MARC has placed DRB-HICOM Berhad’s (“DRB-HICOM or the Group”) A+ID /MARC-1ID ratings on its Islamic Debt Securities on MARCWatch Developing following recent announcements made by the Group in relation to its proposed acquisition of Rangkai Positif Sdn Bhd (“Rangkai Positif”) and intended divestment of its financial services-related investments.

The MARCWatch placement is pending an assessment of the impact of the proposed acquisition and divestments on the overall profitability, cash generation capacity and capitalisation. On the surface, there are indications of potential for some strengthening of DRB-HICOM’s financial profile. There is no definite timeline for the completion of the divestments as yet, but MARC expects the acquisition and divestment will not have a material impact on the Group’s financial performance for 2007.

The Group announced on September 21, 2007, its proposed acquisition of privately held Rangkai Positif, the operation and maintenance (“O&M”) operator of the 2,100 MW coal-fired Tanjung Bin Power Plant. The RM720.0 million purchase consideration is expected to be wholly satisfied by the issuance of new DRB-HICOM shares. Execution of the sale agreement is expected by end 2007. Positive aspects of the proposed acquisition are the prospect of recurrent earnings and improved earnings diversity. More importantly, the acquisition will not be depletive to the Group’s cash position nor negatively impact its capital structure.

DRB-HICOM has also announced the potential divestment of its 20.2% equity interest in EON Capital Berhad (“EONCap”), the country’s third smallest banking group in terms of assets. More recently, it has also submitted an application to Bank Negara Malaysia (“BNM”) to seek the BNM’s approval to commence negotiations with interested parties on the proposed divestment of its investments in insurance entities. MARC believes that the proposed divestments can potentially free up capital resources at DRB-HICOM with the proceeds used to reduce debt at the Group and enable the Group to focus on its core strategic operations.

MARC will closely monitor the developments and will review its impact on the Group’s current ratings upon completion of the respective acquisition and/or divestments. Any ratings implications arising therefrom will be advised in due course. MARC expects to complete its annual rating review in the next several weeks, following which MARC expects to resolve the MARCWatch Developing placement.