On 5 October 2007, MARC had placed DRB-HICOM Berhad’s (“DRB-HICOM”) A+ID /MARC-1ID ratings on its Islamic Debt Securities on MARCWatch Developing in relation to its proposed acquisition of the operation and maintenance (O&M) operator of Tanjung Bin Power Plant, Rangkai Positif Sdn Bhd, and intended divestment of its financial services – related investments. MARC is issuing this MARCWatch Update pursuant to the recent announcement by the Group on 10 October 2007 that it had received Bank Negara Malaysia’s (“BNM”) approval on 9 October 2007 to commence negotiations with Bukhary Capital for the proposed acquisition of the latter’s 70% equity stake in Bank Muamalat Malaysia Berhad (“Bank Muamalat”).

MARC believes that the proposed acquisition of Bank Muamalat could potentially increase the Group’s business risk profile and pose integration challenges to the Group. The purchase consideration for the acquisition is expected to be wholly satisfied by the issuance of new DRB- HICOM shares. It is uncertain whether the acquisition will affect the group’s cash flow quality and place demand on its capital resources. Notwithstanding, the exposure of the BaIDs holders and noteholders to the intermediate term credit effects of this corporate initiative will be mitigated to some extent by the protective issue structure of DRB Hicom’s RM680.0 million Bai’ Bithaman Ajil Islamic Debt Securities (BaIDs) and the RM200 million Underwritten Murabahah CP/MTN facility of which RM150 million has been redeemed on 8 January 2007. These Islamic Securities are secured by a third party deed of assignment over sale proceeds of 140.0 million EON Cap shares. The proceeds from the sale of EON Cap shares will be deposited into a designated account for the purpose of redeeming the BaIDs.  Meanwhile, the RM120 million Murabahah CP/MTN is secured by land.

MARC will continue to monitor the above mentioned corporate initiatives and issue updates on material developments.