News

Memorandum Of Understanding Between QL Resources Berhad And Sojitz Corporation

Type	:	Announcement
Subject	:	MEMORANDUM OF UNDERSTANDING BETWEEN QL RESOURCES BERHAD AND SOJITZ CORPORATION

Contents :

We are pleased to announce that QL Resources Berhad ("QLR") has on 13 April, 2007, signed a memorandum of understanding (MOU) with Sojitz Corporation of Japan ("Sojitz") to signify their mutual intent to enter into a joint venture arrangement upon the terms to be agreed by the parties (Proposed JV).



2. RATIONALE


The Proposed JV is synergistic to QL's core business of Crude Palm Oil related activities. The MOU sets out the non-binding understanding between QLR and Sojitz to explore the feasibility of the palm based bio diesel project including the transfer of QLR's existing palm oil business assets to the joint venture company to be established between QLR and Sojitz ("Project") and Sojitz participation in the Project.


3. DETAILS OF THE MOU

3.1 Information on Sojitz

Sojitz is a company organized and existing under the laws of Japan. It is a Japan's major trading house listed in Tokyo Stock Exchange Market having its group turnover of US$ 42.5 billion in financial year 2006 and is proactive in developing biofuels business around the world.


3.2 Scope of the MOU

(a) The objectives of this MOU are:
(i) to evaluate QLR's existing palm oil business assets and jointly commission a feasibility study;
(ii) to develop the proposed business plan for the project;
(iii) to develop a bio diesel fuel sales and marketing plan for the project that will be implemented by Sojitz in overseas markets;
(v) to negotiate definitive agreements for the Project including for example, a Joint Venture Agreement and Biodiesel Marketing Agreement.

(b) Proposed Participating Interests of the parties
It is the mutual understanding of the parties that QLR will hold majority of the total issued share capital of the proposed joint venture company that will be established in Malaysia.

(c) The MOU shall terminate upon the earlier of:
(i) the parties entering into commercial arrangements including, but not limited to a Joint Venture Agreement and a Marketing and Sales Agreement;
(ii) either parties decided not to implement or participate in the Project; or
(ii) 150 days from the date of MOU unless extended by the mutual agreement of the parties.


4. EFFECTS OF THE MOU

4.1 Share Capital

The MOU is not expected to have a material effect on QLR's share capital for the financial year ending March 31, 2008.

4.2 NTA

The MOU is not expected to have a material effect on QLR's NTA for the financial year ending March 31, 2008.

4.3 Earnings

The MOU is not expected to have a material effect on QLR's earnings for the financial year ending March 31, 2008.

4.4 Substantial Shareholders' Shareholdings

The MOU will have no effect on the shareholdings of the substantial shareholders of QLR.


5. MAJOR SHAREHOLDERS AND DIRECTORS' INTERESTS

None of the substantial shareholders and directors of QLR or any persons connected to them has any interest, whether direct or indirect, in the MOU.


6. STATEMENT BY BOARD OF DIRECTORS

After having considered all aspects of the MOU, the Board of Directors of QLR, is of the opinion that the Proposed JV is in the best interest of QLR.


7. COMPLIANCE WITH THE SECURITIES COMMISSION'S POLICIES AND GUIDELINES ON ISSUE/OFFER OF SECURITIES

The MOU is not subject to the approval of the Securities Commission ("SC") and does not fall under the SC's Policies and Guidelines on Issues/Offer of Securities or any amendments thereof (the "Policies and Guidelines").

Therefore, to the best knowledge of QLR, the Proposed JV has not departed from the Policies and Guidelines.


8. RISK FACTORS

The MOU is subject to normal business risks.


9. APPROVALS REQUIRED

The MOU is not subject to the approval of the shareholders of the Company.

10. DOCUMENT AVAILABLE FOR INSPECTION

A copy of the MOU is available for inspection at the registered office at No.16A, Jalan Astaka U8/83, Bukit Jelutong, 40150 Shah Alam from 8.30 a.m. to 5.00 p.m. on any working day for a period of 14 days from the date of this announcement.


This announcement is dated April 13, 2007