Mulpha International Bhd ("MIB") is reorganizing its portfolio of hotel assets in Australia which is owned via its wholly-owned subsidiary, Mulpha Australia Limited ("MAL"). MIB announced the disposals of two hotels in Australia entered into on 20 August 2004, one being the Novotel Century Sydney Hotel ("Novo tel") and the other one Sheraton Brisbane Hotel ("Sheraton").

The disposal of Novo tel was signed between Tank Stream (Darling Harbour) Pty Limited ("TSDH") and Bandwagon Australia Pty Limited ("BAPL") for AUD41.0 million (approximately RMl13.2 million*). TSDH is a wholly-owned subsidiary of MAL. Novotel is a 3Y2-star 226-room hotel opened in 1999 located at Darling Harbour, Sydney.

The disposal of Sheraton was signed between Mulpha Hotels Limited ("MHL") (formerly known as Principal Hotel Limited and a wholly-owned subsidiary of Principal Financial Group Investments (Australia) Pty Limited ("PFG")) together with Permanent Trustee Australia Limited ("PT AL"), being the trustee for Principal Hotel Trust ("PHT") (collectively known as the Vendors) with Thakral Brisbane Hotel Pty Limited ("TBH"), Thakral Operations Pty Limited ("TOP") (collectively known as the Purchasers) and Thakral Holdings Limited ("Thakral"), as Guarantor for a cash consideration of AUD100.0 million (approximately RM276.0 million*). Sheraton is a 5-star, 410-room hotel situated strategically within the Brisbane Central Business District and above Brisbane's Central Railway Station. BAPL and Thakral Group are unrelated parties.

The disposal of the Novotel, will allow Mulpha to reorganize its existing hotel portfolio to focus on larger and more strategic assets of scale whilst the disposa,l of Sheraton represents a remarkable achievement for MAL, happening barely three months after completing the acquisition of the entire equity stake of PFG for AUD226.5 million on 1 June 2004 (approximately RM625.1 million*). The purchase price of AUD226.5 million for PFG was arrived at after taking into account, inter alia, the net book value of PFG based on Sheraton's market value of AUD85.0 million valued by Knight Frank. PFG owns three other hotels in Australia besides Sheraton, namely Intercontinental Hotel in Sydney, Hilton Melbourne Airport Hotel and the world renowned and award-winning Hayman Island Resort in Great Barrier Reef.

The two disposals shall reap in total gross cash proceeds of AUD141.0 million (approximately RM389.2 million*) which will be utilized to bolster the balance sheet of the Group and position it for further growth opportunities. The disposals will result in an estimated combined Group profit after tax of at least AUD12.8 million (approximately RM35.3 million*) based on the maximum tax rate of30% which has yet to be ascertained at this juncture.

"The prices offered to us for Novotel and Sheraton are very attractive offers. The AUDlOO.O million offer by Thakral Group as against our cost of investment of AUD83.0 million for Sheraton Brisbane Hotel was simply an offer that was too good to refuse considering that Mulpha has only completed the acqui~jtion in June 2004. In as much as we try to make well-timed asset acquisitions, it is equally important to capitalize on opportunistic disposals as long as the price is right. The Sheraton offer is an affirmation of Mulpha's strategy on the acquisition of PFG, which represented a unique opportunity for MAL to acquire four leading and profitable hotels in Australia at a low point in the tourism cycle with potential for significant capital appreciation" said Mr. Lee Seng Huang, Executive Chairman of Mulpha International Bhd. "While Mulpha is a long term investor, there is nothing wrong with quick opportunistic profits. We have been investing in Australia since 1992 and will continue to do so. Currently, Mulpha has assets of market value in excess of ADD 1.2 billion in prime and strategic properties and companies in Australia," said Mr. Lee.

Mulpha International Bhd is a diversified conglomerate and a component stock of the Kuala Lumpur Composite Index. Listed on the Main Board of the Bursa Malaysia Securities Berhad since 1983, it has shareholders' fund in excess of RM1.6 billion. The Group's focus is on real estate development and investment, property-related services, trading and financial services, with operations iii Malaysia, Vietnam, Singapore, People's Republic of China, Hong Kong and Australia. Over the years, Mulpha has leveraged its expertise abroad to become Malaysia's largest real estate investor and developer in Australia, owning world-class assets that include Sanctuary Cove in Queensland and Norwest Business Park in Sydney, Intercontinental Hotel in Sydney as well as the world renowned and award-winning Hayman Island Resort in Great Barrier Reef.