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ACQUISITION BY TAN CHONG & SONS MOTOR COMPANY SDN BHD ("TCM"), A WHOLLY-OWNED SUBSIDIARY OF TAN CHONG MOTOR HOLDINGS BERHAD ("TCMH"), OF ALL THAT PARCEL OF LEASEHOLD LAND HELD UNDER TITLE: PN 4914, LOT NO.73, SEKSYEN 13, BANDAR PETALING JAYA, DAERAH PETALING, SELANGOR DARUL EHSAN, MEASURING IN AREA APPROXIMATELY 78,801 SQUARE FEET TOGETHER WITH A SHOWROOM, WORKSHOP, WAREHOUSE AND OFFICES ERECTED THEREON MEASURING IN BUILT-UP AREA APPROXIMATELY 86,451 SQUARE FEET AND BEARING POSTAL ADDRESS: NO. 9, JALAN KEMAJUAN, 46200 PETALING JAYA, SELANGOR DARUL EHSAN ("THE PROPERTY"), FROM TUNG PAO SDN BHD ("TP"), A WHOLLY-OWNED SUBSIDIARY OF WARISAN TC HOLDINGS BERHAD ("WTCH")

Contents :

1. Introduction
The Board of Directors of TCMH is pleased to announce that following the approval of the shareholders obtained at the Thirty-Third Annual General Meeting of TCMH held on 20 May 2005 for the proposed acquisition of the Property, TCM (“Purchaser”) had on 16 January 2006 entered into a sale and purchase agreement (“SPA”) with TP (“Vendor”) to acquire the Property for a purchase consideration of RM14.2 million (“Purchase Price”).

2. Particulars of the Property

Please refer to the caption for the particulars of the Property. The expiry date of the lease is 6 September 2065. For further information on the Property, please refer to the circular to shareholders of TCMH dated 28 April 2005.

3. Value of the Property

The Purchase Price was arrived at through negotiation between TCM and TP. Based on the valuation report dated 28 February 2005 by the independent valuers, Rahim & Co, the market value of the leasehold interest in the Property as at 23 February 2005, in its existing condition, free from all encumbrances, with the title being good, marketable and registrable with vacant possession was RM13.0 million.

4. Original Cost and Date of Investment

The Property was acquired by the Vendor in 1982 at an original cost of investment of RM4.25 million.

5. Details of the Vendor

The Vendor was incorporated as a private limited company under the Companies Act 1965 on 28 April 1977. Its present authorized share capital is RM15,000,000 comprising 15,000,000 ordinary shares of RM1.00 each of which 14,300,000 are issued and fully paid-up. It is a wholly owned subsidiary of WTCH.

6. Source of Funding

The acquisition will be financed by the financial resources of TCMH and its subsidiaries (the “Group”), which include external borrowings.

7. Rationale for the Acquisition

The Vendor has rented approximately 42,143 square feet of the built-up area of the Property to the Group to house its Petaling Jaya show room for Nissan cars, spare parts store and after sale services center as well as its offices. Upgrading plans have been proposed to transform, upgrade and expand the showroom and the after-sales service center located on the Property to further incorporate the requirements of the Nissan Retail Visual Image concept. With the upgrading plans involving heavy investment, it would be more advantageous for the Purchaser to purchase the Property from the Vendor than to continue with the tenancy arrangement.

Following the acquisition of the Property, the Group will no longer have to incur rental expenses on the portion of the Property (representing 51% of the total net lettable area of the Property) currently occupied by the Group as tenants (the “Purchaser Controlled Portion”), estimated at RM727,000 per annum for 2005, giving a gross rental yield of approximately 10% (based on 51% of the Purchase Price) for showroom and workshop activities.

8. Salient terms of the SPA

(1) The Purchase Price shall be paid in the manner sets out below:
(a) On the day of execution of the SPA, the Purchaser shall pay to the Vendor the amount of RM1,420,000.00 being the deposit and part payment of the Purchase Price (“Deposit”).

The Purchaser had paid the Deposit to the Vendor on 16 January 2006.

(b) On the Payment Date, the Purchaser shall pay the balance purchase price of RM12,780,000.00 (“Balance Purchase Price”) by paying to the Vendor RM12,282,675.05 (“Payment Sum”) and retaining the sum of RM497,324.95 (being the sum which represents 5% of the chargeable gain to the Vendor arising from its sale of the Property) for the purposes of real property gains tax whereupon the Balance Purchase Price shall be deemed to have been fully paid by the Purchaser.

The Payment Date means:

(1) the Original Payment Date being (i) 30 April 2006 or (ii) such earlier date for payment of the Payment Sum which the Vendor may request pursuant to the terms of the SPA;
(2) the Extended Payment Date being the date to which the Original Payment Date shall be extended by virtue of the provisions of the SPA; and
(3) such other date as may be mutually agreed by the parties, as the case may be.

(c) The Vendor may request for a date earlier than 30 April 2006 to be the Original Payment Date by giving to the Purchaser notice in writing of at least (2) months or such shorter period as the Purchaser may agree.

(d) There shall be an automatic extension of the Original Payment Date to the Extended Payment Date:
(i) by a period of one (1) month provided that the Purchaser shall pay to the Vendor interest at the rate of 10% per annum, calculated on a daily basis, on the amount of the outstanding Payment Sum from the date next following the Original Payment Date until actual payment of the outstanding Payment Sum;
(ii) by a period to be agreed or failing agreement three (3) months from the Original Payment Date where both the Vendor and the Purchaser are unable to complete the sale and purchase of the Property.

(2) The Vendor shall deliver vacant possession of the portion of the Property comprising offices currently occupied by the Vendor or its other tenants or licensees and all other portions and areas of the Property not let out to the Purchaser and related corporations of the Purchaser as tenants (“Vendor Controlled Portion”) to the Purchaser on the Payment Date subject to full payment of the Payment Sum and late payment interest, if any.

(3) In the event vacant possession of the Vendor Controlled Portion is not delivered to the Purchaser on the Payment Date, subject to the Purchaser having paid the Payment Sum, the Purchaser shall automatically grant to the Vendor an extension of one (1) month from the Payment Date to deliver vacant possession of the Vendor Controlled Portion provided the Purchaser shall be entitled to charge the Vendor rental (the amount as charged by the Vendor to its tenants) for the said period of one (1) month on the Vendor Controlled Portion and the Purchaser and the Purchaser Group Companies shall cease to be liable to pay any rental on the Purchaser Controlled Portion. (4) Either party is entitled to terminate the SPA by notice in writing to the other party if the other party fails to comply with any of its obligations under the SPA.

9. Timeframe for the Completion of the Acquisition

Subject to paragraphs 8(1)(c) and (d) above or any extension as may be mutually agreed upon, the acquisition of the Property is expected to be completed by 30 April 2006.

10. Financial Effects

The Purchase Price of the Property is not significant compared with the audited net tangible assets of the Group of RM1.05 billion as at 31 December 2004 and therefore the acquisition of the Property will not have any material effect on the earnings and cash flow of TCMH. The acquisition of the Property, when completed, will result in a reduction in rental expense but an increase in financial expense and depreciation charge of the Group.

11. Other Information

Other information in relation to the acquisition of the Property has been disclosed in the circular to shareholders of TCMH dated 28 April 2005.

12. Prospects and Risk Factors

The upgrading plans on the Property will enhance further the image of the Group to help improve sales performance.

There are no other risks associated with the acquisition nor liabilities assumed.

13. Approvals Required for the Acquisition

The acquisition is conditional upon approvals being obtained from the following:

(a) the shareholders of TCMH, which has been obtained at the Thirty Third Annual General Meeting of TCMH (“AGM”) on 20 May 2005; and

(b) the shareholders of WTCH, which has been obtained at the Eighth Annual General Meeting of WTCH on 24 June 2005.

The acquisition is not subject to the approval of the Foreign Investment Committee (“FIC”) but a notification will be required as the purchase consideration is less than RM20 million but above RM10 million.

14. Directors’ and Major Shareholders’ Interests

The directors of TCMH who are interested in the acquisition had abstained and ensured that the persons connected with them had abstained from deliberating and voting on the resolutions in respect of the acquisition at the meetings of the Board of Directors of TCMH.

The directors and major shareholders of TCMH who are interested in the acquisition had abstained and ensured that the persons connected with them had abstained from voting in respect of their direct and indirect shareholdings in TCMH on the relevant resolution pertaining to the acquisition tabled at the Thirty–Third AGM held on 20 May 2005.

15. Directors’ Statement

Having considered all aspects of the acquisition of the Property, the directors of TCMH with the exception of the directors who are interested in the acquisition, are of the opinion that the acquisition is fair, reasonable and in the best interest of the Group.

Announcement Info