SembCorp Industries to accept offer by Toll Holdings for its entire stake in SembCorp Logistics

March 6, 2006

SembCorp Industries (SembCorp) today announced that Toll Holdings Limited of Australia (Toll), through wholly-owned Toll (Asia) Pte. Ltd., had made a voluntary conditional cash offer (Offer) for all the shares of its subsidiary, SembCorp Logistics (SembLog), at a price of S$1.70 per share if the total acceptances received for the Offer is less than 90%; and S$1.80 per share if
the total acceptances received for the Offer is not less than 90%. The Offer is conditional upon Toll having received acceptances of more than 50% of the total SembLog shares. SembCorp owns approximately 60.01% of the total SembLog shares.

SembCorp has given an irrevocable undertaking to tender into the Offer by Toll. With a total of 440.7 million SembLog shares, SembCorp will receive a consideration of approximately S$749 million for its stake in SembLog if the final offer is S$1.70 per share; and S$793 million if the final offer is S$1.80 per share. At S$1.70 per share, the divestment will result in a net gain of about S$430 million in SembCorp’s Profit After Tax and Minority Interest (PATMI) for FY2006. Should the final offer be S$1.80 per share, SembCorp will record a net PATMI gain of about S$475 million.

SembCorp is of the view that the Offer from Toll would be value enhancing for its shareholders and beneficial for the long-term prospects of SembLog. Commenting on the transaction, Mr Peter Seah, Chairman of SembCorp, said: “SembCorp is committed to delivering and enhancing shareholder value on a sustainable basis over the long-term. This Offer gives SembCorp the opportunity to unlock significant value and will allow SembLog to benefit from Toll’s broad logistics platform.”

He added: “While the overall outlook and prospects of the logistics industry remain good and SembLog has a strong franchise and regional network in Asia, the industry has seen and will continue to see more convergence along the value chain and consolidation among players on a global scale. In view of this, we believe that SembLog will benefit from Toll’s financial and operational resources to support its strategic objectives.”

Mr Tang Kin Fei, Group President & CEO, said: “This transaction further streamlines SembCorp’s operating units and sharpens our strategic focus. With a smaller number of key business areas, our management expertise and capital will be better utilised, enabling us to maximise our operational results and financial returns.

“Our priority is to ensure the long-term growth of our core businesses through disciplined investment. Moving forward, the utilities and marine businesses will continue to be our key growth drivers.”

Citigroup Global Markets Singapore Pte Ltd acted as exclusive financial advisor to SembCorp Industries in relation to this transaction.