PRESS RELEASE   
FOR IMMEDIATE RELEASE
05 November 1999

The Kuala Lumpur Stock Exchange
Exchange Square
Bukit Kewangan
50200 Kuala Lumpur.

"QUOTE

Subject :

AIC CORPORATION BERHAD ("AIC" OR "THE COMPANY")
PROPOSED INTERNAL RESTRUCTURING AND ESTABLISHMENT OF ELECTRONICS DIVISION

Contents :-

1. INTRODUCTION

On behalf of the Board of Directors of AIC, we are pleased to announce that on 5 November 1999, the Company entered into the following internal restructuring agreements:-

1) Share Sale Agreement ("SSA") between AIC and AIC Inspirasi Sdn Bhd ("AICI"), a wholly-owned subsidiary of AIC, for the disposal by AIC of 1,000,000 ordinary shares of RM1.00 each representing AIC's entire 100% equity interest in Autovisor Plastics Sdn Bhd ("AVP") to AICI for a cash consideration of approximately RM2,827,575 being the amount equivalent to the net tangible asset value of AVP as at 30 September 1999.

2) Share Sale Agreement ("SSA") between AIC and AICI for the disposal by AIC of 2,455,826 ordinary shares of RM1.00 each representing AIC's entire 100% equity interest in Custom Tooling Holdings Sdn Bhd ("CTH") to AICI for a cash consideration of approximately RM4,992,366 being the amount equivalent to the consolidated net tangible asset value of CTH and its subsidiaries as at 30 September 1999.

Following the completion of the disposal of the seatbelt business, ie. the sale of shares in Autobelt Sdn Bhd ("AB") and the sale of seatbelt-related assets by Brimal Holdings Sdn Bhd ("Brimal") on 18 October 1999, the Board of Directors of AIC has decided to restructure its non-core business, ie. the remaining automotive companies, Brimal and AVP and the Plastics Division of AIC, namely CTH and its subsidiaries by regrouping them under AICI which will be collectively known as the Electronics Division of AIC Group ("Proposed Internal Restructuring"). AVP and CTH are wholly-owned subsidiaries of AIC. With the establishment of the Electronics Division, the Automotive and Plastics Division of AIC ceases to exist.

2. BACKGROUND INFORMATION

AICI was incorporated in Malaysia on 4 March 1994 as Saka Inspirasi Sdn Bhd. It changed its name to AIC Inspirasi Sdn Bhd on 6 June 1997 and is principally an investment holding company. AICI has an authorised share capital of RM100,000 ordinary shares of RM1.00 each, all of which has been issued and fully paid-up.

AICI has a wholly-owned subsidiary, Brimal which is principally involved in the manufacture and assembly of interior and exterior mirrors and other automotive accessories. Since the seatbelt-related business has been sold on 18 October 1999, the remaining mirror business will be merged with AVP's operations which is similar in nature, ie. the manufacture of sunvisors and interior car lamps.

3. DETAILS OF THE PROPOSED INTERNAL RESTRUCTURING

The Company has on 5 November 1999, entered into a Share Sale Agreement ("SSA") with AICI for the disposal by AIC of 1,000,000 ordinary shares of RM1.00 each representing AIC's entire 100% equity interest in AVP to AICI for a cash consideration of approximately RM2,827,575 being the amount equivalent to the net tangible asset value of AVP as per the management accounts as at 30 September 1999. On the same date, AIC has also entered into a Share Sale Agreement ("SSA") with AICI for the disposal by AIC of 2,455,826 ordinary shares of RM1.00 each representing AIC's entire 100% equity interest in CTH to AICI for a cash consideration of approximately RM4,992,366 being the amount equivalent to the consolidated net tangible asset value of CTH and its subsidiaries as per the management accounts as at 30 September 1999.

The basis of the consideration for the above share disposals was arrived at on a willing buyer-willing seller basis and shall be payable within 30 days from the date of the SSAs ("the Completion Date"), failing of which the consideration shall be treated as a debt from AICI to AIC, payable upon demand.

The AVP and CTH shares shall be disposed of free from all liens, claims, charges, mortgages or any other encumbrances whatsoever and with all rights attaching thereto as at the Completion Date. The completion of the disposals is unconditional but the purchaser, AICI has undertaken to submit the application to the Foreign Investment Committee ("FIC") for its approval within 14 days from the date of receipt of all the necessary information required for the submission.

Upon the completion of the above share disposals, AICI group of companies will be collectively known as the Electronics Division within the AIC Group and their core business shall be the design and manufacture of consumer, telecommunication and automotive electronic products including its own designed products.

4. RATIONALE OF THE PROPOSED INTERNAL RESTRUCTURING

The proposed internal restructuring will allow AIC to streamline all of AIC's investments in companies related to the automotive electronic and plastics industry and placed under its wholly owned subsidiary, AICI for better management and marketing control and to upgrade its capabilities to design and manufacture higher end automotive and consumer electronic products. The proposed internal restructuring will also maximise the use of its existing facilities and tapping the research and development activities of AIC Microelectronics Sdn Bhd to provide a one-stop solution provider for the consumer, telecommunication and automotive electronic products in Malaysia.

5. EFFECTS OF THE PROPOSED INTERNAL RESTRUCTURING

a) Share Capital and Substantial Shareholding. The Proposed Internal Restructuring will not have any effect on the share capital and substantial shareholding of the Company.

b) Net Tangible Assets ("NTA"). The Proposed Internal Restructuring will not have any material effect to the NTA of the AIC Group.

c) Earnings The Proposed Internal Restructuring will not have any effect on the earnings of the AIC Group for the financial year ending 31 December 1999 as the Proposed Internal Restructuring is transacted with wholly-owned companies of AIC.

6. DIRECTORS' AND SUBSTANTIAL SHAREHOLDERS' INTERESTS

None of the Directors and substantial shareholders of AIC has any interest, direct or indirect, in the Proposed Internal Restructuring.

7. DIRECTORS' STATEMENT

The Board of AIC is of the opinion that the Proposed Internal Restructuring and establishment of the Electronics Division is in the best interest of the AIC Group.

UNQUOTE"

05 November 1999
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