Contents :

(i) proposed acquisition by KKB of all that piece of leasehold land known as Lot No. 777, situated at Block 5, Muara Tebas Land District, Sejingkat, Kuching, measuring approximately 27.6 hectares, with the lease expiring in 2058, together with the buildings erected thereon used as office premises and steel factory ("Land") from a subsidiary of CMS ("Proposed Acquisition"); and

(ii) proposed strategic alliance between KKB and CMS to undertake steel fabrication activities in the oil & gas, shipping and marine sectors ("Proposed Strategic Alliance").

The salient terms of the MOU include, amongst others, are as follows:-

(a) The MOU is valid for a period of 3 months from date of the MOU or such further period(s) as may be mutually agreed by both parties ("Exclusivity Period").

(b) (i) During the Exclusivity Period, parties shall negotiate with each other for the entry into a Sale & Purchase Agreement for the Proposed Acquisition which will be conditional upon where applicable, amongst others, the approval of KKB's shareholders and all relevant regulatory, governmental or other authorities including (without limitation) the Securities Commission, Foreign Investment Committee and Bursa Malaysia Securities Berhad ("Bursa Securities").

(ii) Formulating and finalizing the framework for the Proposed Strategic Alliance.

(iii) The consideration of the Proposed Acquisition by KKB is proposed to be satisfied via the issuance of new KKB shares, or any other mode to be mutually agreed upon between KKB and CMS.

None of the Directors, major shareholders and persons connected with them has any interest in the above MOU. The Board is of the opinion that the above MOU is in the best interest of KKB and its group of companies.

A more detailed announcement will be released upon signing of the definitive agreement.

This announcement is dated 30 July 2007.