ND Paper Malaysia, a subsidiary of Nine Dragons Paper, enters two-year contract with Uzma LNG to supply liquefied natural gas to its factory in Banting; contract valued at estimated 70M Malaysian ringgit

Sample article from our Pulp & Paper Industry

March 31, 2023 (press release) –

1. Introduction

The Board of Directors of the Company wishes to announce that its 70%-owned subsidiary, Uzma LNG Sdn Bhd ("ULSB") had on 15th March 2023 entered into a LNG Supply Agreement with ND Paper Malaysia (Selangor) Sdn Bhd ("NDP") for the supply of Liquefied Natural Gas ("LNG") via a virtual pipeline to NDP ("Contract").

2. Information on NDP

NDP is a subsidiary of Nine Dragons Paper (Holding) Limited , a company listed on the Hong Kong Stock Exchange which was established in 1995 with headquarters in Dongguan City, Guangdong Province . It is the second largest paper manufacturing group worldwide in terms of production capacity and China 's leading paper producer. The Group has an annual design production capacity of approximately 18 million tones.

3. Salient Terms of the Contract

The salient terms of the Contract are as follows: -

(a) supply of LNG via a virtual pipeline to NDP at its factory in Banting ;

(b) the duration of the Contract is for a period of two (2) years commencing from 15th March 2023 until 14th March 2025 ("Contract Period"); and

(c) the value of the Contract is estimated to be in excess of Ringgit Malaysia Seventy Million ( RM70,000,000.00 ) for year 1 of the Contract subject to LNG supplied and the prevailing market price of LNG at the time of delivery.

The Contract is conditional upon the fulfilment of conditions precedent by NDP which was met on 30 March 2023 .

4. Risk Factors

Potential risk factors include project operational and execution risks, work schedules, delivery timelines and adverse weather conditions.

5. Financial Effects

The Contract is expected to contribute positively towards the earnings and net assets per share of the Company for the financial year ending 30 June 2023 and onwards until the expiry of the Contract.

6. Directors' and Major Shareholders' Interests

None of the Directors and/or major shareholders and/or persons connected with the Directors and/or major shareholders of Uzma has any direct or indirect interest in the Contract.

7. Directors' Statement

The Board of Directors of the Company, after considering all the relevant factors, is of the opinion that the acceptance of the Contract is in the best interest of the Company.

This announcement is dated 31 March 2023 .

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