The rating of BB- accorded to Olympia Industries Berhad’s (“OIB”) RM137,124,246 nominal value of Redeemable Unsecured Loan Stocks (“RULS”) reflects the risks associated with the implementation of the Group’s restructuring scheme. The rating carries a stable outlook.

OIB is involved in property development, property investment, construction, stock broking and lotteries/number forecast. It is a related company of Mycom Berhad (“Mycom”), a Main Board listed company on Bursa Malaysia which is also concurrently undergoing a restructuring exercise. OIB’s lotteries/number forecast business resumed operations at the end of 2001 upon renewal of its lotteries/number forecast license. Meanwhile, its stock broking arm subsidiary, Jupiter Securities Sdn Bhd (“JSSB”), has been trading with restrictions since October 1998.

The restructuring scheme involves, among others, a capital reduction; recapitalization via a rights and special issue exercise; and a debt restructuring. The debt restructuring in turn involves the issuance of the RULS and other debt instruments as settlement of OIB’s debt obligations. The restructuring scheme will also involve the divestment of OIB’s property related companies to Mycom as several of OIB’s subsidiaries holding land bank will be disposed to Mycom. Post restructuring, OIB Group’s core activities will focus on property investment, lotteries/number forecast and stock broking.

OIB’s property development projects, namely Bandar Sri Duta (“BSD”) and K-Residence will be financed from the proceeds of the restructuring scheme. BSD, the 42:58 joint venture mixed development project with Mycom, is strategically located near the upmarket area of Sri Hartamas and will target the higher end of the residential market. The K-Residence development on the other hand which is located in the vicinity of the KLCC, comprises a condominium tower and a service apartment tower. Tower 1 comprising condominiums, is currently under development. As at mid January 2007, 150 units of condominiums out of a total of 188 units of Tower 1 have been sold with total sales value of RM288 million. The successful completion of these projects will hinge on the restructuring scheme.

The Group has registered operating losses since 1998. OIB’s earnings then, which were mainly dependent on financial services, property development and investment activities were adversely affected due to JSSB’s trading restrictions, reduction in brokerage rates since September 2000 as well as the slowdown in the property and construction sectors. Future improvements in earnings performance and debt servicing ability are contingent on the successful implementation of development projects post-restructuring.