We refer to our announcement dated 20 November 1998 with regards to the Board of Directors’ decision on not extending the exercise period of AIC’s 9,203,002 warrants ("Warrants") from the existing period of 4 years and 6 months to 10 years.

The Directors’ decision of not extending the exercise period of the Warrants was made after taking into consideration the following factors :-

1. AIC Warrants has just been issued in May 1998 and thus, AIC Warrants still has an unexpired period of approximately 4 years which, in the opinion of the Directors is a reasonable period for AIC to achieve all of its projected earnings and barring unforseen circumstances, should increase the chance of Warrant holders to exercise the Warrants during the said period;
   
   
2. the proceeds from the exercise of the Warrants are intended to coincide with the expiry of AIC’s RM50 million nominal value of 2.5% redeemable unsecured bank guaranteed bonds 1998/2003 ("Bonds") so as to utilise part or all of the proceeds for the purpose of redemption of the Bonds, which expire in 2003. In this respect, the Directors are of the view that, without extension of the exercise period of the Warrants, the Warrant holders will be encouraged to exercise their Warrants during the exercise period if the Warrants are in the money and the proceeds therefrom can therefore be used to finance the redemption of the existing Bonds; and
   
   
3. the extension of the exercise period may constrain the issuance of new warrants in the future as the existing guidelines of the Securities Commision limit the number of outstanding warrants to 50% of a company’s issued share capital before the exercise of the Warrants.

On Behalf Of The Board
of AIC Corporation Berhad

CHEN HENG MUN
Company Secretary