Reference is made to the Company's announcements on 23 April 2026 and 27 April 2026 on the Proposed Settlement Agreement ("Announcements"). Unless otherwise defined, the definitions set out in the Announcements shall apply herein.
The Board of the Company wishes to announce that PCI has on 19 May 2026, through its appointed solicitors, issued a letter to PDM to terminate the Settlement Agreement with immediate effect, for any one or combination of any of the following reasons:-
(a) PCI has discovered the fact that an individual with indirect interests in PDM and person(s) connected to that individual, while being the major shareholder of PRG, would render the Settlement Agreement a related party transaction, a fact not previously disclosed by PDM during the stage of negotiation and execution of the Settlement Agreement. While the Company was evaluating the regulatory compliance procedures required under the Listing Requirements resulting from this undisclosed related party transaction relationship, subsequent events of default by PDM ensued.
(b) Subsequently, on 8 May 2026, after the Settlement Agreement was executed, PDM issued a letter to PCI ("PDM's Letter") and informed that "it was unable to perform the obligations in the Settlement Agreement". It has also failed to make the necessary payment(s) pursuant to the Settlement Agreement.
(c) By virtue of its letter, PDM has unequivocally renunciated its contractual obligations under the Settlement Agreement. In failing to perform its contractual obligations, PDM has also wrongfully and materially breached the Settlement Agreement, including its covenants, undertakings and obligations stipulated in the same.
(d) From PDM's Letter, it appears that PDM has failed to disclose the court judgment obtained against it, which has affected its position to perform the contractual obligations under the Settlement Agreement.
Following the termination of the Settlement Agreement, PCI has demanded for the payment of the Indebted Sum within fourteen (14) days from the date of termination, and will take necessary steps it deems appropriate, including initiating legal proceedings in order to recover the same. PCI reserves all its rights in full.
The termination of the Settlement Agreement will not have any effect on the share capital and substantial shareholders' shareholding of the Company, and is not expected to have any material effect on the earnings per share, net assets per share as well as gearing of the Company for the financial year ending 31 December 2026. However, in the event that there is no recovery of the outstanding indebted amount due from PDM, the Group may be required to recognise an impairment loss of approximately RM13.7 million, which is expected to have a corresponding negative impact on the EPS and net assets per share of the Group and there is not expected to be any impact on the gearing ratio of the Group for the year ending 31 December 2026.
The Board, having considered all aspects, is of the opinion that the termination of the Settlement Agreement is in the best interest of the Group.
This announcement is dated 19 May 2026.