Direct                         Indirect
                  No. of                     No. of              No. of                       No. of                No. of                         No. of                                 No. of
                 Shares                     Shares              Shares                       Shares                Shares                         Shares                                 Shares                No. of Shares
                  ('000)        %            ('000)        %     ('000)       %               ('000)          %     ('000)        %                ('000)              %                  ('000)       %               ('000)             %
PMB             868,957      52.00                 -       -    868,957    48.19                    -          -   868,957     45.59                      -             -        1,737,914         45.59                          -       -
                                      (a)                                              (a)                                                  (a)                                    (e)                           (a)
Khazanah        289,653      17.33          868,957 52.00       289,653    16.06             868,957      48.19    361,172     18.95              868,957           45.59                722,344   18.95               1,737,914      45.59

EPF             226,155      13.53                 -       -    226,155    12.54                    -          -   238,405     12.51                      -             -                476,810   12.51                          -       -

ASB              89,184       5.34                 -       -     89,184     4.95                    -          -    93,953      4.93                      -             -                187,906     4.93                         -       -


Notes:

(a)      Khazanah is deemed interested by virtue of its shareholdings in PMB pursuant to Section 6A of the Act.

(b)      None of the substantial shareholders of MAS are entitled to the Outstanding ESOS Options and assuming all the Outstanding ESOS Options are exercised prior to the
         Entitlement Date.

(c)      The table below reflects MAS substantial shareholders’ holdings in RCPS as at 30 November 2009 and assuming all the RCPS holders converted their RCPS into new
         Shares at the conversion price of RM4.05 per MAS Share prior to the Entitlement Date.


                                                               As at 30 November 2009                                                        Additional new Shares after full conversion of the RCPS

                                                  Direct                                                Indirect                                          Direct                                               Indirect

                               No. of RCPS (‘000)                 %            No. of RCPS (‘000)                   %             No. of Shares ('000)                       %               No. of Shares ('000)                     %

         Khazanah                    289,653                     69.62                         -                     -                        71,519                        3.75                        -                             -
                                                                                                -                                                                                                       -
         EPF                         49,614                      11.92                                               -                        12,250                        0.64                                                      -

         ASB                         19,316                      4.64                          -                     -                            4,769                     0.25                        -                             -
(d)   Assuming all the Entitled Shareholders fully subscribe for their respective entitlements under the Proposed Rights Issue.

(e)   Has not taken into consideration the excess Right Shares pursuant to Khazanah’s Additional Undertaking of up to 32,713,040 Right Shares, representing up to 1.72% of the
      Rights Shares to be issued under the Maximum Scenario. However, if Khazanah was successfully allotted the said excess Rights Shares in full, its direct shareholdings will
      increase to 19.81%.




                                                   [THE REST OF THIS PAGE IS INTENTIONALLY LEFT BLANK]
Next part ... Cancel